Plenary Session Transcripts

• Agriculture (AG) – shaping the image of American agriculture; and a national farm policy: opportunity or impossibility
• Criminal Justice and Public Protection (CJ) – drunk driving controversy; and assessing strategies for dealing with the prison crisis
• Economic Development and Technological Innovation (EDTI) – America's communities: implications for development; report on status of industrial development bonds; and report of the Task Force on Technological Innovation
• Energy and Environment (EE) – natural gas market situation; and national environmental problems and policies
• Executive Committee (Exec) – the President's intergovernmental initiatives; update on federalism; and update on the national employment policy
• Human Resources (HR) – reports of the Task Forces on Merit Pay and Immigration and Refugee Issues; and reports of the Subcommittees on Education, Health, and Income Security; and the appropriate roles of the Governors and the federal government in increasing child support orders and enforcement
• International Trade and Foreign Relations (ITFR) – export financing: state and federal initiatives
• Transportation, Commerce and Communications (TCC) – report on infrastructure policy; report from the Working Group on State Truck Issues; and state/federal transportation issues
• Other Governors' Sessions – special Governors' work session on the federal budget; work session on international tourism, including discussions of marketing and travel and tourism issues in 1984; special work session on technological innovation; work session on defense readiness and the role of the states in military affairs; special session on Governors on Capitol Hill: strategies for promoting state interests in Washington; and meeting of the Subcommittee on International Competitiveness to discuss developing human capital to enhance the international competitiveness of American business
• Plenary Session Discussion Subjects - Health cost containment; the federal budget deficit and its impact on economic development and international trade

Governor Kean and Governor Richard Lamm of Colorado had convened a hearing of health financing experts several months earlier, from which it was learned that 28 percent of health care cost increases by 1990 were projected to be linked to advances in medical technology. In addition, a glut of doctors was expected to occur within the next decade, which would be costly primarily because of the likelihood that these doctors would choose to specialize—and specialization meant using expensive technology. Moreover, the rising cost of malpractice insurance, coupled with defensive medicine practiced by doctors to protect against lawsuits, translated to higher patient bills.

Several Governors made presentations on steps that were being taken in their states to control health care costs. Among the actions mentioned was to offer state employees financial incentives for using health maintenance organizations, in the form of employer payment of a larger percentage of health insurance premiums.

NGA's Executive Committee offered a bipartisan policy position that sought specific budget targets over the following five years. Among the committee's recommendations was to increase revenue by 5 percent between 1985 and 1987 to help reduce the deficit to 2 percent of the gross national product. Also recommended were cuts in defense and entitlement programs—with the exception of means-tested programs, and specification that nondefense discretionary spending increases be restricted to three-fourths the rate of inflation. The policy position proposed to give line item veto authority to the President and recommended closer review of credit and capital budgeting, making budget resolutions binding.

Floor discussion over the Executive Committee proposal was at times partisan, with Republican Governor Richard Thornburgh of Pennsylvania offering an amendment to seek a mandated balanced budget, and Democratic Governors Richard Riley of South Carolina, and Bill Clinton of Arkansas, offering a substitute that would require the President [at that time a Republican] to resubmit his budget under any mandate for balance. Both proposals were tabled. Adopted, however, was an amendment offered by Democratic Governor Bob Graham of Florida, and accepted by the Executive Committee, that proposed to eliminate the deficit in its entirety.

Despite objections that the recommendation to cut defense spending was risky, and that the recommendation to increase revenue amounted to the single largest tax increase in the nation's history, the Executive Committee's proposal was adopted.

Inter-regional disagreement occurred over an Executive Committee proposal to reduce acid rain in two phases. Among the proposal's provisions was funding for the development of clean coal technology and for permitting NOx [nitrogen oxides] trade-offs so as to make SO2 [sulfur dioxide] reductions less burdensome. It also specified the need for funding to offset potential economic disruptions.

Although the proposal was intended to balance regional, economic, and environmental concerns, Governors from the Midwest argued that their states would be most affected, causing job losses in industries that were admittedly polluters. But Northeastern Governors argued that because of westerly winds pushing pollutants eastward, their citizens were most affected environmentally. In the end, however, the proposal was adopted.

With respect to an Executive Committee resolution on reducing the federal deficit (which was adopted), Governor Richard Snelling of Vermont said: "Martin Feldstein [Chairman of the Council of Economic Advisers under President Reagan] says that the way we are going, [deficits] will be two and one-half trillion dollars by the end of this decade. Almost everyone agrees that this is a recipe for disaster. Almost everyone agrees that we have a crisis, and that we must act, if we are to assure solvency and stability for this nation, and assure the economic capacity to make the American dream come true. Now, we have heard the President say that we must end these deficits. We have heard Republican leaders say we must end these deficits. We have heard Democratic leaders say we must end these deficits. We have heard economists say we must end these deficits…There is a time bomb out there, and it is urgent that we act…at the rate the deficit is growing, the interest alone will approach $200 billion by the end of the decade. That means that our task is getting tougher every year by about $20 billion…if you arrest the rate of growth of defense expenditures modestly, if you arrest the rate of growth of entitlements modestly and if you arrest the rate of tax cuts modestly, as this proposal would have us do…we can get this tremendous time bomb defused."

Governor Robert Orr of Indiana said of an NGA proposal to reduce acid rain: "The problem of acid rain…deserves a national solution…I cannot go back to Indiana, or, indeed, face the situation in that part of the country, in the recognition that those from the far West and those from the Northeast will escape the cost of making this change, whereas the people in the Midwest will have to bear that cost. In my opinion, it's an example of an unfortunate tendency that has pervaded this whole argument…of people believing that those that pollute should pay for it. That is no more sensible than it is that those that have arid land should pay for the water projects that have been put there by the national government; or that the dams of the Northwest, which have provided electricity for a long time, should be paid for only by those people in that part of the country; or, for that matter, that the Interstate Highway System be paid for on an equal basis throughout the land."

Selected Policy Positions Adopted:
(1) Recommending specific actions to reduce the federal deficit to two percent of the gross national product over the next five years, including raising taxes (by lowering planned cuts), reducing growth in defense spending, and limiting increases in nondefense discretionary spending, as well as instituting line item veto authority for the President and providing for closer review of credit and capital budgeting, making budget resolutions binding; (2) committing to a two-phase reduction in acid rain, including a plan by which to fairly distribute the cost of reduction among the states; and (3) setting 19 as the minimum legal purchase age for alcoholic beverages.