RutlandHerald.com - We Are Vermont

Governors ask Obama for federal money

President-elect Barack Obama (left) joins Vermont Gov. James Douglas at the bipartisan meeting of the National Governors Association at Congress Hall in Philadelphia, Pa., on Tuesday. THE ASSOCIATED PRESS

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PHILADELPHIA — As his advisers work to trim $60 million from a beleaguered state budget, Gov. James Douglas met with President-elect Barack Obama in Philadelphia on Tuesday to help craft a federal recovery package aimed at salvaging state economies.

Douglas, vice chairman of the National Governors Association, moderated a meeting between Obama, Vice President-elect Joe Biden and 47 governors from around the United States.

The elected leaders are seeking a massive infusion of federal money to fill Medicaid shortfalls and fund an infrastructure revitalization project.

"We're in a crisis now, both economically and fiscally, and I think it's critical that we have this infusion of federal dollars to jump-start the economy of our state," Douglas said following the meeting.

The recession, and accompanying spike in unemployment rates, has placed new stresses on food stamps, health care and social welfare programs. The NGA has 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.

Federal investments in infrastructure improvements, Douglas said, are among the most effective vehicles for economic recovery.

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.

Congressional leaders are working to fashion a recovery package ready for Obama's approval when he takes office in January.

"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.

As vice chairman of the NGA, Douglas enjoyed center stage Tuesday. Standing alongside political celebrities such as Alaska Gov. Sarah Palin and California Gov. Arnold Schwarzenegger, Douglas endorsed a recovery plan that would see tens of millions of dollars flow into Vermont early next year.

"Despite the excessive deficit that the federal government has been running in the recent past, a stimulus recovery plan of this kind would be positive and create more jobs," he said.

The strategy is in many ways antithetical to the approach Douglas has urged back home. Even in the face of mounting budgetary pressures that threaten key programs and services, the four-term Republican has urged fiscal discipline over the creation of new revenue streams.

He is less insistent on fiscal belt-tightening in Washington, D.C., where the benefits of any recovery plan, according to Douglas, outweigh the pitfalls of increasing the $10 trillion federal deficit.

"It's not comfortable dealing with this fiscal picture at the federal level," Douglas said. "But in the short term I think most governors agree that any recovery plan has to provide some federal support for state/federal programs."

Vermont recently embarked on a mid-year rescission process that Douglas himself has warned will impact programs and services in the state. Declining revenue streams mean that $60 million must be cut from this year's spending plan; administration officials hope to complete the cuts before the beginning of the new biennium.

"I want to be very clear that everything is on the table," said Douglas, who declined to offer specific rescission targets. "We are going to be making some tough decisions. We just haven't decided exactly what they are yet."

The $60 million General Fund downgrade does not include hits to the Transportation Fund, which has seen Fiscal Year 2009 coffers shrink by $13 million since July.

Officials in the Agency of Transportation, as well as the Legislature, are all but counting on new federal aid to help mitigate the downgrade and reverse decades of wear and tear on Vermont's aging infrastructure.

Douglas, who met with congressional leaders in Washington, D.C., on Monday to discuss the federal package, said no numbers have yet been affixed to the recovery plan. He said he has an idea of how much money he'd like to see flow to Vermont, though he did not offer a figure Tuesday.

"I do have some ideas but I really don't want to be specific," Douglas said. "We met with Speaker (Nancy) Pelosi in Washington and stayed away from specific numbers, but we have a few in the back of our minds."

Douglas moderated an approximately hour-long meeting between the governors and Obama, during which state leaders voiced concerns to the incoming commander in chief.

"I moderated the discussion with my counterparts and urged them to be succinct, with varying degrees of success," Douglas said. "The president-elect in some cases responded to comments that were made but he indicated he was there mostly to listen, and he did."

Douglas said Obama seemed attuned to some of the regulatory hurdles that might impede rapid deployment of transportation money, and that he was eager to ease permitting processes and expedite construction.

Douglas called Obama "amiable" and "intelligent." At one point during the meeting, according to Douglas, Obama asked him permission to interject a comment.

"I said, 'umm, uhh, yes, I think it would be OK if you jump in at any point,'" Douglas said.

The event was held in Congress Hall, a brick landmark near the Liberty Bell where the U.S. Congress convened from 1790 to 1800. It was the very same building, Douglas noted, that Vermont was admitted into the Union in 1791.

Tuesday's event attracted scores of representatives from national media outlets, and the scene stood in stark contrast to Douglas' regular press conferences in Montpelier.

Bulbs flashed as Douglas stood alongside more than two dozen of his gubernatorial counterparts for a post-meeting press conference. Later Douglas met individually with reporters before departing outside for a live on-camera interview with a Fox News anchor.

Douglas said the NGA will likely assign a taskforce of members who would continue to advise Obama and Congress as they assemble a recovery plan.

The Associated Press contributed to this story.