Obama, Governors Talk Stimulus Spending

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THE WHITE HOUSE - President Barack Obama told the nation's governors today that his administration will quickly release $15 billion from the stimulus package to help them cover the rising costs of Medicaid.

The recession has had a huge impact on state budgets.  Public officials say they are struggling with meeting the costs of the Medicaid program for the poor.  The program is underwritten by the federal government and the states.

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Obama spoke Monday at the conclusion of the three-day National Governors Association conference.  He told the governors that the money for the Medicaid programs would be released by the middle of the week.

He reminded the governors for the need of accountability and transparency as to how the stimulus funds are spent.

He also addressed some of the governor's concerns about the stimulus plan.  Some have called it large and wasteful.

"I think there are some very legitimate concerns on the part of some about the sustainability of expanding unemployment insurance. What hasn't been noted is that that is $7 billion of a $787 billion program. And it's not even the majority of the expansion of unemployment insurance," Obama said.

He added, "If we agree on 90 percent of this stuff, and we're spending all our time on television arguing about 1, 2, 3 percent of the spending in this thing, and somehow it's being characterized in broad brush as wasteful spending, that starts sounding more like politics. And that's what right now we don't have time to do."

But some of the governors say they don't want the stimulus money.

Even after wining and dining governors at a White House black-tie event, President Obama is still having a tough time selling his plan to stimulate the economy to at least some customers.

"There are going to be some differences both within your states and in the country, as far as how we address these problems," Obama told the assembled governors.

Obama has more support from Republican governors than he did with GOP lawmakers on Capitol Hill.

"What the President is trying to do is not only help my state, but help my people," said Gov. Charlie Crist, R- FL. "And that's really what this is all about."

Some Governors Not So Sure

But other governors are not sold on the plan

"If all they do is borrow federal money and give it to the states, all we're really doing is delaying the inevitable," Gov. Bobby Jindal, R-LA, told NBC's Meet The Press on Sunday. "We're eventually going to have to make these hard choices anyway."

At least five Republican governors have hinted that they may forego some of the funding, complaining that the stimulus is too large and that some of the provisions, like unemployment, may result in raising taxes when the federal money dries up.

"We would have to raise the unemployment insurance tax, which is a tax on employers for employing people," said Gov. Haley Barbour, R-Miss. "When you want more people working, the last thing you want to do is put an extra tax on employment."

Others Will Take All They Can Get

But with some states desperately strapped for cash, some Republicans and Democrats say they will take what the others don't want.

"I'm more than happy to take his money or any other governor in this country that doesn't want to take this money," Gov. Arnold Schwarzenegger, R-CA said on ABC's This Week.  "I take it, because we in California need it."

"You better believe I'm going to take every dollar that is coming to Michigan," Gov. Jennifer Granholm D-MI told Fox News Sunday. "And if my colleagues here in Minnesota and South Carolina don't use theirs, I am going to be first in line."

Officials say the President is stressing the need for accountability and transparency in how governors spend the money. But talk of the economy doesn't end with the stimulus plan. This afternoon, Obama hosts what's being called a fiscal responsibility summit to address the $1.3 trillion deficit. It's something the President wants to cut in half in four years and it's a goal more governors would readily support.

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CBN News
John Jessup

John Jessup

CBN News Washington Correspondent

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