Rich Pedroncelli / AP Photo
California may become the first state to receive an outright bailout as Gov. Arnold Schwarzenegger has asked for billions in federal aid to resolve its budget crisis. In his proposed budget, California would already see $8.5 billion in cuts and $4.5 billion in alternative funding to help make ends meet, but without another $6.9 billion from the federal government many crucial health and welfare programs could be endangered. "It's time to enact long-term reforms that will change the way the most populous state and the federal government work together," Schwarzenegger said. The state legislature has fought a vicious battle over the budget shortfall, which reached $60 billion last year, and Wall Street is concerned about the state's ability to work out its problems on a political level.