Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

• Agriculture and Rural Development and International Trade and Foreign Relations – joint meeting (AG/ITFR) – General Agreement on Tariffs and Trade (GATT): High Stakes for States
• Economic Development and Technological Innovation (ED) – roundtable discussion on economic development legislative priorities
• Economic Development and Technological Innovation and Human Resources – joint meeting (ED/HR) – Excellence at work: A State Action Agenda
• Energy and Environment (EE) – managing solid waste; national energy strategy; and the Gulf crisis and U.S. energy security
• Executive Committee (Exec) – discussion on new federal-state partnership
• Human Resources (HR) – roundtable discussion on human resources legislative priorities
• Justice and Public Safety (JPS) – roundtable discussion on violent crime in America
• Transportation, Commerce, and Communications (TCC) – roundtable discussion with congressional transportation leaders on Mapping Future Prosperity—The Surface Transportation Bill
• Other Governors’ Session – Task Force on Health Care
• Plenary Session Discussion Subjects - Health; and the economy

Points of Interest:

William Goldbeck of the Washington Business Group on Health provided an overview of the health care and health financing problems facing the country. He said that in the coming decade, the U.S. would spend a minimum of $8 trillion on the health care system, while another $20 trillion or more might be necessary by the year 2010. He went on to say that since the mid-1960s, our health care system had only been tinkered with around the edges, despite demographic changes such as an aging population that suggested the need for overhaul. For example, there were only 3 active employees now for every retiree, compared with 12 active employees per retiree in 1974. By the year 2000, 67 percent of the American workforce would be between the ages of 48 and 53, and the demand for nursing home care would rise 58 percent. In addition, 68 million Americans did not have health coverage for at least one month of the year.

Goldbeck advocated establishing national standards of medical practice, as well as malpractice reform. He recommended a national eligibility standard for Medicaid set at 100 percent of the federal poverty level, and permitting employers to buy into the system for workers below the poverty line. He urged states to assist private sector health care purchasers in overcoming provider-driven legislation to limit alternative systems and managed care. And he argued for federal waivers designed to empower states to go forward with innovative health care programs for their citizens. He also spoke favorably about a system in Europe known as “Healthy Cities,” under which mayors of what had now grown to 250 cities agreed to support a prescribed set of policies that improved not just health care programs but programs that affected or were affected by health issues—such as those associated with building design and construction, the environment, and transportation.

U.S. House Majority Leader Dick Gephardt charged that the current Administration and former Administrations had cut investment in human capital, education, job training, and the like by roughly 30 percent since 1980. And he argued that the current Administration’s budget proposal for the coming year lacked a vision for economic security.

The Majority Leader went on to say that the federal government had begun micromanaging in the 1960s through categorical programs such as Model Cities. Then came revenue sharing, which was good in theory but lacked meaningful oversight and was an easy target for cuts. A revival of federalism followed, which had promised money to the states without strings but usually delivered strings without money. Now, President Bush was promising to transfer $15 billion in programs to the states via block grants. Gephardt said that he supported the President’s proposal so long as it meant more thoughtful sorting out of federal and state responsibilities, greater flexibility for Governors, a reduction in bureaucracies, and streamlining of services. However, he emphasized that we needed a new direction in which to travel, not more shifting of deck chairs on the ship. Consequently, the President’s plan should be opposed if it amounted to a shell game designed to further hamstring states and an abdication of responsibility masquerading as flexibility.

Gephardt advocated changing the focus of funding to reward results, which would ensure that no public money was spent until a public goal had been reached. For example, he said that he would propose legislation to provide bonuses to states for every child entering the first grade who had received full health care, immunizations, periodic screening for such things as nutritional status, and early education beginning no later than age four. The source of funding could be an increase in corporate taxes on income higher than $10 million. Gephardt said that taxes as an investment on better early education of our population would help offset the $210 billion that was currently being spent by the wealthiest corporations to train their workers. In addition, he argued that businesses recognized that attention to early childhood development was a smart investment. He cited the case of Oster-Sunbeam Appliance Company, which just one year after initiating a corporate-funded prenatal care program saw a reduction in average maternity costs for its employees from $16,000 to $3,500.

Assistant U.S. Senate Republican Leader Al Simpson also spoke about the proposed transfer of $15 billion to the states, cautioning that state officials would now bear some of the burden that currently fell on federal officials with respect to politically-charged issues such as anti-pollution enforcement. He also proposed early action to protect the solvency of the Social Security system, which he predicted would be ‘on the rocks’ by the year 2030. He noted that in 1950, 16 people were paying into the system for every recipient. The ratio had declined to 3 to 1 in 1987, and was expected to be 2 to 1 in 25 years.

Governor William Donald Schaefer of Maryland offered a resolution—which was referred to the committee level for review—asking that Governors work to stop the spread of assault weapons in their states and directing NGA to encourage Congress and the President to support the enactment of federal law banning the manufacture, sale, and possession of assault weapons.

Memorable Quotes:

Referring to the war being fought in the Persian Gulf, U.S. Representative Dick Gephardt noted that America must fight domestic wars as well, including "[t]he war to revitalize our economic strength, the war against drugs and crime, the war against illness and despair, and countless other battles on countless other fronts." He went on to say: "But as we enter these battles poorly armed, poorly financed, and I think poorly trained, we all know why. For ten years, our national government has pursued a policy of unilateral economic disarmament. Our leaders have appeased enemies like ignorance, poverty, disease, and despair. There is no reason why we can't apply the same know-how, the same skill and the same focus that we now have on the [Persian] Gulf to the clear and present dangers that we face here at home, dangers that will be with us long after Saddam Hussein is reduced to his rightful place as a footnote of history."

With respect to President George H.W. Bush's proposal to transfer $15 billion in federal programs to the states, Gephardt said: "…I do know the history of how modern state-federal relations got to this point. The micro-management of the ‘60s through categorical programs, like Model Cities…[T]hen came the era of revenue sharing and block grants, an improvement to be sure, but those huge grants, often shielded from any meaningful oversight, proved to be easy targets for crippling cuts. Then came the new federalism which promised money without strings, but usually delivered strings without money. And now we have [a]…new promise…to return more power to the states. As a former city alderman, I'm a firm believer in returning power back to the people and to the government that's closest to the people. But more than shifting deck chairs on a ship adrift, I think we need a new direction…So…[i]if the proposal is a shell game, if it's merely fiscal sleight of hand, designed to hamstring states still further, if this is abdication masquerading as flexibility, then I think we should oppose the proposal."

U.S. Senator Al Simpson from Wyoming, in a presentation on state-federal issues, said: "I always hate those guys who get up and say, you know what a billion bucks is? Well, I'll tell you what it is. A billion seconds ago, Don Larsen [New York Yankee] was pitching a perfect game at the World Series. A billion minutes ago, Hannibal and his troops were crossing the Alps. A billion hours ago, the earth was a solid block of rock and ice, floating in an orbit. And a billion bucks is what your country spent on Medicare since 9:00 a.m. yesterday…"

Selected Policy Positions Adopted:
(1) Proposing that restrictions be lifted on state-by-state comparisons of educational testing assessments and on the use of sampling data below state levels; (2) calling for a two-year moratorium on the implementation of 1990 Medicaid mandates and for flexibility for states to raise matching money; (3) proposing to work with the Administration and Congress to develop state-specific mutually acceptable agreements to measure accountability with respect to block grants; (4) supporting the extension of credit for emerging democracies and the Soviet Union to purchase agricultural products, and endorsing the continuation of GATT (General Agreement on Tariffs and Trade) negotiations; (5) with respect to dual banking reforms, calling for state authority to continue the use of state banking law to promote capital availability, strengthen economic development, and encourage community reinvestment; and ensuring the ability of states to equitably tax state and federally chartered banks; (6) seeking to ensure responsiveness of employment security funding to rising unemployment; (7) supporting a satellite-based telecommunications system dedicated to education and other public purposes; (8) reaffirming support of political self-determination for Puerto Rico; and (9) giving unequivocal support to the men and women serving in the nation's armed forces in the Persian Gulf.