President-elect Obama signaled his determination Tuesday to create a new federal and state partnership to rebuild America "from the bottom up." His undertaking comes as the economic crisis depletes state treasuries and demand for state services increases.
At a meeting of the National Governors Association (NGA) in Philadelphia, Mr. Obama said any "true solution" to the economic woes would not come from Washington alone but from cooperation with governors across the United States.
"I'm not simply going to ask our nation's governors to help implement our economic recovery plan. I will ask you to help design that plan," he told a gathering of 48 governors and governors-elect at Congress Hall in downtown Philadelphia. "Because if we're listening to our governors, we'll not only be doing what's right for our states, we'll be doing what's right for our country."
The meeting with the governors was "unprecedented," said Gov. Edward Rendell (D) of Pennsylvania, in that it was the first time a transition team for an incoming administration reached out to state governors to ask their help in crafting a national agenda. Forty-three of 50 states are facing serious deficits.
Obama vowed in his opening remarks to take "action quickly" on passing an economic recovery plan that will create 2.5 million jobs, "put tax cuts into the pockets of hard-pressed middle-class families," and make a "down payment" on infrastructure investments such as for highways that are needed to create economic strength in the future.
The Obama transition team is working with congressional leaders to craft a $500 billion stimulus package for the economy. The governors have signaled they'd like an estimated $176 billion of that to go to infrastructure improvements and state Medicaid programs. During the meeting, however, they did not talk about specific dollar amounts, said Rendell, who is president of the governors' association.
"We didn't come here begging for help," he said. "We came here to enter into a discussion of what's the best way for us as states, working with the federal government in a partnership, to help this country turn around this economic dilemma."
He added, "There are certain things that we have more experience with – [like] infrastructure – that nobody else does."
Some $136 billion worth of infrastructure projects, the NGA estimates, have already won regulatory approval and just need funding to "put the shovels in the ground." California Gov. Arnold Schwarzenegger (R) noted that his state already pledged $42 billion of state money in 2006 to rebuild roads, bridges, and highways, as well as to build a high-speed rail system.
"We hope that is an inspiration to the federal government and the Obama administration to do the same thing nationwide," he said. The California Legislature "also [just] approved an additional $10 million in high-speed rail, which I think is another important thing, because I think there's no reason we in America should be traveling at the same speed as we did 100 years ago."
Governor Schwarzenegger said the $136 billion in infrastructure improvements could be started within months of the Obama administration taking office, creating tens of thousands of jobs, if the funding were made available.
In talking with reporters after the meeting, Obama's pick for chief of staff, Rahm Emanuel, noted that some of the infrastructure projects under discuss involve advances in technology. "Some [governors] talked about what I would call the infrastructure for a 21st-century economy: medical [information technology], broadband. A lot of the infrastructure was around green technology, some on ... high-speed rail [and] mass transit," Mr. Emanuel said, according to a pool report.
Rendell noted that some of those projects and others could be started soon if the federal government reduced red tape. "We also discussed that if you could cut through some of the federal regulations, or speed up some of the permitting and review processes, we could get more ready-to-go projects off the table more quickly," he said.
The governors showed "almost unanimously" their support of Obama's recovery plan and offered to reach out to their citizens and congressional delegations to win passage, Rendell said.
But there were some dissenting voices. Govs. Mark Sanford (R) of South Carolina and Sarah Palin (R) of Alaska said they were philosophically opposed to increasing the federal deficit to stimulate the economy. Many of the current economic problems were created by fiscal irresponsibility, they said.
"Can we indeed solve the problems that were ultimately created by too much debt by adding more debt?" Governor Sanford said. "There are legitimate questions ... about whether this indeed will make a difference."
During the meeting, Obama reportedly noted that economists, even those who had advised Republican presidential hopeful John McCain, had "near unanimity" that concerns about debt should be secondary to the need to generate economic growth with a stimulus package.
Rendell then asked if any governor was willing to forgo federal help to help reduce the deficit. None stepped up to take the challenge.