Plenary Session Transcripts

• Agriculture and Rural Development (AG) – congressional perspective on rural development; and the President's rural development initiative
• Economic Development and Technological Innovation (ED) – the effectiveness of business incentives
• Energy and Environment (EE) – roundtable discussion on interstate shipment of solid and hazardous waste
• Human Resources (HR) – From Classrooms to Workrooms: Meeting the Needs of the Changing American Family; and roundtable discussion on the committee's legislative priorities
• International Trade and Foreign Relations (ITFR) – discussion of U.S. trade policy; and roundtable discussion on events unfolding in the newly independent states
• Justice and Public Safety (JPS) – attacking the crime and drug abuse problem; and juvenile justice and delinquency prevention
• Transportation, Commerce, and Communications (TCC) – transportation investment for economic competitiveness; and the future of high speed rail
• Other Governors' Sessions –Education Action Team on School Readiness; Education Action Team on the School Years; Education Action Team on Lifelong Learning; and special session on industrial incentives
• Plenary Session Discussion Subjects - Education; economic growth; and health care

Public opinion expert Daniel Yankelovich shared with Governors the results of a poll conducted by the Council on Competitiveness, which had revealed that 75 percent of Americans believed our nation's ability to compete was stagnating or declining, while a 60 to 62 percent majority believed that job opportunities and our standard of living were declining. At the same time, in another recent study, the public ranked our ability to compete seventh out of eight national priorities. And one reason why the public's recognition of our lagging competitiveness had not translated into a sense of urgency with respect to action was that fragmentation among economic and political leaders had prevented the development and presentation of credible solutions to the public. Specifically, economists looked at technical factors such as monetary exchange and interest rates, while government officials focused on trade issues such as tariffs, on the budget deficit, and on low skill levels of the U.S. labor force.

Yankelovich said the public's number one priority was to improve American schools. In Gallup's annual survey of education, 89 percent of Americans ranked developing the best educational system in the world far above other priorities. He argued that winning public support for the nation's new education goals depended on elevating the competitiveness priority and linking it more directly to education.

NGA's Executive Director, Ray Scheppach, told Governors that the nation was facing a short-run cyclical problem and a longer-term structural problem. A cyclical downturn had begun because of declines in commercial real estate followed by a drop in consumer confidence. But the longer-term structural problem was the result of increasing federal debt, which had risen from $75 billion to nearly $400 billion during the 1980s. And although the Federal Reserve Board had taken action to lower interest rates, it would take another six to nine months for that action to yield an economic upturn.

Scheppach suggested ways in which federal spending at the state level could help address the longer-term structural problem, including investment in the infrastructure, investments in productivity—including education and job training, and the release of some delayed appropriations. Short-run policy was more difficult, however, with three options to consider: (1) do nothing, assuming that monetary policy would suffice; (2) reduce national defense spending, using the money instead for tax cuts, as suggested by President George H.W. Bush; or (3) reduce national defense and increase domestic spending—where spendout would be more rapid than defense spending, as suggested by Democrats.

The discussion that followed Scheppach's presentation revealed partisan differences with respect to how best to deal with the nation's economic problems. There was concern, for example, over the President's proposal for a hard freeze on domestic expenditures during the coming five years, even though within that freeze lay a shift of funding toward education and the infrastructure. And there was concern as well—as much geographic as party-related—over what effect various states would feel from defense spending cuts that were slated to be divided among reductions in weapons, personnel, and administrative expenses.

Selected Policy Positions Adopted:
(1) Supporting the development of guarantees for barter transactions involving American agricultural products and republics of the former Soviet Union; (2) urging the federal government to move forward in the establishment of a national energy policy; (3) calling on Congress and the Administration to establish a new state/federal partnership on trade policy; (4) supporting extra federal efforts to improve customs, immigration, and other infrastructure along our national borders; (5) recognizing the European Community’s efforts to form a single internal market; (6) supporting the Equal Rights Amendment to the Constitution; (7) supporting reconfiguration of the National Education Goals Panel to strengthen congressional participation and add new functions with respect to standards and assessment; and (8) urging immediate action on economic stimulus legislation to create jobs and economic opportunity.