Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

• Economic Development and Commerce (EDC) – strategic investment to promote economic growth; North American Free Trade Agreement (NAFTA); principles to ensure workforce excellence; and surface transportation funding
• Executive Committee and Standing Committee Chairs – strategic investment and the federal deficit
• Human Resources (HR) – Rethinking Welfare: What Does and Doesn't Work
• Natural Resources (NR) – funding water infrastructure
• Other Governors' Sessions – roundtable discussion among Governors and CEOs on economic growth and development incentives; Task Force on Health Care; Task Force on Education; and Task Force on State Management
• Plenary Session Discussion Subjects - Federalism and the federal deficit; National Education Goals; health care; and transportation

Points of Interest:

U.S. Senate Majority Leader George Mitchell of Maine told Governors that he would be participating with First Lady Hillary Clinton in the development of health care reform legislation. He said that reform needed to incorporate the following principles: (1) cost control; (2) universal access; (3) greater emphasis on primary and preventive care; (4) retention of consumer choice; and (5) substantial state control and flexibility.

Senator Mitchell and Senator Bob Dole agreed on a number of facets of deficit reduction and entitlement restrictions, among them that: (1) deficit reduction would require giving serious consideration to cutting not just defense and discretionary domestic spending but also spending for entitlements; (2) nonetheless, any attempt to limit entitlement spending was politically risky for elected officials; and (3) the Social Security trust fund was sound, but Medicare’s instability needed to be addressed, perhaps by basing Part B premiums on income.

Senator Dole also referred to the peace dividend and the fact that although $300 billion had been cut from the defense budget, the reduction resulted in job losses—as many as 1.6 million—associated with the closure of 800 military bases and installations worldwide and the cancellation of 120 weapons systems.

With respect to welfare reform, President Bill Clinton told Governors that the Family Support Act of 1988 had never been fully implemented because of rising health care costs, slowing of the economy, and a decline in government revenues that limited the ability to fund education and training programs for welfare recipients. Nonetheless, innovative state programs were helping to move people off welfare and into jobs. The President said that he was about to announce formation of a welfare reform group to work with Governors and congressional leaders in the development of workable welfare reform whose guiding principles would be: (1) welfare should be a second chance, not a way of life, meaning that welfare beneficiaries should receive sufficient training and education to be employed within two years; (2) work should pay, so the Administration proposed an expansion of the Earned Income Tax Credit; (3) child support enforcement needed to be toughened; and (4) state experimentation should be encouraged, on the condition that the federal government measured the effects of those state programs.

Transportation Secretary Federico Peña said that his department’s priorities would focus on ways in which the transportation system could be improved to help make the U.S. more competitive globally, as well as to integrate transportation with environmental concerns. During a question and answer session, Governors urged that the federal gas tax be shifted back to helping improve the nation’s infrastructure.

During discussion of a policy proposal to clarify the intent of the Indian Gaming Act, Governor Joan Finney of Kansas disagreed that Governors should take any position that would interfere with the ability of Indians to advance economically. But other Governors argued that the federal government was overstepping its boundaries in allowing tribes to open gaming operations against the will of states.

Memorable Quotes:

Senator Bob Dole said this about the $4 trillion debt: "…with $4 trillion you could buy an average-sized in-ground concrete swimming pool for every homeowner in America, pay a 40-hour-a-week minimum wage paycheck to every person in the world, pay a year’s tuition to Harvard for every high school student in the country and send every American over 18 on a two-week Club Med vacation and still have over $3 trillion left."

During a discussion regarding transportation issues, Governor David Walters of Oklahoma told Transportation Secretary Federico Peña: "…I love Ann Richards [Governor of Texas] and I occasionally have a fond thought of Texans…But there is nothing genetically that should require Oklahomans to take six hours to get to New York City when it only takes a Texan two-and-one-half hours to get [there]. The [airline] hub system is a complete failure. It is inefficient. Southwest Airlines is the only airline that’s making money, because they go point to point…More importantly, we have private industry determining which states are going to have a level playing field for economic development and which aren’t, because we are denied that access to the major economic markets throughout this nation."

Selected Policy Positions Adopted:
(1) Calling for a basic federal framework for state-organized purchasing cooperatives for affordable health insurance, and for states to have flexibility under federal tort and liability standards to design and regulate their own programs; (2) specifying ways in which the states could be most helped by the federal government with respect to Medicaid waivers and/or relief; (3) continuing support for the North American Free Trade Agreement (NAFTA), so long as environmental concerns and job security were addressed; (4) calling for full funding for the Intermodal Surface Transportation Efficiency Act (ISTEA); (5) offering bipartisan solutions for reducing the federal budget deficit, with emphasis on redirecting domestic discretionary spending toward productive investment, reducing defense spending in a rational way, and including the consideration of constraints in spending for entitlement programs if necessary; (6) urging the federal government to meet its responsibilities with respect to the cost of refugee resettlement; and (7) advocating the establishment of a cost-neutral accessory insurance fund to help deal with natural disaster risks.

Presidential Addresses: