Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

Forging a strong state-federal partnership; state initiatives to assist distressed communities; and the current and pending fuel crisis: actions and initiatives by Governors

Points of Interest:

The ongoing energy crisis was central to this meeting, at which President Jimmy Carter's scheduled appearance had to be cancelled in the midst of a Camp David summit on domestic affairs. Appearing in the President's place, Vice President Walter Mondale told Governors that the Carter Administration's two-pronged strategy for dealing with rising oil prices included: (1) addressing shortages by pressing for increased production internationally and expediting construction of the Alaska/Canada pipeline to bring North Slope gas to the rest of the country, which was predicted to displace roughly 700,000 barrels of imported oil by 1985; and (2) developing alternative sources of energy. To pay for the research and technology needed to fulfill the second strategy, the Administration proposed a windfall profits tax to "create an energy security fund designed to transform the oil companies' unearned profits into the foundation for our national security."

Governors considered a policy position related to the energy crisis that supported the President's plan for both a windfall profits tax and a phased deregulation of oil prices. However, the policy position, which had been proposed in committee, proved to be controversial among the Governors' association's full membership, particularly with respect to its addition of a plowback credit, through which the energy industry would receive tax credit for reinvesting windfall profits in energy conservation. Governors argued over whether such a credit would reduce funding to help provide relief for such things as heating bills, mass transit, and energy conservation. With the assistance of then-Governor Bill Clinton of Arkansas, who was a member of the Natural Resources Committee out of which the policy position had come, a compromise was achieved to the effect that revenues from a windfall profits tax "and other appropriate funding sources" should be used for such options as a plowback credit, energy conservation, and energy emergency impact assistance programs for low-income and fixed-income individuals.

A compromise proposal offered by Governor Clinton also resolved debate over a policy proposal dealing with maximum truck weight. Although some Governors supported the federal establishment of a uniform weight higher than some states currently permitted, others were concerned that permitting higher weights would cause highway deterioration. Governor Clinton's solution, which was adopted, supported authorizing the federal government to establish a standard allowance temporarily during a national energy emergency.

Memorable Quotes:

Vice President Walter Mondale (substituting for the scheduled appearance of President Jimmy Carter, who was in emergency summit over the domestic energy crisis) said: "The other day, I was listening to an interview on the radio with a lady that lived right next to the stricken Three Mile Island [Pennsylvania] nuclear plant [where a series of accidents—including a partial core meltdown—led to the release of radioactivity]. The reporter asked her whether she was worried about living so close to this dangerous facility. She said, "Oh, no. I know it's safe because even the president of the United States came by here the other day." The reporter said, "Why do you think that makes it safe?" She said, "Because if it were dangerous, they would have sent the vice president." And here I am."

Vice President Mondale also said: "Last week, a respected columnist observed that the president has made his White House more open to the influence from governors than any other president—not just on parochial matters, but on basic budget and program decisions…this nation draws strength in many ways, but none contributes more to the strength and vitality of this nation than to go beyond simply honoring the genius of the American political system—the federal system—to develop a day-to-day working relationship, a two-way dialogue, in which the president of the United States and the governors of the great states of this Union join together in a partnership to fulfill the cherished trust of elected office in our beloved nation."

Selected Policy Positions Adopted:
(1) Calling for deregulation of domestic oil prices and for revenues from a windfall profits tax to be used to develop energy, conserve fuel, and provide emergency assistance to help low- and fixed-income individuals cope with higher energy costs; (2) calling on the administration to support, and Congress to reauthorize, the general revenue sharing program beyond its fiscal 1980 expiration date; (3) supporting greater emphasis on community-based programs, as opposed to institutionalization, in long-term health care programs; (4) urging Congress to pass legislation immediately to allow states to repay debts incurred to the federal unemployment insurance trust fund during the 1975-76 recession through incremental payments rather than increased employer taxation; (5) supporting the establishment of a trust fund for the perpetual care of non-nuclear hazardous waste facilities and sites; (6) supporting the position of the Administration in its negotiations with independent truckers that would enable the President to establish truck weight standards for a temporary period during a declared national energy emergency; and (7) directing NGA's committees to prepare legislation designed to preserve the prerogatives of the states to issue housing revenue bonds for meeting the needs of low- and moderate-income citizens; (8) expressing support for the proposed northern tier pipeline, to transport crude oil from a location in Washington eastward through Idaho, Montana, and North Dakota, and terminating in Minnesota in order to ensure an Alaskan crude oil transportation system located entirely within the United States; (9) urging the Internal Revenue Service to revise proposed regulations to avoid taxing small family farm and closely held business estates at values resulting from speculative pressures rather than at current production value; (10) supporting a moratorium on the ban of nitrite use in cured meats as recommended by the Administration, and calling for a risk-benefit study on the relative health risks to consumers before a final decision was made on such a ban; and (11) commending the President for his efforts to bring Indochinese refugees safely into our country, asking that any legislation dealing with refugees not cut off support to states resettling the refugees, and calling on other countries to join in a collective effort to help solve the refugee problem.