Subject: california 1 / 17 / 01 pt . ii
one of the issues we have been following with respect to the california power
crisis concerns the role of prospective broader federal involvement in the
issue post - inauguration . in the last two days , we have seen two signals
suggesting that the bush administration will not significantly deviate from
the " broker " role played by the clinton white house :
1 . in his confirmation hearing this morning , treasury secretary - designate
o ' neill cautioned that " it is not clear that us intervention is needed in
california " and that the " governor must be the first line of defense . "
2 . a source close to bush economic advisor larry lindsey reported to us
yesterday that " there was little that the federal government could do
specifically to help , beyond focusing on national issues ( increased
production , transmission capacity etc . ) . "
of course , the bush treasury officials are likely to be more cautious with
respect to intervention than the energy team , as was true with the clinton
administration . yet lindsey in particular is unlikely to deviate far from
the official bush view at this stage . further guidance should be forthcoming
with respect to this issue from energy secretary - designate spence abraham ' s
testimony tomorrow .