Obama asks governors for stimulating ideas
Philadelphia » In a quickly planned summit, President-elect Barack Obama asked the nation's governors for their input on a new economic stimulus plan that will seek to create jobs and ease the suffering of those hit hardest by the recession.
Almost every state is now suffering under the same financial crisis that has caused Wall Street firms to cannibalize each other and brought the big Detroit automakers to their knees.
And just like these major corporations, governors -- including Utah's Gov. Jon Huntsman Jr. -- are hoping the federal government will offer some relief.
In a nearly two-hour closed-door session held in historic Congress Hall, Obama fielded questions and took suggestions from 48 governors and governors-elect, most of whom support his proposal for a $500 billion stimulus bill.
"As president, I will not simply ask our nation's governors to help implement our economic recovery plan," Obama said at the start of the meeting. "I will ask you to help design that plan."
While the details are still being negotiated, the National Governors Associations wants the proposal to temporarily lengthen unemployment benefits, expand state-run Medicaid rolls and fast-track construction of schools, roads and bridges.
Utah's Huntsman said such a stimulus bill is vital to helping the economy and should be teamed will incentives for small and medium-sized businesses, which he said "are going to be the ones who pull us out of the morass."
But not every governor was on board. South Carolina Republican Gov. Mark Sanford and Texas Gov. Rick Perry in an op-ed piece published Tuesday in the Wall Street Journal warned of a dangerous "bailout mentality" that undermines personal responsibility.
Alaska Gov. Sarah Palin said some conservative governors "still have great concerns" about trying to stimulate the economy by going deeper into debt.
Despite the mixed opinions, Huntsman said the meeting was devoid of partisanship and he was impressed with Obama's willingness to work with state leaders.
"Clearly it is in this team's mind to work pragmatically, to work as problem solvers and to work across the aisle in a bipartisan fashion," Huntsman said.
Utah's governor made the meeting's first suggestion, saying governors by region should identify "gratuitous unnecessary bureaucracy" responsible for delaying construction projects that an Obama administration could then eliminate.
Huntsman, chairman of the Western Governors Association, didn't have an example off-hand, but said they may involve multi-state road or energy grid projects. Obama expressed interest in such a list. National Governors Association chairman Ed Rendell, of Pennsylvania, said governors would provide Obama their suggestions in a matter of weeks.
Rendell also estimates that states have about $136 billion in unfunded construction projects "ready to go." These include everything from new schools to levees that have been designed and determined to be environmentally safe.
Obama and Democratic congressional leaders support spending on these "ready to go" projects, saying it would quickly create tens of thousands of jobs and inject much needed money into the economy. They have promised this would be part of any stimulus plan.
Utah has $3.9 billion worth of road projects that could move forward, but are now being delayed because of the state's financial problems. This includes a major expansion of Interstate 15 in Utah County and the construction of a new Mountain View highway on the west side of Salt Lake County.
"It is my every intention of finding a way to move many of those projects along," said Huntsman. And if the money doesn't come from a federal stimulus bill, he would consider bonding for the cash.
Huntsman will unveil his budget plan for the next fiscal year on Thursday. It won't be pretty.
Like more than 40 other states, Utah has already had to deal with budget shortfalls. In September, Huntsman and the Legislature cut spending and deferred funding for programs to make up a $354 million drop in revenues.
State leaders reduced medical benefits for 19,000 people covered by Medicaid and lopped off about 50 currently unfilled positions at the prison and within the Utah Highway Patrol.
But that won't be enough. More -- and deeper -- cuts are in Utah's future with sales and income tax revenues continuing to plummet. Legislative leaders say they may need to cut as much as $120 million more by the end of the year.
While many economic experts don't expect the downturn to last long, Huntsman said states will feel "residual aspects of the recession for years to come." But with Utah's burgeoning technology industry he expects the state to be one of the most "resilient."