Plenary Session Transcripts

• Economic Development and Commerce (EDC) - NAFTA [the North American Free Trade Agreement] implementation and the role of the states; economic growth and development incentives: discussion of principles of mutual cooperation; workforce development programs: successful state reform; and transportation
• Executive Committee (Exec) - update on legislative issues and priorities; and reinventing government
• Human Resources (HR) - welfare reform; and workforce development issues: an overview from the employer perspective
• Natural Resources (NR) - agricultural outlook; environmental priorities and the state-federal partnership; and America's transition to alternative fuels
• Other Governors' Sessions - Task Force on State Management: Conference on Redesigning Government: Implementation Workshops; Task Force on Health Care; work session with President Bill Clinton; Task Force on Education; and special trade briefing
• 1992-93 Chair Colorado Gov. Roy Romer's Initiative - Strategic Investment: Tough Choices for America's Future
• Plenary Session Discussion Subjects - Addresses by President Bill Clinton, Vice President Al Gore, and Senator Bob Dole of Kansas; Medicaid; gas taxes; education; health care reform; reinventing government; and City Year (a program of national community service for young people)

• The U.S. spent more than 14 percent of our income on health care, while only one other nation (Canada) had exceeded 9 percent. If nothing was done to address rising costs, by the year 2000 the amount spent on health care in the United States was expected to rise to 19 percent.
• Roughly 100,000 Americans were losing health insurance each month because their employers could no longer afford to cover them, in addition to which many employees were being denied salary or wage increases to conserve sufficient funds to underwrite insurance costs.
• Doctors now took home 52 cents of each dollar received, compared with 75 cents during the 1980s, primarily because of the cost of processing paperwork with 1,500 separate insurance companies writing thousands of different policies.
• A total of 40 million people remained uninsured, with the numbers rising.

The President said that the goals of his reform plan were to maintain a system of managed care that included a standard package of benefits, permitted pooling for small employers, provided 100 percent tax deductibility for the self-employed, included a prescription drug benefit for the elderly, and charged states with the responsibility to organize health groups authorized to purchase health care.

John Motley of the National Federation of Independent Business (NFIB) told Governors that the small business community's primary concern about the Clinton health care reform plan was its mandate for employer coverage of health care, the cost of which Motley said would force many small businesses to eliminate jobs. One suggestion Motley offered was to cap employer deductions, tying them to the cost of whatever standard benefit package was enacted.

Vice President Al Gore spoke to the Governors about National Performance Review—the Administration's plan for reinventing government in accordance with the following four principles that put people first: (1) working to serve customers; (2) giving employees greater autonomy to be able to exercise judgment in accordance with circumstances; (3) helping communities solve their own problems; and (4) fostering excellence by replacing regulations with incentives and by measuring outcomes rather than inputs.

The Vice President also noted that President Clinton, having been a Governor himself, understood the burden of federal mandates, in accordance with which the structure of categorical grants needed to be simplified; the focus of rules and regulations needed to be changed from compliance to outcomes and from sanctions to incentives; and unfunded mandates needed to be reduced.

An NGA task force had conducted a survey of Governors regarding programs for government reinvention that were already under way at the state level, and some of the programs were described at the meeting.

An update was provided regarding the work of the National Education Goals Panel (NEGP). The panel had demonstrated its bipartisanship in transitioning from a Republican to a Democratic administration, had achieved consensus on criteria for common and consistent school records data, and had outlined an agenda for college assessment. Governors also discussed pending education reform legislation in Congress. NGA had concerns about the House version of the "Education 2000" bill, including its prescriptions for how states must address "opportunity to learn" standards. The association preferred the Senate version, although Governors wanted it to clarify that states would not be required to adopt national "content in performance" standards in order to participate in the federal education program, and that states should be required to show only that schools were making progress toward meeting "opportunity to learn" standards—rather than being required to meet them.

Vice President Al Gore said: "Government is writing with a quill pen in an age of Word Perfect, and it's time for change...Welfare rules state that a family cannot own a car worth more than $1,500 in equity value. To qualify for food stamps, the family cannot own a car worth more than $4,500 in market value. For Medicaid, the value can range from $1,500 equity value to a total exemption, depending upon which categorical group fits you. In the food stamp program, the car can be exempt if it's used for work or training, but in AFDC [Aid to Families with Dependent Children], there is no exemption for the car under any circumstance. Well, here's my question. Why can't we free up our government workers to help people with their problems instead of having them spend so much time on cars and on contradictory regulations and guidelines that don't fit together and don't make any sense...The framework of our federal government was designed more than half a century ago. Its model was the bureaucratic top down, centralized and heavily regulated companies of the industrial age...The successful companies in our nation don't work that way anymore, but while American business has spent much of the last 15 to 20 years reinventing itself, decentralizing...Washington has preserved its outmoded ways..."

President Bill Clinton said the following in connection with his Administration's pending proposal for health care reform: "Just consider this one fact, if health care costs had been held in check, that is to inflation plus growth since 1980, state and local governments would have on average 75 percent more funding for public school budgets. In fiscal year 1993, states spent more on Medicaid than on higher education for the first time. State spending on Medicaid is expected to jump from $31 billion in 1990 to $81 billion in 1995, if we don't change this system. I believe that health care reform will boost job creation in the private sector if it is done right. I believe it will offer a level playing field to all those small employers who are covering their employees right now and paying too much for it. I believe it will be a critical first step in rewarding work over welfare."

Senator Bob Dole of Kansas said: "...now that the Cold War is over...there are some that would like to give up America's leadership role around the globe. The term multilateralism is no longer used to describe a meaning of implementing foreign policy, but to some it's an excuse for abdicating U.S. leadership. We've already seen the effect of this new multilateralism in war ravaged Bosnia...While the United States hesitates from afar, the United Nations and the European communities have been engaged in diplomatic hand wringing...[Bosnia is] a member of...the United Nations, it is being gobbled up, defenseless because of an arms embargo which violates the very principles of the U.N. charter. The arms embargo was imposed in 1991 on Yugoslavia. There isn't any Yugoslavia anymore. In my view, the arms embargo is illegal...if we can't help in any other way in Bosnia, at least we ought to lift the arms embargo. If that threatens any U.N. troops, take them out...and give the Bosnians a chance to defend themselves, if nobody else in the world will come to their rescue...Any...settlement will not only be an invitation to the brutal dictator in Belgrade...it's going to give him more power to tighten his grip on the suffering Serbian people and begin full scale ethnic cleansing against Albanians and Kosovo...There is no substitute for U.S. leadership...It doesn't mean we have to police the world. It doesn't mean we have to send ground troops everywhere, but on the other hand, we cannot allow the principles of international law and order to be violated with impunity and watch silently as regional instabilities grow unchecked..."

Governor Carroll Campbell of South Carolina said the following in outlining his agenda as Chairman of NGA for the coming year: "The ocean liner, Lusitania, in 1908, set the record on a trip from Queenstown, Ireland to New York...[covering] the nearly 3,000 miles in four days and 15 hours...Henry Ford introduced the Model T, which began our love [affair] with the automobile, and also in 1908, something else happened. The Governors of 46 states and the territories of Arizona and New Mexico forged a partnership which today is known as the National Governors' Association...It's our generation's task to lead the nation with confidence and enthusiasm into the 21^st century...it's our responsibility...to show governments at all levels how to do more with less, to provide the services Americans need without huge tax increases, without arbitrarily throwing money at problems, and without creating intrusive government programs. It's a tall order. If we're to be successful, we must work in partnership with the people...I don't believe there's one among us who thinks that government alone can solve every problem. We've developed programs and partnerships in our states which have led to tremendous progress in recent years. The National Education Goals came out of this Governors' association. The Family Support Welfare Reform Act came out of this Governors' association. The Act for Better Child Care came out of this Governors' association...We have a record to stand on and to build on..."

Selected Policy Positions Adopted:
(1) Via a new permanent policy on federalism, calling for a new partnership based on federal forbearance and the avoidance of federal preemption of traditional state roles, and for program flexibility for states in administering federal initiatives; (2) expressing concern over the impact of military base closures on state economies and local communities; (3) supporting a strong intergovernmental approach to national science and technology policy; (4) recommending changes to Superfund, including streamlining, and creating new state authority to voluntarily assume full management and enforcement responsibilities for cleanups at all hazardous waste sites in the state; (5) outlining principles for welfare reform, including time limits on cash assistance to families with children, expansion of the Earned Income Tax Credit, stronger child support enforcement, and incentives for private sector creation of jobs; and (6) urging congressional enactment of legislation to eliminate retroactive liability of state and local governments for overtime pay determined via recent court decisions to be due public employees under the Fair Labor Standards Act.