Remarks by President-Elect Barack Obama; Vice President-Elect Joseph Biden; Governor James Douglas (D-VT); and Governor Edward Rendell (D-PA); to the National Governors Association
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OV. RENDELL: Good morning, everyone. It is a great honor to have the president- and vice president-elect here in Congress Hall for what is an unprecedented meeting.
You know, about 10 days ago, the president-elect said that the economic recovery plan will require the input and participation of the nation's governors. And he went on to say that his job was to keep an ear to what's happening throughout the country, and not just design plans in Washington, D.C.
Shortly after the president-elect made that statement, his transition team contacted the NGA, asked us to set up this meeting, and that's why we're here today. And this is an unprecedented opportunity you're affording the nation's governors to have input on something that we believe is crucial to beginning the process of turning this country's economy around.
You know, today we're going to get a chance to express to you our concerns and our needs. But more than just voicing our concerns and our needs, I think all of us want to pledge to you, number one, our help in any way we can to help you design and implement parts of this plan, and our help in trying to go to the American people and sell this plan and tell them the value of it and why it's so needed.
This morning I was on one of the morning TV shows, and before I came on, I was listening to the earlier part of the show, and one of the newscasters said today the governors are meeting with the president-elect in Philadelphia to beg for money. And Mr. President- elect and Vice President-elect, that is definitely not why we are here.
First of all, all of us realize our responsibility to deal with this financial crisis ourselves in our states. For example, in Pennsylvania, by the end of this month, we will have cut half a billion dollars out of our operating budget, and you can imagine the pain that went with those cuts. That's happening on a state-by-state basis.
Secondly, our -- (ask ?) today is first and foremost for our people, things that you've already talked about, like extending unemployment compensation benefits, the time for those benefits; things like increasing food stamp availability. Those are things that don't go to us as governors, don't go to our budgets, but help our citizens.
We also are going to ask you to -- as you've outlined, to help create jobs -- the first plan from Washington, D.C., that will produce new jobs, produce new jobs and produce new business for American companies.
And lastly, we're going to ask you to help us help keep the safety net intact. As the economy worsens, of course, more and more people come to us for safety net coverage -- things like Medicaid. As the economy worsens, the amount of people who are eligible and who want Medicaid relief increases exponentially. That's a program where there's already federal and state sharing of the economic burdens, and we may ask for some help in those areas. But we are here with the understanding that we have to be not only participants but the lead in dealing with the financial problems that are besetting our states.
We commend you for your swift action here and for your desire to have this Congress enact the elements of the plan, so you can sign it on Inauguration Day. I personally believe that nothing could lift the American people's spirits more than having an economic recovery plan into action, passed into action, on the first day of a new administration.
We also are committed, NGA is committed, as a policy, to work with you on the short-term infrastructure recovery plan and on long- term far-reaching infrastructure revitalization for this country.
But we just don't need new resources for infrastructure and need federal help on that, and we do need some additional resources, but we also want to find, Mr. President-elect, a better way of ensuring that those resources are handed out based on merit, not based on politics. Your suggestion during the campaign for an infrastructure bank, the Dodd-Hagel legislation, if that could be put into the recovery plan -- and I know there's limited time -- we think that would be a very, very important element for that recovery plan.
And lastly, if we're going to really make infrastructure work -- and I know there's been a lot of discussion about it didn't work in Japan -- well, it has to be fast. We have to have shovels in the ground quickly. And that means that we have to find ways to eliminate state and federal bureaucratic hurdles that slow down the process of revitalizing our infrastructure.
And lastly, we're, I think, almost to a person, very excited that you're making the development of renewable energy, using it as a job creator, in this plan. We've seen firsthand in many of our states that it does just that -- conservation, efficiency -- but even the development of new technologies.
The president-elect had the opportunity during the campaign to visit a wind energy manufacturing facility where they manufacture those big 65-foot blades. It was in a closed-down steel plant that had been closed for 15 years. And many of the original workers in that steel plant were working for the wind energy company. Wind -- renewable energy can be a great and powerful job creator.
We'd also like to recommend that as you're looking at renewable energy, if you can get the Congress to pass, number one, legislation making the tax credit permanent for renewable energy, and two, federal portfolio standards -- if that could happen between now and January 20th, that would also help the industry take off.
So we thank you and the vice president-elect for being here. As I said, we have looked at our records, and to the best of our knowledge, nothing like this has ever happened before, where during a transition an administration has asked the governors -- and we have over 50 governors here today -- for their input on what is the most important first thing the administration can do.
And with that, I'd like to turn it over to our vice-chair, soon to be chair, Governor Douglas of Vermont.
GOV. DOUGLAS: Well, Governor Rendell, thank you so much for, first of all, your hospitality here today, and your leadership of the association. It's particularly exciting for me because it was in this very space in 1791 that Congress voted to admit Vermont to the union. So I'm proud to be here and will not entertain any motions to rescind that -- (laughter) -- this morning.
This is a unique opportunity, a historic one, as Governor Rendell has indicated, where we have the opportunity to present our concerns, our challenges, our perspectives on the fiscal crises we're facing to the president-elect and vice-president-elect of our country. The tremendous response that we've gotten from governors to this opportunity shows how important it is, how critical it is that we all work together at the federal and state levels to address the challenges we're confronting.
Let me give a brief perspective on the magnitude of the problem that we're facing at the state level. As Governor Rendell indicated, governors and legislatures have been working hard to reduce levels of spending this year. It's estimated that about $30 billion in budget gaps exists currently, and by the end of the fiscal year, which is the June 30th for most states, it'll be around $60 billion.
Because the states' fiscal crises generally lagged the economic downturn of the country, that will increase during fiscal 2010, probably to the magnitude of another $120 billion. So we're looking at about a $180 billion anticipated problem over a two-fiscal-year period.
As you know, states don't have the option of running budget deficits in most cases. Vermont's the only exception, with no legal requirement, but we're fiscally responsible anyway. So we don't have the flexibility to run deficits, as the federal government does. So we have to work together, because these are federal-state partnership programs in many cases, to get out of this situation.
We want to make sure that states don't take actions that will make the economic and fiscal crisis worse than it already is, either tax increases or budget cuts that can slow recovery. So economists across the board, across the political spectrum, seem to agree that targeted investments by the federal government in state budgets can be one of the most effective ways to turn this around as quickly as possible.
So we have several suggestions, as Governor Rendell indicated. First, some support for infrastructure projects: one economic analysis suggests that for every billion dollars of infrastructure expenditures, 35(,000) to 40,000 jobs can be created. And there are a great number of projects ready to go. And secondly, anti-cyclical investments in state-federal programs so that safety nets are preserved and we aren't required to reduce cuts in important efforts in our states. Thirdly, a look at the tax code to see if some structural changes there would be helpful to encourage growth and investment and competitiveness.
And as I suggested already, because these are a state-federal partnership in many of our programs, the infrastructure for service delivery is there. We administer the programs with a combination of state and federal resources. So the delivery system is in place; we can get the job done quickly, efficiently and as cost-effectively as possible.
As I've indicated, as Governor Rendell has, we're really all in this together. The state and the federal governments represent the same constituencies. It's the people of our states and of the United States who are feeling the pinch of this economic downturn.
And that's why it's so important that we all work together and why I'm so grateful that you've come here today to Philadelphia to listen to the concerns and thoughts of the governors from around the United States.
And with that, I'd like to turn it over to the vice president- elect; thank him specifically for coming today, for his leadership. And we look forward to working with you, sir, as we continue to address the fiscal and economic challenges of our states.
VICE PRESIDENT-ELECT BIDEN: Well, Gov, thank you very much. (Applause.)
Ed, thanks for -- thanks for setting this up.
Ed Rendell and I have been friends for years. He's been sort of my second governor, along with Jon Corzine over in New Jersey in the Delaware Valley. We're small, but -- I just want you all to note, the reason I love these kinds of get-togethers is you sit in the order in which your admission to the union occurred. That's the first time Delaware -- the new governor-elect sits in the first seat there.
Governor, it's nice to see you sitting there, Jack Markell.
I want to thank all of you for being here. And Governor Palin, I want to thank you particularly. I might -- I might point out, as I told you, we walked in, since the race is over no one pays attention to me at all. (Laughs, laughter.) So I maybe will walk outside with you or something later and -- (laughter) -- they'll say hello to me or something. Great to see you, Governor, and thank you.
And I -- by the way, I think it is -- I hope, you know, the whole country can see a sort of a metaphor for the fact that this election is over and here we are. We're all together. We're all dealing with a common problem. We're all -- there is -- this is not -- as was stated so many times by all of you and us, this is not a Democrat or Republican problem. We got ourselves a problem.
And the truth of the matter is that during this campaign, I've had an opportunity like -- like all of us who ran, to be in many of your states and many of your -- in many of the cases, I rode on buses on long trips across half a dozen of your states with some of you in the bus. And I don't know how many times I heard the commentaries -- we'd ride by -- and you heard it too, Barack. This used to be -- and point to a facility and say, "This used to be a steel mill. This used to be a manufacturing plant. This used to be."
Well, the fact of the matter is, the -- I've heard from all of you as well that in this town there were 1,200 jobs, and now the town is actually losing population, or in this facility -- and the question is, here, you know, how we're going to know we turned the corner. I think we're going to know we turned the corner when you ride by those same facilities and instead of hearing you and us say, "This used to be," hear us say, "This is going to be -- this is going to be a new facility to build windmill parts and windmills. This is going to be the place where we are going to employ x number of people."
And the truth of the matter is -- one of the reasons why the president-elect wanted this meeting to take place is that we understand we need to build a stronger and a more consequential partnership with each one of you. And that's why we are here, not only to discuss with you what -- in broad strokes what we think needs to be done, but to listen, because you are, as that old expression goes, you're where the rubber meets the road.
You all, as have pointed out, don't have the flexibility the federal government has, which I assume that means you're not going to criticize us for running a deficit to help you. I know none of you would do that. But all kidding aside, you know, we think there's a need for a different relationship between the federal government and the governors.
You know, Eric Sevareid, who used to be a commentator in television, once said to President Kennedy -- he said: It doesn't make sense when two people are sitting in a boat, for one of them to point a finger accusingly at the other and say, "Your end of the boat is sinking."
The truth of the matter is that as corny as it sounds, we are all in this boat together. And if you sink, the country sinks.
If you float, the country does very well. And so Barack and I recognize this. And we recognize that you've all been hit incredibly hard by this economic crisis. And that has been pointed out by the governor.
You don't have the flexibility that the federal government has to deal with the crises immediately at hand. Already 41 of your states are looking at budget shortfalls for next year. And that's why help for you, everything from direct aid to countercyclical investments to benefit programs to infrastructure investments, will be key parts of our economic plan.
On infrastructure specifically, I know, I sound like a hobbyhorse to the governor, Governor Rendell and others on this. But we have, I think, a huge opportunity, a huge opportunity. China invests between 7 and 9 percent of their GDP in infrastructure projects. We invest as a nation, over the last decade or more, less than 1 percent.
And there's a reason that when you turned on the Olympics to watch them, this past summer, you saw a maglev train going over 200 miles an hour in supposedly a third-world country, in terms of its economy, blowing into town, dealing with the environmental problems they have as well as transporting people in a way that we don't even come close to being able to do.
And as Barack has pointed out and Jon Corzine knows, I may have a bit of a pro-rail bias. But I think that -- think of the jobs we can create, in both construction and innovation, if we make similarly bold investments here in the United States, as well as the environmental payoff that flows from that kind of investment.
We all know the criticism. We hear it, that Japan invested over a trillion dollars, in infrastructure, and nothing happened. Well, it's all about how rapidly, how rapidly we can get these projects up and running. And many of you if not all of you have, on the boards, engineering that's already been done, plans that already are ready to go that can be, that can be kicked off very, very quickly.
And that's why we envision fast-track funding for thousands of these ready-to-go projects, across the country, that can quickly, quickly put people back to work and equally as important lay a long- term foundation for how it's going to contribute, to the overall economic growth of the country, for the next couple decades.
In the longer-term, we're calling for the creation of a national infrastructure reinvestment bank that will help us to make investments that we need, to build out the 21st-century transportation system, while creating jobs and as was pointed out, by the president-elect earlier and by Governor Rendell, by taking politics out of the infrastructure spending.
Such investments have the added advantage, I might point out, of making our companies based here, in the United States, more competitive when they compete internationally.
So this is more than a zero-sum game. I mean, there's a lot of benefits that flow from these investments, beyond the immediate investment of generating new jobs and money into the marketplace.
And so we believe together we can make this country again, in the words of Ralph Waldo Emerson, a place of beginnings, of projects, of vast designs and expectations. And despite all of our challenge, I'm struck by the hopefulness that not only the people of America have, but you as governors, you as leaders, have.
We ought to be able to -- we understand how serious these challenges are, but we also believe that, with leadership from all of us in this room, that there's not a single thing we can't do. We've paced (sic) -- to state the obvious, we've faced more difficult times than this in the past.
And perhaps most importantly, in my view, at least, the president-elect, Barack Obama, understands that change is a means, not an end, and together that we can -- can change what used to be there to what is going to be there. I don't think it's beyond our capacity to do that.
And let me conclude by saying that I know you share this view -- at least I believe most of you share this view -- this is the time for us to be bold. This is the time for us to seize the moment and the opportunity to literally set America back on a glide path of real, genuine prosperity and growth. I think it's a genuine opportunity. I know Barack feels that way even more passionately.
So it's now my pleasure to introduce the man who literally has inspired a nation and whom I'm honored to join as a partner, President-elect Barack Obama. (Applause.)
PRESIDENT-ELECT OBAMA: Thank you. Thank you. Thanks. Thank you, everybody. Thank you. Thank you.
Well, to begin with, let me thank Governor Rendell for his wonderful hospitality in this extraordinary setting. Governor Douglas, thank you so much for your outstanding work. And to all of you, I've -- one of the great pleasures of running for president is the opportunity to meet people all across the country. And I've become friends with many of you, and those of you who I have not yet gotten to know, I'm hopeful that over the course of the next four years that I've got an opportunity to work with you closely.
You know, in fact, being with governors is a little bit like a homecoming for me because, while I stand here today, or sit here today, as president-elect, I will never forget the fact that I got started in state government. And it is in state and local governments that the most meaningful changes take place and some of the most difficult decisions have to be made. And nobody, I think, is more in tune and in touch and mindful with what is going on across the country than the nation's governors. So I'm going to spend most of my time here today listening, and not making a long speech. I do want to give you a little bit of context for how we are thinking about the issues at this point.
I recognize that every single one of you is struggling to come up with a budget at a time when you're facing great and growing needs. More and more people are turning to you for help for health care, for affordable housing, to prevent foreclosures, even as the credit markets are tightening and tax revenues are making it more difficult to provide that help.
Forty-one of the states that are represented here are likely to face budget shortfalls this year or next, forcing you to choose between reining in spending and raising taxes.
Jobs are being cut, programs for the needy are at risk, libraries are being closed and historic sites are being closed.
Right here in Philadelphia, as Ed has already remarked, we've got over 200 workers being laid off. Hundreds of positions are being left unfilled or are being eliminated.
Meanwhile, virtually all of you are facing the additional challenge of state constitutions that require you to balance your budgets; so you're placed in an extraordinarily painful choice of violating your constitutional responsibilities or upholding those responsibilities at the expense of helping families.
So to solve this crisis and to ease the burden on our states, we're going to need action, and we're going to need action swiftly. That means passing an economic recovery plan that helps both Wall Street and Main Street. And this administration does not intend to delay in getting you the help that we need.
We intend to help save or create 2.5 million jobs. We intend to put tax cuts into the pockets of hard-pressed middle class families in your states. And we intend, as has already been discussed, to start making a down payment on the critical investments that are going to be necessary to sustain long-term economic growth, as well as pull us out of the current slump.
But the reason this meeting was so important to Joe and myself is because we recognize that change is not going to come from Washington alone. It's going to come from all of you. It will come from a White House and state houses all across the country that are working together, and that's the kind of partnership that I intend to forge as president of the United States.
I hope that this is the beginning of laying that foundation. Over the next few hours, I'm looking forward to hearing from you about the problems you're facing; learning about the work that you are doing, experiments that are working, things that are not working; where you think an investment on the part of the federal government will make the biggest difference; how we can reduce health care costs, rebuild our roads, our bridges, our schools, and ensure that more families can stay in their homes.
But the partnership we begin here cannot, and will not, end here. As president, I'm not simply asking the nation's governors to help implement our economic plan; I'm going to be interested in you helping to draft and shape that economic plan. My attitude is, is that if we're listening to the governors, then the money that we spend is going to be well spent. And it means that it's going to get working faster and the people in your states are going to experience prosperity sooner.
Now, let me just wrap up by saying this. I know these are difficult times. I don't think anybody here is viewing the situation through rose-colored glasses. We're going to have to make some hard choices in the months ahead about how to invest these tax dollars. We're going to have to make hard choices; like the ones that you're making right now in your state capitals, we're going to have to make in Washington.
And we are not as a nation going to be able to just keep on printing money, so at some point, we're also going to have to make some long-term decisions in terms of fiscal responsibility. And not all of those choices are going to be popular. But what I can promise you is this, that I'm going to listen to you, I'm going to seek your counsel.
And by the way, I'm going to listen to you especially when we disagree, because one of the things that has served me well, at least, in my career is discovering that I don't know everything. And all of you, I think, are going to be extraordinarily important in keeping us on track, not allowing Joe and myself to get infected with "Washingtonitis," and to constantly be reminded of the realities that are happening to folks back home.
A special message I want to deliver to my Republican colleagues who are here. I offer you the same hand of friendship, the same commitment to partnership, as I do my Democratic colleagues. There is a time for campaigning and there is a time for governing. And one of the messages that Joe and I want to continually send is that we are not going to be hampered by ideology in trying to get this country back on track. We want to figure out what works.
That doesn't mean that we're not going to have some disagreements, but what it does mean is that if you can show me something you are doing that's working, or if you tell me that, you know, this program or this regulation is hampering us from doing smart things that will advance the interests of our state, then you're going to have a ready ear. (Applause.) And that is going to be something that I want everybody to understand.
So -- I think it was Justice Brandeis who said, during a period of much greater turmoil in the markets -- although I haven't checked what's happening right now, but -- than we're experiencing at the moment -- he said: A single courageous state may, if its citizens choose, serve as a laboratory, experimenting with innovative solutions to our economic problems. And that's the spirit of courage and ingenuity and stick-to-it-ness that so many of you embody. That's the spirit that I want to reclaim for the country as a whole, one where states are testing ideas, where Washington is investing in what works, and where you and I are working together in partnership on behalf of the great citizens of this nation.
So, with that, let me stop. And I think that I'm going to hear some presentations from some of the governors, and then I will be available to answer questions, and let's have a conversation for the next few minutes.
I think at this point the press may be leaving, so you guys can actually tell me what you believe. (Laughter.)
All right. Thank you. (Applause.)