California’s spectacular budget woes — a $42 billion projected shortfall over the next two years — will probably not be solved by help from Washington, report David Cho, Brady Dennis and Karl Vick of the Washington Post. Treasury Dept. Sec. Tim Geithner and other members of the Obama administration economic policy team are apparently too concerned that they will have to bail out other states (Obama’s home state of Illinois, which faces a $12 billion deficit over the next two years, would probably not say no to some federal help).

So why banks and not states? Is it just because the bank crisis came first and there’s only so much money? States pay teachers, keep hospitals open and help the unemployed — all programs that California Gov. Arnold Schwarzenegger threatens to cut to the bone.-MB

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