Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

Committee information was not available

• Plenary Session Discussion Subjects - Energy; and Medicaid reform

Points of Interest:

U.S. Senator Henry Jackson of Washington, who served as chair of the newly-named Senate Committee on Energy and Natural Resources, talked with Governors about current and prospective actions to address the nation's energy problems. He opened by emphasizing that a national energy policy could not be created overnight, nor was there any magic formula to end the nation's energy ills. All could agree on goals such as conservation and the development of new energy sources, but achieving those goals would involve hard choices and painful tradeoffs among competing interests—between consumer and producer; economic growth and energy restraint; and energy development and environmental protection.

Legislatively, an allocation system had been established to minimize the impact of energy shortages; mandatory conservation and rationing had been authorized—should they be necessary—to cope with severe shortages; and a strategic petroleum reserve had been created to protect against future embargoes such as the one that had been imposed by OPEC (the Organization of Petroleum Exporting Countries) several years earlier. A massive research and development program had been launched to make better use of existing energy sources such as coal and to develop renewable sources such as solar energy. And after much debate, an oil pricing policy had been developed that provided for a higher domestic price. Efforts had also been authorized to stimulate, and to require more efficient use of, energy in homes, automobiles, and industry.

Senator Jackson said that it was now critical for the Carter Administration to work with Congress as well as with Governors to build consensus on how to develop an agreed-upon set of national energy goals. Although it would take time to develop policy, the need for a credible strategy could be met now, based on three propositions:

• Domestic production of oil and gas had peaked and could not be relied on to satisfy increasing energy needs, meaning that new reserves would have to be opened in Alaska or elsewhere.
• While offering great promise, the development of new sources such as solar energy could not be expected to meet substantial portions of the nation's energy needs in the short-term.
• It could not be assumed that foreign oil would be available to fill the gap between domestic demand and domestic supply.

Taken together, these propositions meant that the nation needed to buy time by using fossil fuels wisely; giving priority to exploring public land and the outer continental shelf for new supplies of oil and gas; expediting the development of sound transportation systems to bring supplies to market; developing a massive conservation effort that included tightening auto efficiency standards; seeking to establish relationships abroad to ensure the availability of foreign oil; and pursing a vigorous energy research and development program.

During a question and answer session, Senator Jackson was asked what states could do to assist in stabilizing the energy situation. He responded that legislation had been enacted in 1975 authorizing block grants to states to help them work out their own conservation programs, given that states were in the best position to take charge of such things as rationing, should it be necessary, and establishing and enforcing conservation-conscious building codes. In response to a question about the use of nuclear energy, Senator Jackson said that President Carter preferred to use nuclear energy as a last resort.

Governor Thomas Judge of Montana raised the sensitive issue of states disagreeing on the shipment of oil from the Alaska pipeline. He noted that some states along the route—Washington in particular—objected on environmental grounds to being conduits for oil going to Montana, even though Montana provided electricity to Washington and coal to various states. Governor Dixy Lee Ray of Washington responded that she understood Governor Judge's concerns and was open to negotiation on the issue.

Medicaid reform was also a major topic of discussion. Although Governors did not agree on specifics, Governor George Busbee of Georgia, who headed the Governors' association's Medicaid Reform Task Force, noted that there were broad principles around which they could rally, including the importance of overcoming fraud, abuse, and overutilization of Medicaid and focusing on containing the program's costs, which had risen from $4.7 billion in 1970 to $14.7 billion in 1976—an average annual increase of more than 20 percent. Governor Busbee went on to highlight recommendations of the task force, which included:

• consolidating health care functions of the Department of Health, Education, and Welfare into one organizational entity that would report to the Secretary;
• giving highest priority to detection, investigation, and punishment of fraud, abuse, and overuse of Medicaid on the part of both recipients and providers;
• developing a manual of policies and procedures for use by Medicaid providers to guide their administration of the program and to help detect fraud and abuse;
• providing states with flexibility in reimbursing Medicaid providers and establishing reimbursement ceilings;
• increasing administrative funding for states that demonstrated successful levels of program performance;
• revising the now outdated method for determining the federal government's share of funding; and
• permitting states to restrict recipients' freedom of choice where it could be demonstrated that the same quality of care was available at lower cost from specific participating providers.

During discussion of committee reports, Governor Hugh Carey of New York outlined the work of the task force that he headed on welfare reform, which had been established pursuant to a resolution adopted at the National Governors' Conference's 1976 Annual Meeting. Although welfare reform had been held up in the U.S. Senate, President Carter had set a target date of May 1977 to move forward once again, and Governors were asked to provide their input.

Memorable Quotes:

Governor Reubin Askew of Florida, chairman of the National Governors' Conference, said: "A major accomplishment [this past year] has been the establishment of a Hall of States, the permanent home of the National Governors' Conference…This new Headquarters is a physical symbol of the important role the states have in our capital city in Washington. We intend to assert ourselves in constructive ways while participating in the formulation of national policy that affects our states and our cities."

Governor George Busbee of Georgia said the following about Medicaid reform: "…much of the focus is on cost containment while true reform in Medicaid must meet broader tests of quality and equity. It is important at both the federal and state levels to recognize the legitimate health care needs and services of the country's poor and to provide programs to meet those needs. Complete emphasis on the fiscal problems faced by states without appropriate emphasis on the legitimate needs of the poor and the government's obligation to provide for health care is an indefensible position for the government to take. The scarce Medicaid dollar has a long way [to] go and the waste caused by fraud, abuse, overutilization, impractical regulations and inefficient administration at both the state and federal levels must be resolved in order to provide a meaningful level of health care to the poor of this nation."

Selected Policy Positions Adopted:
(1) Seeking overhaul of Medicaid administration, including punishment for fraud, abuse, and overuse, greater flexibility for states, and more efficient federal administration; (2) requesting federal funding for categories of highways other than those in the interstate system; (3) petitioning the President to determine the establishment of a system controlling the importation of shoes in order to provide relief for the U.S. shoe industry; (4) reaffirming support for Title VI Regional Commissions (interim position); (5) urging serious consideration by Congress and the Administration of the establishment of rigorous standards for the construction and operation of oil tankers and for the training and licensing of their officers, crews, and pilots; and (6) requesting a separate title under the Comprehensive Employment and Training Act (CETA) devoted to youth, with provision of funding for Governors to coordinate youth training and education programs.