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Governors to push for flexibility with funds

MONDAY, FEB. 23, 2009

WASHINGTON – After poring over the historic $787 billion economic stimulus act, the nation’s governors will meet with President Obama this morning and said they would plead for flexibility as they lay out plans to spend the federal money to jolt their teetering state economies.

Leading Republican governors continued their sparring Sunday by offering divergent views of the recovery act, with Southern conservatives saying they would reject some stimulus funds and coastal moderates embracing Obama’s plan. But governors of both political parties said in interviews that the Obama administration should give states flexibility to make smart investments in education, health care and transportation.

“We know our states well and we know what works and what doesn’t work,” said New Hampshire Gov. John Lynch, a Democrat.

Indiana Gov. Mitch Daniels, a Republican, said the stimulus money is “already in fairly narrow buckets” and that the Obama administration should give states discretion in spending it.

“If they really want to see the money put to work quickly, they would take a radically – radically for Washington – flexible attitude for the use of it,” Daniels said. “What I’m afraid we’re going to get instead is a micromanaged structure.”

The stimulus plan will dominate the governors’ meeting at the White House, and Obama is likely to deliver a message similar to one he gave a gathering of mayors last week: His administration will hold officials at all levels of government accountable for how they spend stimulus money.

Valerie Jarrett, a senior adviser to Obama, said the president would call for “accountability, responsibility, metrics for success” and for “making sure that we spend the money wisely and prudently in a way that is tied to the objective of the bill, which is to create jobs,” Jarrett said. “We’re doing this to jump-start our economy and help create jobs here in the United States. So every penny we spend should be measured against that objective.”

The governors are in Washington for a three-day National Governors Association meeting. Many said they have questions about how the stimulus money can be spent in their states.

“Most of the meeting is going to concentrate on how we implement the stimulus, what some of the rules are, where some of the money is going to flow, the competitive grant areas,” said Pennsylvania Gov. Edward Rendell, a Democrat and chairman of the association.

Budget director Peter Orszag met with the governors at a closed-door luncheon Sunday and answered some of what Virginia Gov. Tim Kaine, a Democrat, described as “picayune” concerns about the bill.

It was not lost on governors that Obama was hosting them at the White House for his first black-tie state dinner. On Sunday night, they were treated to a four-course meal featuring Chesapeake crab, wagyu beef, Nantucket scallops and huckleberry cobbler.

With governors talking stimulus, an intraparty fight among prominent Republicans – including several mentioned as possible 2012 presidential candidates – spilled onto the airwaves as they sparred over how much stimulus money to accept.

South Carolina Gov. Mark Sanford came out swinging against the stimulus bill, saying his state may not accept all of the federal funds, including money for unemployment benefits.

“At times it sounds like the Soviet grain quotas of Stalin’s time – ‘X’ number of jobs will be created because Washington says so,” Sanford said on “Fox News Sunday.”

Louisiana Gov. Bobby Jindal, a rising star in the GOP who will deliver his party’s response to Obama’s address to Congress on Tuesday, said he would accept stimulus money for many projects, but not funds to expand eligibility for unemployment because it ultimately would result in employers paying more taxes.

But other Republicans urged bipartisanship. California Gov. Arnold Schwarzenegger likened the economy to a cancer patient. “You want to see this team of doctors around you have their act together, be very clear and say, ‘This is what we need to do,’ rather than see a bunch of doctors fighting in front of you and arguing about the treatment,” Schwarzenegger said on ABC’s “This Week.” “I mean, that is the worst thing. It creates insecurity in the patient.”

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