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Congress Cutting Back Funds For States

California's budget hole may be getting bigger, because lawmakers in Congress have stripped language out of a bill that promised federal funds to states. The money was largely to help pay health care costs for the poor.

California's share would have amounted to nearly $2 billion. It would have been an extension of funds originally provided in last year's economic stimulus bill.

California Department of Finance Spokesman H.D. Palmer says Governor Schwarzenegger is actively campaigning to have the money re-instated.

"The Senate's going to be back in session next week," Palmer said. "They'll be taking up this bill, and there is a possibility that conceivably as early as next week someone in the Senate may try to raise this issue again. But whether it's this bill or another bill we remain confident Congress will adopt this six-month extension that provides not only California but a number of other states with very much needed fiscal relief."

California is already facing a $19 billion budget gap.

Governor Schwarzenegger revised budget proposes to eliminate the state's welfare program and other measures to address it.

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