Obama Seeks to Assure Nervous Governors

PHILADELPHIA (AP) -- President-elect Barack Obama pledged quick work Tuesday on an economic recovery plan to include tax cuts and increased federal spending, and told the nation's governors he wants their advice in designing a package to help their hard-hit states.

"We intend to put tax cuts into the pockets of hard-pressed middle class families in your states. And we intend ... to start making a down payment on the critical investments that are going to be necessary to sustain long-term economic growth as well as pull us out of the current slump," Obama said as he sat down with governors, nearly all of whom are struggling with budget deficits at home as a result of the recession.

Vice President-elect Joe Biden told the same group he hopes they will not criticize the incoming administration for raising the deficit as it tries to help them. "I know none of you would do that," he said jokingly. Many states have constitutions that prohibit deficit spending.

"Forty-one of the states that are represented here are likely to face budget shortfalls this year or next forcing you to choose between reining in spending and raising taxes," Obama said. "Jobs are being cut. Programs for the needy are at risk. Libraries are being closed. Historic sites are being closed."

The recession and the accompanying increase in joblessness translate into higher health care costs for the poor, greater use of food stamps and added strain on welfare programs, and the governors are seeking help in coping.

They have asked for at least $40 billion to help pay for health care for the poor and disabled and perhaps $136 billion more in infrastructure projects like road and bridge repairs in the legislation, which Democrats hope to have ready for Obama's signature as soon as he takes office on Jan. 20.

Obama has said he will make an economic stimulus his top priority, and his aides and congressional leaders have been discussing the outlines of a measure that could exceed $500 billion over two years. The president-elect has said his goal is to secure 2.5 million jobs.

In his brief remarks, Obama pledged a partnership with the governors, Republicans and Democrats alike. "As president, I'm not simply asking the nation's governors to help implement our economic plan," he said. "I'm going to be interested in you helping to draft and shape that economic plan."

He made a point of promising Republican governors "the hand of friendship, the same commitment to partnership as a do my Democratic colleagues."

Obama spoke to a bipartisan group of state chief executives at historic Congress Hall that included former and possibly future political rivals. Among those in attendance were Republicans Govs. Bobby Jindal of Louisiana and Sarah Palin of Alaska, the GOP vice presidential nominee in this year's campaign.

Speaking to reporters after the meeting, Palin said she was "optimistic" about Obama's bipartisan outreach. She also praised him for inviting governors into his Cabinet.

"On the campaign trail I tried to convince a majority of voters that governors knew best. Obviously that didn't work, and I'm here and V.P.-elect Biden is there," she said of her former adversary.

Republican and Democratic governors sat at desks in the hall, with no separation by party, and gave Obama and Biden a standing ovation.

Biden singled out Palin for thanks and said his former rival's presence there is a sign that both parties are now confronting problems together. "Maybe walk outside with me later and say hello to me," he said to laughter from the crowd.

"We're going to be talking about what the elements of an economic stimulus plan will be," said Massachusetts Gov. Deval Patrick, a Democrat.

Pennsylvania Gov. Ed Rendell, a Democrat who chairs the National Governors Association, told reporters there are upward of $136 billion in infrastructure projects that are "ready to go," chiefly road and bridge repair projects that can get started especially quickly. Water and sewer projects and school repairs are other needs.

"We are not here asking for money for governors. If we're asking for any money at all, it's for the citizens of our states," Rendell said.

Rendell and NGA Vice-Chairman Jim Douglas, R-Vt., met Monday with House Speaker Nancy Pelosi, D-Calif., who said Democrats will work to have the economic stimulus measure ready for Obama's signature as soon as he takes office Jan. 20.

It's expected to blend funding for infrastructure projects and Medicaid aid to the states with tax cuts, a temporary increase in food stamp payments, as well as investments in renewable energy projects and other "green jobs" initiatives. The NGA has proposed $40 billion over two years to temporarily increase the federal government's contribution to the Medicaid program for the poor and disabled.

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Associated Press reporters Andrew Taylor and Nedra Pickler in Washington and Beth Fouhy in Philadelphia contributed to this report.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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