state until a budget was enacted." Lockyer was also critical of the budget, describing its budgetary provisions to Skelton as "banana republic financing", based on accounting gimmicks (that "give gimmicks a bad name"), "phony inflated estimates of revenue" and a "boondoggle" of "massive" corporate tax breaks at a time of mounting State deficit. In 2009, it was discovered that the state faced a $25 billion deficit, following a sharp drop in tax revenues. As negotiations began to revise the state budget, Lockyer tried to convince U.S. Treasury Secretary Timothy Geithner to provide a guarantee for state bond payments. "A fiscal meltdown by California ... would surely destabilize the U.S., if not worldwide financial markets," Lockyer wrote to Geithner on May 13. The Obama Administration declined the request. Earlier, Lockyer warned the legislative conference committee that private lenders would be leery of any more "smoke-and-mirrors accounting tricks" and that lawmakers would have to rely heavily on spending cuts to balance the budget: "It seems to me that the kind of budget we will require before the end of June is almost entirely cuts ... My suggestion to you is don't delay the pain. It's going to be awful, but just get it done. It's going to be worse if it doesn't get done." Lockyer was also quoted as telling Democratic legislators that, "fair or not", angry voters blamed them for "12 years of flowing red ink". "Why don't you start with the realization that probably none of you are going to be back here next year?", after the 2010 elections. "You're not going to get reelected. Just put the politics out of your brain ... That's a very liberating thought, and with it you can get a lot done." When the legislature failed to pass a balanced budget before the start of the new fiscal year on July 1, 2009, State Controller John Chiang began issuing IOUs to some state creditors. Lockyer suggested having a respected intermediary mediate between the Republican governor and the Democratic-controlled legislature. Republican State Senator Bob Huff scoffed at the idea, saying, "No caucus is going to go with that... I'm not going to vote for new taxes just because some mediator told me to." Throughout the budget crisis, Lockyer warned that an impasse would increasingly raise the costs of short-and long-term state borrowing, ultimately as much as an additional $7.5 billion in interest over the next