SACRAMENTO, Calif. (AP) — California was scheduled Tuesday to borrow about $5 billion from private investors as a hedge against a possible default by the federal government.
State Treasurer Bill Lockyer planned to ask a group of banks, credit unions and investment funds for short-term loans so the state can avoid a potential cash shortage if the federal government fails to extend its debt ceiling. If that happens, the government could shortchange states on health care and education funding.
Lockyer, a Democrat, has said he is taking the step as a precaution if the federal government can't meet all its obligations.
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