SAN DIEGO -- Gov. Arnold Schwarzenegger is expected Friday in San Diego, where he is likely to be asked about his plans to ask the federal government for a $7 billion emergency loan.

Schwarzenegger is scheduled to appear at a news conference at a Kearny Mesa Wal-Mart Friday morning to sign into law the so-called emergency management bill AB 38 and to sign memorandums of understanding with private industry partners to strengthen the state's disaster response system.

Alarmed by the ongoing national financial crisis, the governor warned Treasury Secretary Henry M. Paulson Thursday that the state might need an emergency loan within weeks, the Los Angeles Times reported.

"Absent a clear resolution to this financial crisis," Schwarzenegger wrote in a letter e-mailed to Paulson and obtained by The Times, "California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal treasury for short-term financing."

California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent. If the cash runs out, payments to schools and other government entities could quickly be suspended and state employees could be laid off, according to The Times.

The last time the federal government made a loan like the one Schwarzenegger might ask for was in 1975, when it lent New York City money to avoid bankruptcy.

The state of California is the biggest of several governments nationwide that are being locked out of the bond market by the global credit crunch.