Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

• Agriculture and Rural Development (AG) - long-term implications of the 1988 drought; and GATT [General Agreement on Tariffs and Trade] Agricultural Trade Negotiations
• Economic Development and Technological Innovation (ED) - state business climate report cards; and report of the Lead Governor on Science and Technology
• Energy and Environment (EE) - global climate change
• Executive Committee (Exec) - a view from the Administration; and next steps for federalism after Garcia and South Carolina vs. Baker [court decisions on the federal government's authority to regulate state activity]
• Human Resources (HR) - homelessness; an update on the "Barriers Project" to address welfare prevention, teen pregnancy, adult illiteracy, alcohol and drug abuse, and school dropouts; the Committee's health agenda; and report of the Mental Health Work Group
• International Trade and Foreign Relations (ITFR) - promoting U.S. exports; report of the Subcommittee on Tourism; update on Japan trade expansion project; report of the U.S.-Canadian Task Force; and current U.S. trade priorities
• Justice and Public Safety (JPS) - stemming drug abuse and trafficking; conspiracy laws, RICO [Racketeer Influenced and Corrupt Organizations] statutes, and electronic surveillance; and reducing the demand for drugs
• Transportation, Commerce, and Communications (TCC) - report of the Subcommittee on Telecommunications; and infrastructure financing
• Other Governors' Sessions - special session on education; and special session on rural development
• 1987-88 Chair New Hampshire Gov. John Sununu's Initiative - Restoring the Balance: State Leadership for America's Future
• Plenary Session Discussion Subjects - Federalism; and special session with President Ronald Reagan

Points of Interest:

Governor John Sununu of New Hampshire opened the discussion of federalism by stating that in recent years, there had been an expansion of unfunded or underfunded federal mandates, federal preemption of traditional state authority in areas such as insurance, banking, and communication, and Supreme Court decisions that removed 10^th Amendment protections.

A panel of experts then offered their points of view on the subject of federalism and the role of states. Constitutional law expert Lewis Kaden said that the federal government challenged state autonomy in three respects: (1) through the supremacy clause of the Constitution; (2) by imposing mandates without providing the resources necessary to meet them; and (3) by putting the apparatus of state government to work in the name of federal goals without letting the states exercise their power of choice. Such things as the elimination of poll taxes and the break in the link between federal legislators and their state parties had contributed to a reduction of state influence in Washington, which gave the judiciary a larger role in deciding state autonomy. Kaden recommended that the Governors undertake efforts to make the executive branch more sensitive to the values of state autonomy, which would in turn infuse the process of selecting Supreme Court members; and that state and local government officials think strategically about the litigation process to protect their interests.

Phil Pruitt of USA Today said that during his recent study of how states were run, he found that the old-style backroom politicking, baby-kissing politician had been replaced by a more competitive, streamlined, business-like leader in the Governor's office. Still, Pruitt's research had indicated that many people were not aware of the critical role that state government played in their lives, and that the message of that role needed to be better conveyed.

David Osborne, who had authored a book on the states, said that the federal government's failure during the 1970s to meet the challenges of a new economy left states to take up the slack and experiment with new strategies to make state economies more competitive. For example, it was no longer a matter of how many workers were available at what wages, but rather how well-prepared those workers were—which was a function of state and local government educational and training systems. Osborne went on to say that during the Reagan era, Americans had gone from the view that government was the solution to the view that government was the problem. Now that view was changing again, to seeing government as a catalyst and partner, working with other sectors of the economy to solve problems.

Drew Lewis told Governors that the bipartisan National Economic Commission he co-chaired was charged with making recommendations to the President on federal budget policy. Among the options under consideration were spending cuts—60 percent of which would have to come from entitlements and interest because outlays for defense spending had already been committed for several years and could not be cut, while discretionary spending (e.g., for transportation) had already been cut to the bone. However, any final recommendations would be postponed during this presidential election year.

U.S. Representative Leon Panetta (D-CA), who was expected to become chairman of the House Budget Committee in the next Congress, said that throughout history, it was only when a nation failed to manage its resources that it began to lose power. He noted that the U.S. was spending 15 percent of the federal budget just on interest payments on the national debt. He argued that the answer lay in targeting both defense and entitlement programs, and raising sufficient revenues to cover obligations. When asked by Governors where entitlement changes might be made, Panetta responded that the objective would be to cut growth in entitlements, not reduce existing spending. Possibilities included taxing cost-of-living increases in Social Security at upper income levels, and seeking reductions in hospital costs.

After a voice vote had been taken in favor of a proposal supporting the ability of states to initiate constitutional amendments, several Governors objected to the manner in which the proposal had been considered as well as to its content. Governor Mario Cuomo of New York expressed concern about what would happen if amendment language differed among states. As association chair, Governor Sununu responded that in accordance with the proposal—which had been recommended by the association's Executive Committee pursuant to a task force study—a style committee made up of representatives of the states would develop amendment language to be submitted to Congress, which could in turn revise the language or reject the proposed amendment if there appeared to be any ambiguity on the part of the states. Governor Ned Ray McWherter of Tennessee asked that the motion to support the proposal be reconsidered, but Gov. Sununu ruled that because business on the policy positions had already been completed, it was too late for reconsideration. A motion was offered to suspend the rules to enable the membership to take a roll call vote on the issue, but the motion failed to achieve the three-fourths vote required for adoption. And an attempt to appeal the chair's ruling that business on the policy positions had been completed failed as well.

Memorable Quotes:

Ray Pruitt, author of a book on Governors, said: "We asked [Governors] about the difference between an old-style politician and the Governor's CEO. We asked them about how power has increased or diminished in the Governor's office. We observed and asked about their styles, their strengths. As for the styles, there obviously were some differences; they range from the New England reserve of Vermont Governor Madeline Kunin, to what we consider to be the evangelical zeal of Louisiana Governor Buddy Roemer; western hospitality of Wyoming Governor Mike Sullivan, who gave us a choice between sitting around the coffee table or going out back and sitting with the dog; to the studious approach of Virginia Governor Gerald Baliles; frontier spirit of Alaska Governor Steve Cowper, to the impressive methodical marketing of Michigan Governor James Blanchard. But even given the differences, we found that the old fashioned handshaking...baby kissing, back-slapping...governor puffing on a big cigar is all but gone. That character has been replaced by a more competitive, streamlined, business-type leader..."

David Osborne, author of a book on states as laboratories of democracy, said: "...[Franklin Delano Roosevelt] built important pieces of his New Deal on successful state models. He was lucky, because the states had truly operated as laboratories of democracy in the preceding three decades. Why was that? Because at the turn of the century a new industrial economy had been born in America...an economy that created enormous new problems...It was the governments that were closest to those problems, state and local governments, that first responded to them. Those governments sparked a period of enormous innovation, the progressive era...I think we are going through a very similar process today. Over the past decade, we have lived through the death of the industrial economy and the birth of a new economy. The central force behind that transition has been our emergence into a global marketplace...We have to compete based upon a new kind of manufacturing, using new technologies, making new products, using our workers in new ways...In this new world, we can no longer rely on the federal government to solve all of our problems. When we dominated the world...[w]e could get by with macroeconomic policy, adjustments to interest rates, fiscal policy, tax rates in Washington...But today we are under siege by foreign competition and macroeconomics isn't enough. Competitiveness has become a function not just of the quantitative factors...but of the qualitative factors. It's not just how much we produce, but how much and of what quality. It's not just how much capital is available and at what interest rates; it's what kind of capital; do we have enough patient capital, enough risk capital. It's not how many workers we have and at what wage rates; it's how well prepared they are, how well educated, how well trained and how well they work together...If we are going to deal with those issues, government has to play a role; and because they involve our education systems, our training systems, our universities, our banks, our local entrepreneurs, corporations and labor unions, state and local institutions, the state governments have to be at the center of that arena."

Selected Policy Positions Adopted:
(1) Proposing a housing policy designed to preserve affordable housing and rental assistance, expand the supply of affordable housing and home ownership, and address the problems of homelessness and fair housing; (2) urging Congress to reauthorize the Clean Air Act to address ozone and carbon monoxide noncompliance; (3) urging Congress to develop a trust fund for the support of the land and water conservation program and to emphasize historic preservation under the Land and Water Conservation Act; (4) asking for greater vigilance in enforcement and prosecution of the ocean dumping of medical debris, and calling for federal and state legislation against sewage sludge dumping; (5) clarifying and delineating the formula by which funding to support the employment security and unemployment insurance funds were distributed to states; (6) asking Congress to consider proposing legislation or a constitutional amendment to protect the rights of the states to issue bonds under a tax-free structure; (7) asking Congress to consider proposing a constitutional amendment that would replace the constitutional convention with the option for a Congressional veto of state-initiated proposals; (8) urging Congress to act immediately on pending legislation that would permit states to require out-of-state mail order firms to collect state and local taxes; (9) reaffirming a commitment to universal phone service, while calling for modernizing the nation's communications network and for greater cooperation among levels of government and between government and industry; and (10) urging actions designed to ease the effects of the current drought, continuation of export enhancement programs during natural disasters, adjustment of farm dairy programs so that farms in one part of the country would not be penalized for production deficits caused by natural disasters in other regions, and promotion of the restructuring of farm debt resulting from natural disasters; and (11) reaffirming support for commonwealth status for Guam.