An estimated $2.4 billion windfall from the feds has touched off a partisan debate in California over how best to plug the red ink flowing out of state coffers.

Los Angeles-area Republicans and Democrats alike welcomed the one-time federal aid, which was included in the $350 billion tax cut package President George W. Bush signed on Thursday. But while Democrats eyed the money for reducing cuts -- particularly in health and human services programs -- Republicans maintained the dollars should go to avert tax hikes.

"I hope the governor doesn't go squandering that money and wasting that money," said state Assemblyman Tony Strickland, R-Westlake Village.

Gov. Gray Davis places the ever-widening state budget deficit at $38.2 billion. To close it, Davis has recommended $8.3 billion in new taxes, including a hike in the car tax and a half-cent increase in state sales tax. He also has proposed shifting a number of state services to local governments and billions of dollars in cuts to health and other programs.

Of the federal funding, Davis spokesman Steve Maviglio said: "It couldn't come at a better time, and it's certainly welcome. But it falls far short of what we need to bridge our budget shortfall."

He added that California has spent about $750 million on homeland security, for which the governor believes the state should be reimbursed.

Davis has not decided where the expected federal aid should go. Members of the state Legislature, however, have their own ideas.

Assemblyman Lloyd Levine, D-Van Nuys, said he wanted to see the money go toward reducing cuts, particularly to medical access for children, the elderly and the disabled. He also said he hoped some of the money could be used to reduce either fees or cuts to community colleges.

The Assembly and Senate already have rejected Davis' proposed $1.5 billion reduction in payments to medical providers in the $26.8 billion Medi-Cal health program for lower-income Californians.

The Democrat-controlled Assembly has added about $2.2 billion overall to Davis' proposals while the Senate, also under Democratic control, has added back about $250 million.

Assemblywoman Sharon Runner, R-Lancaster, criticized the restoration of cuts as "outrageous" and charged Democrats with slashing $80 million out of education programs to pad what she called "pet programs."

"They're already spending more than they need to spend on pet programs," Runner said. "I think we need to pay down the deficit. We need to be getting our financial house in order in terms of spending less than we bring in. We don't really have a revenue problem; we have a spending problem."

Added Strickland: "This should also let the governor not raise taxes."

State Sen. Sheila Kuehl, D-Los Angeles, defended reinstating money to what she described as "draconian" medical cuts.

"If the biggest critique of me in public service is that I wanted to spend money on frail seniors and children's health care -- guilty," she said. But Kuehl noted that state budgeters still have to analyze the funding for strings and other conditions Congress may have placed on it. "Apparently there's all kind of fine print," she said.

The tax package includes $20 billion in aid for cash-strapped state governments.

According to state officials, California is expected to receive $1.15 billion in grants that can be used to provide "essential government services" or to cover the state costs of comply with any federal mandate. Another $1.29 billion is slated specifically for Medi-Cal.

Both houses of the state Legislature said they plan to spend half the money in the 2003-04 budget year and the other half during 2004-05.

Jean Ross, executive director of the California Budget Project, called that "prudent."

"If you use it all now, you have a $2.4 billion hole in your budget next year that you need to fill," she said. As for how the dollars will be spent, Ross said: "It's hard to tell where the debate will go at this time."