NGA Salt Lake City Clips

Governors ............................................................................................................................2 NY Times: No Matter How Debt Debate Ends, Governors See More Cuts for States...2 NY Times: States Money Woes Show No Favorites.....................................................4 AP: Governors talk education during gathering in Utah ................................................6 AP: Governors reflect partisan divide in debt debate .....................................................8 Salt Lake Tribune: Governors in Salt Lake City urge D.C. to solve the debt crisis now ................................................................................................................................10 Wash Post: For governors, a personal toll from budget battles.....................................11 Wall St. Journal: Governors Demand Quick Debt Agreement......................................14 Reuters: Governors urge US debt deal to avoid 'embarrassment'..................................15 Bloomberg: Governors Raising Petition Seeking Congressional Debt-Limit Deal.......20 Bloomberg: Minnesota Impasse, Wisconsin Recall Show States Mimic Washington..22 CNN: GOP governors looking to their own as 2012 race takes shape .........................25 Star-Ledger: Gov. Christie unusually quiet at National Governors Association conference in Salt Lake City..........................................................................................29 Star-Ledger: Gov. Chris Christie recounts tale of N.J. pension overhaul during closeddoor meeting at National Governors Association..........................................................30 Gov. OMalley...................................................................................................................33 AP: Dem gov: To win in 2012, GOP wants to hurt economy.......................................33 Wash Post: Partisan-osaurus threatening Washington, OMalley says.......................35 Wash Post: OMalley: Silence of GOP governors on debt impasse is deafening.......36 Washington Examiner: Md. bond sale hinges on federal debt talks..............................37 Bloomberg TV: O'Malley Says U.S. Default Would `Wreck' Jobs Recovery..............38 MSNBCs Daily Rundown: Gov. OMalley: Governors worried about credit ratings. 39 Gov. Gregoire....................................................................................................................39 The State Column: Gov. Chris Gregoire: States are in a fragile state of recovery....39 Gov. Quinn.........................................................................................................................40 Chicago Sun Times: Gov. Pat Quinn to Salt Lake City for governor's meeting; Democratic governors fund-raiser.................................................................................40 Gov. Hickenlooper.............................................................................................................41 Gov. Markell......................................................................................................................42 The News Journal: Markell in line to lead governors....................................................42 PBS Newshour: Governors Tell Washington: Find a Compromise on Debt Limit.......43

Governors
NY Times: No Matter How Debt Debate Ends, Governors See More Cuts for States
By MICHAEL COOPER

SALT LAKE CITY The rancorous debate in Washington over whether to raise the federal debt ceiling is alarming many of the nations governors from both parties, who fear that whatever the outcome, much-needed money will almost certainly be drained from their states. If the federal debt limit is not raised, several governors said as they gathered here on Friday for the semiannual meeting of the National Governors Association, the ensuing default will harm the economy, make it difficult for states to borrow money and delay some of the vital federal payments that states count on for everything from Medicaid to unemployment benefits. But even if the debt ceiling is raised, as many governors expect it ultimately will be, states could still pay a high price. Both Democrats and Republicans in Washington want to pair any increase in the debt limit with deep new spending cuts cuts that many governors fear will hurt their states as they are still recovering slowly from the Great Recession. If I can use a whitewater analogy here, the two rocks we need to shoot between is, on the one side, being needlessly driven into default, which will kill the jobs recovery, said Gov. Martin OMalley of Maryland, the chairman of the Democratic Governors Commission. The other rock is massive public sector cuts, by whatever name, that would also kill the jobs recovery. Gov. Haley Barbour of Mississippi, a Republican, said that a default stemming from a failure to increase the borrowing limit would be terrible for states. But he said that states must also brace themselves for managing a new set of cuts even if the limit is raised. No matter what happens, states are going to get less money from the federal government, he said. The uncertainty for states, coming just two weeks after most put new budgets into effect, was a new black cloud on the horizon for governors just when many thought they would have a moments respite. State tax collections are improving, but are still below their prerecession levels, and this month the federal stimulus aid that has helped states balance their budgets in recent years dried up. Now states, already struggling to pay for Medicaid for the many people who lost their jobs and health care in the downturn, face the prospect of less federal money for it. The impact of the standoff in Washington is already being felt in states.

Moodys Investors Service warned more than a dozen states this week that their credit ratings would be re-evaluated in light of the uncertainty in Washington, which could saddle them with higher borrowing costs. Governor OMalley learned that Maryland was one of them when he stepped off the plane here. This happens at a time when were about to go out for a bond sale, he said. Governors from around the country including Christine O. Gregoire of Washington, a Democrat, and Scott Walker of Wisconsin, a Republican said that employers in their states had been reluctant to hire new workers because of the uncertainty. And Gov. Lincoln Chafee of Rhode Island, an Independent, said that the threat of dwindling federal aid gave him pause last week before he signed a bill in which his state agreed to pay for heating assistance for the poor that the federal government was expected to cut. My argument and I did sign it was that this was the first of many, he said. I dont know how much Rhode Island taxpayers can do that. Behind the scenes, governors have been trying to avert the worst cuts by twisting the arms of their Congressional delegations and working nervously with their budget directors. Some even held a conference call with Vice President Joseph R. Biden Jr. Governors in both parties said they were most worried by talk that both President Obama and Congressional Republicans wanted to cut Medicaid payments to the states by $100 billion over the next decade. The leaders of the governors association its chairwoman, Governor Gregoire of Washington, and its vice chairman, Gov. Dave Heineman of Nebraska, a Republican wrote to Mr. Obama and Congressional leaders in both parties last week urging them to reconsider, warning that such a cut would result in reduced Medicaid expenditures, in increased state taxes or reductions in K-12 education, transportation and public safety funding. But deep partisan divisions remain among the governors. The Democratic Governors Association held a news conference calling for the debt ceiling to be raised, and saying that any accompanying plan to reduce the federal deficit should include tax increases as well as service cuts. And they complained that moderate Republicans were failing to speak up to avert catastrophe. We want this deficit solved, and we want it solved in a bipartisan way, but we dont want it solved on the backs of states, said Gov. Beverly Perdue of North Carolina, a Democrat. Because at the end, its just another pass down to us, which results in state unemployment, state layoffs. Some Republican governors, though including Rick Perry of Texas and Nikki Haley of South Carolina, neither of whom are members of the association have said that the debt limit should not be lifted without also moving toward a constitutional amendment requiring a balanced federal budget. Such an amendment is unlikely to pass in Washington.

Other Republicans including Mr. Barbour and Mr. Walker said that they hoped that a default could be averted but opposed raising taxes and said that Washington should seize the moment to cut spending significantly. The normally outspoken Gov. Chris Christie of New Jersey, a Republican, declined to take a position on the debt ceiling. Im not doing any press today, he said, when asked about it here. Some states are already weighing contingency plans. Governor Walker said that he had asked his administration this week to study what would happen if the federal government did not raise its borrowing limit, and also what to expect in the way of likely cuts if it did. Massachusetts could face a serious cash flow issue if the federal debt limit is not raised and the state stops receiving the $200 million in federal reimbursements it counts on each week for programs like Medicaid and food assistance, Gov. Deval Patrick, a Democrat, wrote Friday in a letter to Congress. He wrote that state governments are still reeling from the recession and can ill afford to bear the brunt of such a preventable crisis. Most governors here said that while the talk of not raising the debt ceiling was alarming and irresponsible, ultimately not raising the ceiling was unlikely. Gov. Brian Schweitzer of Montana, who wore his trademark bolo to a news conference held by the Democratic Governors Association, used a Western analogy to explain why he thought a federal default would be averted. Aw, hell, theyre not going to do it, he said. Listen: remember Blazing Saddles? Remember the scene where the sheriff holds the pistol to his own head? Ultimately, he said, Theyve got to come together and put together a deal.

NY Times: States Money Woes Show No Favorites

By MICHAEL COOPER

SALT LAKE CITY Arizona began cutting more than 100,000 people from its Medicaid rolls this month. Illinois, even after raising taxes, began the month with $3.8 billion worth of unpaid bills left over from last year. Connecticut sent layoff warnings last week to state troopers. The governors who gathered here over the weekend for the summer meeting of the National Governors Association have all been scathed by the unpopular things they have had to do to keep their budgets in balance. For the veterans, it was just the latest in a series of tough years. For the rookies 29 new governors took office this year it was their first taste of state budget battle.

Its funny, here I am, Im six months into it and I dont think of myself as a new governor anymore, said Gov. Dannel P. Malloy of Connecticut, a Democrat who took office this year and closed a gaping deficit with a blend of tax increases, service cuts and union concessions. Since the unions have failed to ratify the agreement he made with their leaders, he now faces the prospect of having to lay off more than 5,000 state workers. Its been that kind of six months, he said. Now, more than a dozen governors of both parties said in interviews here, states are going to have to adjust to what some are calling the new normal: the strong likelihood that they will be asked to make do with less federal aid. It is not just the end of the stimulus money, which has helped keep many states afloat but is now mostly gone. Governors are closely watching from their statehouses as the debate in Washington increasingly centers on what further cuts to make. Its like falling off a cliff, said Gov. Christine Gregoire of Washington, a Democrat. And were going to be at the bottom of that cliff for a long time in our relationship with the federal government. And whatever theyre going to decide in the way of cuts, I hope they understand the implications to the states and what its going to mean on the ground out here. Gov. Terry E. Branstad of Iowa, a Republican, said, I think weve got to recognize that the federal government is never going to be able to deliver what they promised. The uncertainty over federal cuts both Democrats and Republicans in Washington have called for cutting $100 billion from Medicaid over the next decade is clouding the outlook for states even as their tax collections are slowly climbing back toward their pre-recession levels. There was a partisan divide here over how to react to the expected new austerity. Democrats, for the most part, called for the federal government to balance cuts with taxes, so services could be preserved. Republicans, on the other hand, opposed higher taxes, and said that they would be able to manage with less federal money as long as the federal government also gave them the flexibility to spend less money on required programs. Some Republicans including Gov. Gary R. Herbert of Utah, who surprised his guest governors when a stunt double posing as him did a ski jump say they support amending the Constitution to require the federal government to balance its budget. That would almost certainly result in a steep decline in aid to states. But Mr. Herbert said that he still worried about the potential impact of some federal cuts. In order to get our fiscal house in order, the federal government is going to have to do what they need to do, he said. And if theyre going to have us administer federal

programs, it helps if they dont balance their budget on our backs. That would not be fair, either. But everyone needs to tighten their belts. Many governors rattled off the cuts they had reluctantly made, or the taxes they had reluctantly raised, to keep their states going after a downturn that included the deepest and longest declines in state tax collections on record. Ms. Gregoire lamented that she had put a big hole into her safety net by ending a program that sent checks to unemployable adults. These are folks who, without anything, will probably go homeless on the streets, she said. Cutting access to Medicaid was a tough decision, said Gov. Jan Brewer of Arizona, a Republican. The state had expanded access in flusher times, but now, after selling off state office buildings, winning passage of a temporary sales tax increase to help finance education and making cuts elsewhere, she said that there were few options open to her. That was, of course, very, very difficult, but we had no other choice but to address that issue, Ms. Brewer said of the Medicaid cuts, which are being challenged in court. We were kind of caught in a situation where, although people felt it was a good thing that we were able to do that, we werent financially able to continue that. So we had to go in and remove it. For Gov. Martin OMalley of Maryland, a Democrat, one of the hardest cuts he made was closing a mental health center on the states Eastern Shore that he said had helped many vulnerable people. Not easy, he said. I still remember one of the letters I was given by a guy who went through that center. It said we all face a fundamental choice in life. We can either be bitter about what weve lost, or focused on what we have.

AP: Governors talk education during gathering in Utah

By JOSH LOFTIN Associated Press SALT LAKE CITY Funding higher education aimed at meeting the needs of a more demanding and global marketplace will be a key focus of the National Governors Association meeting this week in Utah, Washington state Gov. Chris Gregoire said Friday. Gregoire said that as more jobs demand degrees beyond high school diplomas, it is imperative that states invest more in higher education and trade schools.

"Our work force is not prepared to meet the demands of the future," she said. Governors from across the country are gathered in Salt Lake City through Sunday for the conference that will focus on improving education and boosting international trade, among other things. The state leaders attended a forum Friday to discuss how to invest in higher education. They also listened later in the afternoon as governors from Chinese provinces explained the trade opportunities available in the country. Creating ties with China can prove valuable for states, especially in areas such as alternative energy development. Iowa Gov. Terry Branstad said his state has benefited greatly from partnerships with Chinese companies to develop hybrid biofuels made from corn and soybeans. "It's made a big difference to farmers in our state," Branstad said. Governors attending the meeting said a key goal will be to share ideas in a nonpartisan way to find common solutions. "We focus on issues concerning all states," Nebraska Gov. Dave Heineman said. He said governors also stand united in wanting the federal government to recognize the impacts of budget cuts to the states but, more importantly, they simply want congressional leaders to reach agreement on the national debt debate currently consuming Washington. "We need the president and Congress to sit down and resolve this issue," Heineman said. "America cannot default on its sovereign debt." Utah Gov. Gary Herbert said partisan politics must be removed from the debate if agreement is to be achieved. Governors understand "that the party label only gets in the way," Herbert said.

AP: Governors reflect partisan divide in debt debate

SALT LAKE CITY -- Governors nationwide are nervously watching the debt-ceiling debate in Washington, fearing that a partisan impasse could rattle financial markets and slow the economic recoveries they desperately want for their states. Yet many of them are sticking to the same partisan loyalties and talking points that are making it so difficult for President Barack Obama and Republican lawmakers to find a

way to avoid a borrowing cutoff, which could force the government to default on some of its bills. In fact, some of the harshest rhetoric was heard this weekend in Salt Lake City, where the National Governors Association is holding its annual meeting. At stake is "the full faith and credit of the United States of America, and we have Republican members of Congress that say 'Faith and credit, baloney. We don't care about that,"' said Montana Gov. Brian Schweitzer, a Democrat. He called those lawmakers "the same yahoos who didn't pay for two wars," a reference to the Afghanistan and Iraq invasions, which President George W. Bush launched while cutting taxes. Maryland Gov. Martin O'Malley, chairman of the Democratic Governors Association, said Republicans should be a moderating voice in the debt talks. He criticized House Majority Leader Eric Cantor and "the dinosaur wing of the Republican Party" for adamantly opposing tax increases on the wealthy, which Obama and demands as part of a deficit-reduction package. Republican governors defend their party's lawmakers. Iowa Gov. Terry Branstad laughed at the notion that "dinosaurs" are heading the GOP effort in Washington. "The dinosaurs are the ones that spent all the money," he said "This is the new energy." "I don't think Eric Cantor and Paul Ryan are out of touch," Branstad said. "I think they might be a little more bold than most politicians have historically been. But maybe the times call for that." Ryan, a Wisconsin Republican, chairs the House Budget Committee and authored a major spending plan passed this year by the House. Despite the rhetoric, governors in both parties agreed that failing to problem could gravely injure state economies. Noting that dozens of Chinese political and business officials are attending the governors' meeting here, Schweitzer said potential investors from Asia and Europe might steer away from Montana and other states if they feel the U.S. government is in fiscal disarray. "The amount of havoc that would be created in the financial markets would make Greece and Portugal and Ireland and Italy look miniscule," said Connecticut Gov. Dan Malloy, also a Democrat. Republican Gov. Scott Walker of Wisconsin said the impasse in Washington created uncertainty, which employers hate when deciding whether to expand their businesses.

But he said he was not surprised because Washington decisions are usually made based on what will win the next election. "What states are better at doing is courage," Walker said. "It's having the courage to make decisions that some might view as more about the next generation than about the next election." But neither Walker nor other governors here found any fault with specific stands taken by their party in the debt showdown. Branstad strongly defended Cantor's opposition to new taxes, even if they were to hit only wealthy people. "This anti-wealth rhetoric actually hurts the economy," Branstad said, "because it makes these people afraid to invest for fear that whatever they make is going to get confiscated." "Those are the people you want to invest in great jobs," he said. Branstad, who notes that he has never lost an election in his long career, said Republicans credit much of their 2010 campaign success to a fiercely anti-tax stand. He said voters sent a message last fall: "The last time the Republicans had control of the Congress, they lost their way on spending. And you'd better not do that again." Mississippi Gov. Haley Barbour, who strongly considered a presidential bid this year, echoed those remarks, even as he left the door slightly ajar for a possible compromise. "I think a tax increase would be terrible," said Barbour, who once chaired the national Republican Party. But Republicans might have to grimace and accept a compromise, he said, if they can win deep spending cuts and cost-saving changes to Medicare and Social Security. "At the end of the day," Barbour said, "you have to look at the whole package." The governors here differ widely on how that package should be shaped. But to a person, they say they desperately want an end to the debt brinkmanship in Washington.

Salt Lake Tribune: Governors in Salt Lake City urge D.C. to solve the debt crisis now
BY ROBERT GEHRKE

The Salt Lake Tribune First published Jul 15 2011 11:16AM Updated Jul 16, 2011 12:01AM The showdown between the White House and Congress over raising the debt limit threatens the economic recovery and needs to end, governors gathered in Salt Lake City said Friday. "Out in the nation we can ill afford the debate thats going on in Washington, D.C.," said Washington Gov. Christine Gregoire, a Democrat. "The point Im making most importantly, and I think all governors agree, is get on with it." Nebraska Gov. Dave Heineman, a Republican, certainly agreed. He said the United States cannot default and governors are prepared to share in some of the cuts, if necessary, but a deal needs to be reached. "Drop some of this partisanship and do what is right for America," Heineman said. "Make a decision back there." Thirty-two of the nations governors are gathering in Salt Lake City this weekend for the National Governors Associations annual summer meeting, and the rocky negotiations over the debt ceiling were the leading topic during a news conference on the opening day. The White House says Congress has until Aug. 2 to raise the nations debt limit which now stands at $14.3 trillion or the United States will default on its obligations. President Barack Obama warned in a news conference Friday that "we are obviously running out of time." Utah Gov. Gary Herbert, a Republican, took a somewhat different tack. He argues Washington needs some incentive to control runaway spending and that forecasts of dire consequences if the debt ceiling is not raised are merely "crystal-ball gazing." "I do know this: We need to bring some fiscal restraint to our spending in government. We cannot be this nanny state where we do everything for everyone from cradle to grave," Herbert said. "We have developed an entitlement society we need to get away from." Herbert is one of five governors who has signed a "Cut, Cap and Balance" pledge, which insists that, before officials boost the debt ceiling, they should make significant cuts, cap future spending and pass a balanced-budget amendment. "I do not believe its an impediment. I believe it is a catalyst," Herbert said. "I signed it because I believe that is a good approach to solve the fiscal irresponsibility in Washington."

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The White House has argued for closing tax loopholes and other ways to raise revenue, which Republicans are resisting. Gregoire, chairwoman of the governors association, said states should be consulted because 33 cents of every nondiscretionary dollar sliced falls to the states, but cuts need to occur. "If not done right and Im not exaggerating here because of how fragile the recovery is in some of our states, it can trigger them to slide back again," she said. "Having said that, theres not a governor that doesnt understand that cuts have to be made. Were willing to work, were willing to help. But we cannot belabor this issue. Its hurting the economic recovery." gehrke@sltrib.com

Wash Post: For governors, a personal toll from budget battles

By Dan Balz, Published: July 16 SALT LAKE CITY In one state capital after another, this has been a year of painful budgetary choices and, in some cases, pitched political battles. Thats the big picture. On an individual level, it also has been a time of reflection, disappointment and lessons learned for the governors who have been in the forefront of those battles. Will Washington learn from the states? Talk to state executives gathered here at the summer meeting of the National Governors Association and it quickly becomes clear that the budget fights this year have not just left political scars, but some personal ones as well. As Washington Gov. Christine Gregoire (D) put it, Ive just come through a session in which I made rotten decisions. In Gregoires view, those decisions werent bad because they failed to solve the states budgetary problems or left her budget hopelessly out of balance. To the contrary, Gregoire oversaw cuts of more than $4 billion that balanced her biennial budget. Instead, her decisions were personally disappointing because they went against the grain of Gregoires political philosophy. By her own account, those cuts will hurt the very people she got into politics to help. She believes she spent this year undoing much of what she had tried to do in her earlier years in office. Ive always believed state government was the ultimate safety net, and it isnt anymore, she said. Not in my state. Im now out there with the faith community and the nonprofits and so on, saying, you have to pick up. We are eliminating checks for certain segments of our population that today get a check. On Oct. 1 they will get nothing.

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Like many governors, Gregoire cut pay for state workers, reformed the state pension system, asked state employees to pay more for health care and retirement, eliminated cost-of-living increases for some retired state employees and revamped the states worker compensation system. She cut education spending and raised college tuition. Can they afford the tuition increases that were doing? she asks rhetorically. Probably not. Given the nations need to compete more effectively in the global economy, Gregoire said her state and others should be putting more money into higher education. Instead she did the opposite there and in many other areas. Those were the cards she was dealt, she said. Gregoire made these decisions without some of the rancor seen in some other states. She personally oversaw the negotiations and said she tried to deal with the unions with respect. At one point, thousands of demonstrators showed up to protest, but they were orderly and not disruptive. It was the most perfect example of freedom of speech Ive seen, he said. I was exhilarated by that. Gregoire believes that this represents the new normal for states for the foreseeable future. She believes there will be no imminent return to the flush days of the past. Even when the economy begins to grow again, states will have to live with less and do less. Thats why she said she was signing her budget with a heavy heart. Wisconsin Gov. Scott Walkers (R) conclusions about the budget fight that prompted outrage in his state and drew national attention are no less personal than Gregoires, but far different in how he assesses what was done. Walker turned Wisconsin into ground zero nationally over the issue of public employee compensation and the power of public employee unions. Republican and Democratic governors have extracted concessions from unions to help balance their budgets. More than any other governor, however, Walker provoked a confrontation that could continue to roil Wisconsin through next years election. His proposal to eliminate collective bargaining for most state employees brought thousands of demonstrators to Madison daily during the heat of the battle, prompted a walkout of Democratic senators and inflamed passions among citizens. After a long legislative struggle and court challenges, Walkers initiatives have gone into effect. As he looks back, the new governor does not think he made bad policy decisions. Over time, Wisconsin will be better off as a result, he argues. But he acknowledges that he made several miscalculations that have cost him dearly in terms of his political standing and in the states ability to do its business harmoniously.

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Given the opportunity to start over, Walker said, he would not back away from confronting public employee unions over pay and compensation and bargaining rights. But he wishes he had laid the foundation for his proposed changes more effectively. He also wishes he had more accurately anticipated the backlash that they would set off in the state and across the country, and says he would have had a political plan to deal with the opposition. Walker said he came into office with the mindset of both a county executive and a smallbusiness owner. Identify a problem. Identify a solution. And you just do it, he said. He set a fast pace in January with the legislature, without preparing the public. That might have worked in other settings, but it backfired on the new governor. We didnt do enough of a job of making the case for what we were doing and why it was needed, he said. Walker anticipated an intense but short battle. He admits he underestimated the powerful reaction, particularly outside of his state. Where I was really shocked [was] not so much the publics reaction [in Wisconsin] as much as it was the national reaction, he said. He continues to pay the price. Wisconsin remains in political turmoil. Recall elections are pending for nine state senators, six Republicans and three Democrats. Republicans could lose their Senate majority as a result. The governor could face a recall next year. Lawmakers, the political parties and their coalitions are now consumed with elections and recriminations, rather than being able to concentrate on finding ways to create jobs and fix the economy the major promises of Walkers campaign. Its tough, Walker said about the GOPs prospects for holding onto the Senate. He argued that the more Wisconsin citizens learn about the effects of the changes in his budget, particularly in education, the more they will see them positively. If the election were January 9th rather than August 9th, Id feel a lot better, he said. Gregoire, serving as this years NGA chairman, has decided not to seek reelection in 2012. She says that her state will be better off over the next year if she is not in the middle of a campaign. Walker will govern in a polarized environment for a long time. He will have to try to regroup from his difficult start. The other lesson from the states is obvious. As President Obama and lawmakers in both parties try to resolve their dispute over the budget and the debt ceiling, the experiences of these two governors and many others stand as a reminder that there will be nothing cost-free about their solution, whatever it turns out to be.

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Wall St. Journal: Governors Demand Quick Debt Agreement

SALT LAKE CITY The nations governors demanded a quick resolution to the debt wrangling in Washington Friday that would not throw the problem onto the states, but there was little agreement on how to resolve the impasse. Opening the summer meeting of the National Governors Association here, NGA Chairwoman and Washington state Gov. Christine Gregoire (D) declared, We can ill afford the debate going on in Washington, D.C. Were in a fragile state of recovery and the fact that we are not moving forward to solve the debt issue is resulting in further economic uncertainty. She warned that any solution that shifts too much costs onto the states, especially in the Medicaid health program for the poor, could push many states back into recession. Drop some of this partisanship, and lets get this done, said Nebraska Gov. Dave Heineman (R), the NGAs vice chairman. America cannot default on its obligations. But agreement broke down from there. Republican governors said they supported passage of a balanced budget amendment and opposed new tax hikes. Democratic governors said they wanted President Barack Obamas balanced approach, which included cuts and revenue-raisers. And they did not think a balanced-budget amendment was necessary. This is not the time to be having that discussion, said Maryland Gov. Martin OMalley (D). Some big things we can only do together, like national defense and recovering from recession. Thats why we have a federal government. Rhode Island Gov. Lincoln Chafee, a former liberal Republican senator who is now an independent, broke with both sides. He said the Republican Party had turned surpluses into deficits last decade with a tax cutting program that coincided with wars in Iraq and Afghanistan, a new prescription drug benefit that was unpaid for, a new Homeland Security Department whose costs were not offset with other cuts, and an earmark binge. I say to the Republicans, my former party, you created this economic disaster. Youve got to be for helping to fix it, he said. And right now theyre not. To Democrats, Mr. Chafee said a balanced budget amendment would have tempered the GOP and should be considered. He is not convinced federal aid to states like his has been a help, especially in light of the federal deficit. I would side with, dont drive up the deficits, he said. Let us fight our way out of it without the stimulus.

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Reuters: Governors urge US debt deal to avoid 'embarrassment'

Sat, Jul 16 2011 By Edith Honan SALT LAKE CITY, July 16 (Reuters) - State governors meeting in Utah on Saturday urged a speedy resolution to the deadlock in Washington over lifting the U.S. debt ceiling to avoid what they called an embarrassing default on U.S. obligations. "This is a dangerous and equally ridiculous situation that's playing itself out. It takes one sentence to solve this problem -- and that's to lift the debt ceiling," Connecticut Governor Dannel Malloy, a Democrat, told Reuters at a National Governors Association meeting in Salt Lake City. Malloy predicted political leaders in Washington would ultimately reach an agreement to avoid a default. State governors are closely watching developments in Washington, where President Barack Obama and his fellow Democrats are in a standoff with congressional Republicans in talks intended to reach a deal to lift the debt ceiling. [ID:nN1E76E1MN] The governors are concerned over the impact of the debt situation in Washington in part because it could have an impact on their own individual states' credit ratings. The U.S. Congress must raise the $14.3 trillion limit on U.S. borrowing by Aug. 2 or the federal government will run out of money to pay its bills, causing turmoil in global financial markets and potentially forcing the United States into another recession. Republicans in Washington are demanding deep government spending cuts as part of a deal to raise the debt limit while Obama and the Democrats want tax increases on the wealthy also to be part of the agreement. Republicans oppose tax increases. "I really think we need more statesmen and less politicians in Washington right now because it is a situation that must be solved. And I honestly believe it will be. Everyone's posturing -- both sides," Alabama Governor Robert Bentley, a Republican, said in an interview. 'AN EMBARRASSMENT' Virginia Governor Bob McDonnell, a Republican, added, "It would be an embarrassment for the United States of America to default on its obligations."

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"At the same time, there's got to be a recognition that Congress and the presidents have over-spent and over-promised now for 30 or 40 years. And the bills are due," McDonnell told Reuters. Rhode Island Governor Lincoln Chafee, a former Republican who is now an independent, said, "We went on a tax-cutting rampage and a spending spree. And the math just does not add up. We're a crippled economy as a result." The impasse in Washington, which could lead to missed debt payments, has prompted rating agencies to say the nation's coveted AAA rating could be in jeopardy. This week, Moody's placed more than 7,000 ratings affecting about $130 billion in municipal debt on review for a possible downgrade due to a close connection with the U.S. government. "This is big stuff that somebody is playing with, and the fact that it's become a partisan battle ... it's not what's good for America," said North Carolina Governor Bev Perdue, a Democrat. Perdue said on Friday her state finance director was notified by Moody's that it would review the state's AAA rating. Perdue expressed confidence North Carolina would hold on to the top rating. A Moody's spokesman said the rating agency was "looking at the AAA rated states and will announce any rating actions over the next week for states." (Editing by Will Dunham and Todd Eastham)

Politico: Governors gag over D.C. dysfunction

By: Alexander Burns July 17, 2011 07:18 AM EDT

SALT LAKE CITY In the eyes of Americas governors, Washington D.C. has hit a new low. State executives have long vented about the shortcomings of the Beltway mindset, carping that the federal government is too partisan, too fiscally irresponsible and out of touch with the citizens back home. Now, those complaints have evolved into deep frustration, verging on contempt, thanks to a stalled debate over the federal debt ceiling that caps off months of partisan dysfunction in Congress.

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At the National Governors Association meeting here in Salt Lake City, governors in both parties expressed disbelief over a national government that has failed to match in even modest fashion the explosion of policy action this year in the states. The contrast between what the 50 governors are doing, putting aside partisan politics as much as they can to try to get results, and what is happening in Washington, has probably never been more stark in our national history, said Vermont Gov. Peter Shumlin, a Democrat. Whether its the Vermont approach, or the New Jersey, Wisconsin or Florida approach, were getting results, he said, making a point to list states with Republican governors. I dont agree with some of the things theyre getting done in the states I just mentioned, but theyre trying to solve real problems. The achievement gap this year between Washington and the states is astonishing, and crosses party lines. Shumlin, elected in 2010, has already racked up a historic legislative accomplishment: He signed a bill putting Vermont on track to become the only state with a single-payer health care system. A long list of governors in both parties have recorded sweeping victories of their own in 2011. Wisconsin Gov. Scott Walker and Ohio Gov. John Kasich, both Republicans, have overhauled laws governing public-sector labor. A group of GOP governors including Indiana Gov. Mitch Daniels, Oklahoma Gov. Mary Fallin, Tennessee Gov. Bill Haslam and New Mexico Gov. Susana Martinez have signed education laws that reform teacher tenure and school performance assessments. Some of the most striking achievements have come from executives who have had to work with partisan rivals in their state legislatures: New York Gov. Andrew Cuomo negotiated with a Republican state Senate to legalize same-sex marriage and pass the Empire States first on-time budget in decades. Across the Hudson River, New Jersey Gov. Chris Christie reformed the state pension system by working with a Democratic state House and Senate. By comparison, Washington has spent most of the year locked in trench warfare, marked by confrontations over funding the federal government and raising the debt limit. While governors gave different explanations for D.C. gridlock some with distinctly partisan tinges they all agree that the result is something approaching a national disgrace. The atmosphere in Washington just seems incredibly toxic. Its typically, We win, you lose, said Virginia GOP Gov. Bob McDonnell, who has largely

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succeeded in passing his agenda through a Democratic state Senate. Weve found a way, on big stuff, to work together. The debt limit fight hits close to home for governors, regardless of party. To a man and woman, they describe the potential damage to their states in grave terms, citing the consequences for lending, state bond ratings and overall consumer confidence. The fact that the federal government is paralyzed to act on such an overwhelming political imperative encapsulates everything governors have always said is wrong with Washingtonoften to burnish their own reputations as problem-solversbut now raised to exceptionally menacing proportions. Missouri Gov. Jay Nixon expressed bafflement at the over-the-top theatrics of the debt ceiling debate: Nobody knows whats going to get cut or whats not going to get cut. People walk out of meetings and they say: One persons emotional, one persons upset. It looks like a soap opera. Im in a world in which I have a veto-proof Republican Senate and a very Republican House, said Nixon, who is a Democrat. We have not broken down in communication. Wyoming Gov. Matt Mead, a Republican elected last November, said he was frustrated that greater headway hasnt been made by the folks weve elected back there to make some real progress on this. This isnt something that just happened two weeks ago. Weve seen this coming for some time. This should be priority one to get this resolved. They shouldve been working on it for some time, Mead said. Governors want Congress to be able to sit down, work together with the president, to find a balanced approach to reducing our spending, said Fallin, the Oklahoma governor and a former Republican member of Congress who said Washington needs to get the issue behind us and move forward. Both McDonnell, who is vice chair of the Republican Governors Association, and Maryland Gov. Martin OMalley, who chairs the Democratic Governors Association, used the same word for the possible consequences of failing to cut a debt deal: catastrophic. OMalley said it wasnt just governors who had come to see Washington as a malignant force: To the vast majority of Americans, they see the debate as being confusing on its surface, partisan at its core and not contributing to job creation. In fact, threatening to harm it.

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I always put it this way: Theyre too focused on all the obstacles to no, instead of how you get to yes, said Nebraska Gov. Dave Heineman, a Republican whos the incoming chairman of the NGA. When I want to pass legislation and I want to create more jobs, Im focused on how do I get that done. I dont want to hear about all the obstacles. The governors dismay conveniently overlooks the reality that the politics-asbloodsport mentality is hardly limited to D.C. In part due to the rise of the RGA and DGA committees that can raise money in unlimited sums, and did so with unprecedented success in 2010 governors have new incentives to weigh in on federal politics in ways that attract attention and big-donor money. Those organizations both made their presence felt at the NGA: Democrats held a press conference on Thursday laced with colorful swipes at House Republicans and the tea party. RGA Chairman Rick Perry, the governor of Texas, penned an op-ed with South Carolina Gov. Nikki Haley recommending a hard-line approach on the debt ceiling that ran in the Washington Post on the eve of the NGA meeting. Neither Perry nor Haley attended the bipartisan gathering. And for all the gubernatorial scolding, there are a few states that stand out as partisan basket cases in their own right: California once again failed in 2011 to cut a deal to resolve systemic budget problems. Minnesotas Democratic governor and Republican legislative leaders just reached an unsatisfying conclusion to a two-week government shutdown. New Hampshire Gov. John Lynch, a Democrat, sparred throughout the spring with an overwhelmingly Republican legislature. The whole political situation is a more polarized, partisan, situation at both the federal and state level, said Iowa Gov. Terry Branstad, the nations most experienced governor, who returned to office this year after serving four terms in the 1980s and 90s. The difference, Branstad said, is that when it comes to issues like spending and debt, at least the states are trying to make progress. Were headed the way of Greece and Portugal and Spain and Italy, he said, arguing that in the states, theres been a real effort to make sure that theres significant, systemic reduction in the size of government We just dont see that kind of action at the federal level and it has to happen. Colorado Gov. John Hickenlooper, like a number of his colleagues, had praise for some specific federal initiatives. The federal government had been responsive to many of his needs as a governor, said the Democrat, but he recognized the limitations of the moment. Part of that is, we havent asked for a whole lot. We recognize that as bad as our

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budget is, the federal budget is just as bad. So putting our hand out and saying, we need more for Medicaid, we need more for education, its just not going to happen, Hickenlooper said. Im fairly fiscally conservative, so I temper my expectations.

Bloomberg: Governors Raising Petition Seeking Congressional Debt-Limit Deal

By Amanda J. Crawford and Tim Jones - Jul 17, 2011 U.S. governors from both major parties circulated a letter at their national meeting urging Congress to raise the federal debt ceiling rather than put the nations credit -- and their own states -- at risk. The bipartisan letter was being drafted by the National Governors Associations staff after Moodys Investors Service warned that state bond ratings would be damaged by a U.S. default, Maryland Governor Martin OMalley said yesterday. Im hoping that we may be able to provide some welcome relief to the debilitating partisanship that is threatening to drive our country into default for no good reason, said OMalley, the chairman of the Democratic Governors Association. President Barack Obama and Republicans in Congress are at an impasse over raising the legal debt ceiling. Unless it is lifted, the U.S. will reach the limit of its borrowing authority and begin to default on Aug. 2, according to the Treasury Department. They just started talking about it, Wisconsin Governor Scott Walker said in an interview when asked about the letter. I do believe they need to reach an agreement on the debt limit, Walker, a Republican, said of Obama and congressional leaders. Longer-term, they need to do in Washington what we have done in our state -- balance the budget. Walker said the letter was circulated by Washington Governor Christine Gregoire, a Democrat who is the chair of the governors, and by Nebraska Governor Dave Heineman, a Republican who is scheduled to succeed her as the organizations leader. Neither Gregoire or Heineman were available for immediate comment. Krista Zaharias, a spokeswoman for the NGA, said she wasnt able to confirm the letters existence. Jen Rae Hein, a spokeswoman for Heineman, declined to comment. Fairly Moderate

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Colorado Governor John Hickenlooper, a Democrat, said he was told that the letter was a fairly moderate document aimed at gaining bipartisan support. He said he hadnt seen it and couldnt say whether he would sign. Hickenlooper said he supports lifting the debt ceiling. The notion that you can walk up to the end of a precipice and ignore the risk you could lose your footing is foolhardy, he said of the impasse in Washington. Not lifting the debt limit would exacerbate every other fiscal issue we have, he said. Arizona Governor Jan Brewer, a Republican who is a frequent critic of the Obama administration, said partisanship should be set aside to avoid a U.S. default. Slash and Burn It is much easier to say, Just slash and burn, but you cant do that because it would turn our country upside down, Brewer said in an interview. It would be absolutely devastating. We have to take a position that is reasonable and productive in the long run to save this great country of ours. We have to do it. Matthew Benson, a spokesman for the governor, said Brewer hadnt seen the letter. Do your responsibility, get this done, settle the markets, get as long a deal as is politically palatable with the parties that are at the table and lets move on to ultimately more important issues, Missouri Governor Jay Nixon, a Democrat, said in an interview. Theyre going to get a deal, Nixon predicted. Rhode Island Governor Lincoln Chafee, an Independent, was less optimistic. I anticipate continued chilling of the economy as a result of inaction in Washington, Chafee said in an interview. Theres just such a lack of confidence in our political leadership in Washington, which is going to affect the national economy. Aaa Credit Rating Should the U.S. government lose its top Aaa credit rating following a default, at least 7,000 top-rated municipal credits would have their ratings cut, Moodys said in a report last week. Top-rated securities with no direct links to the national government would also be reviewed for similar action, the New York-based company said. An automatic downgrade affecting $130 billion in municipal debt directly linked to the U.S. would follow any reduction in the federal level, Moodys said. U.S. states are in a fragile state of recovery and can ill-afford the effects of a default, Gregoire said on July 15.

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Its time to put this issue behind us and get on with the issue confronting every American, which is, Do I have a job and will I have a job tomorrow, Gregoire said in a press conference. To contact the reporters on this story: Amanda Crawford in Salt Lake City at acrawford24@bloomberg.net; Timothy Jones in Salt Lake City at tjones58@bloomberg.net

Bloomberg: Minnesota Impasse, Wisconsin Recall Show States Mimic Washington

By Tim Jones and Amanda J. Crawford - Jul 18, 2011 12:01 AM ET Mon Jul 18 04:01:00 GMT 2011 July 18 (Bloomberg) -- Wisconsin Governor Scott Walker talks about his efforts to curb collective bargaining rights for most state government employees and the outlook for recall elections spawned from the dispute. Walker also discusses federal debt negotiations and the impact on the state. He speaks with Megan Hughes on Bloomberg Television's "InsideTrack." (Source: Bloomberg) Minnesotas government is in its third week of a shutdown. In Wisconsin, vacations have been interrupted by nine recall elections. California lawmakers approved a budget with only Democratic votes and Montanas Democratic governor vetoed 79 bills from the Republican- dominated Legislature. As Congress and the White House are again in showdown mode, deadlocked over a measure to raise the U.S. debt ceiling, state capitols are becoming more confrontational and adopting the partisan traits of political Washington, according to some governors at the National Governors Association conference in Salt Lake City that ended yesterday. The tensions complicated efforts to close combined 2012 deficits estimated by the Washington-based Center on Budget and Policy Priorities at $103 billion as states navigated the fourth consecutive year of budget-cutting. Its ironic that governors tend to demonize Washington even as they practice some of the same arts at home, Larry Jacobs, a political scientist at the University of Minnesota, said in a telephone interview yesterday. While some Democratic and Republican governors at the three-day meeting condemned the debt-limit gridlock in Washington, the effects of political polarization fester in several states.

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The Minnesota shutdown, which began July 1, was caused by a standoff between Democratic Governor Mark Dayton, who sought a tax increase, and the Republicancontrolled Legislature, which opposed it. The impasse halted state construction projects, closed parks and agencies and idled 23,000 employees. Dayton and legislative leaders plan a special session as early as today to approve a deal and end the shutdown, according to the Associated Press. Recall Elections An unprecedented number of recall elections, to remove elected officials from office, are slated in Wisconsin after Republican Governor Scott Walker and the Republican-led Legislature enacted curbs on collective bargaining for most state government employees. The economic downturn has forced almost every state to make deep spending cuts to balance its budget. Some, like Illinois, have raised taxes, although with no Republican votes. Recall efforts have begun in Michigan in protest of education cuts approved by the Republican Legislature and Republican Governor Rick Snyder. The Same Rhetoric I listen to some of the clips today about the rhetoric in Washington and I hear the same rhetoric in North Carolina, Democratic Governor Beverly Perdue said at a news conference July 14. Its almost a playbook about the next election. Perdue last month vetoed a $19.7 billion budget approved by the Republican-led Legislature that cut agencies and scaled back environmental controls, while letting a temporary one-cent sales tax expire along with some income taxes on high earners. Lawmakers overrode the veto on party lines. In California, Governor Jerry Brown sought to cover part of a $26 billion deficit by extending expiring taxes and fees. He needed the votes of four Republican lawmakers to put the issue to a statewide vote and began to woo the legislators in January. Talks went into June as Republicans used their power to block his tax plan to jockey for cuts to public pensions and to environmental and business regulations. Ultimately, Brown dropped the revenue effort and the state budget was passed only with the votes of Democrats. Intra-Party Disputes Not all the conflicts are partisan. Arizona Governor Jan Brewer, a Republican, called a special session of the Legislature, which is controlled by members of her own party, to change state law allowing extended unemployment benefits paid by the federal government. Lawmakers refused on philosophical grounds, immediately stopping assistance to 15,000 people and costing the economy almost $3.5 million a week.

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Theres a time to stand your ground, Oklahoma Governor Mary Fallin, a Republican, said in an interview, but I also think you should find common ground. I dont think its helpful when you have standoffs and shutdowns of the government, whether its at the state level or the federal level, because were dealing with issues that affect the American people, said Fallin, a former representative in Congress. Determining where and when to take that stand is the challenge. Most states, including New York, approved budgets without disruption. Still, the level of conflict has escalated around the country, said Missouri Governor Jay Nixon, a Democrat. The battles have become fight-to-the-finish struggles. Lack of Civility Were all concerned with the lack of civility, Nixon said in an interview. We all know that our states and our country are more complex than what a donkey or an elephant might say on a particular issue, he said, referring to the symbols for the major political parties. The current political climate has sharpened partisan divisions on taxes and spending and discouraged bipartisanship, Nixon said. Its not a sign of strength to join with others and make incremental gains, Nixon said. Jacobs, the Minnesota professor, said partisanship at the state level has grown because many moderates in both political parties have been chased out and bipartisan consensus is discouraged. Its the same story were seeing in Washington, and its playing out in all these states, Jacobs said. Wisconsins War Wisconsin is at political war. Both parties and their traditional support groups have pledged to spend millions of dollars on the August recall elections because control of the state Senate is at stake. Walker, whose approval rating dropped to 37 percent in a University of Wisconsin Badger Poll released July 13, faces the prospect of a separate recall next year. In the end, what calms things down is results, Walker said in an interview, adding he believes the changes he pushed in Wisconsin will be accepted by taxpayers. Rhode Island Governor Lincoln Chafee, an independent who was previously a Republican U.S. senator, said he expects divisions at the state level to get worse.

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In fact, governors at their national meeting decided not to issue what was to be a bipartisan letter urging Congress and the White House to settle their differences on the debt ceiling. Everybody agreed, absolutely bipartisan, Republicans and Democrats that the debt ceiling needs to be raised, said Washington Governor Christine Gregoire, a Democrat who chaired the governors meeting. The letter didnt materialize, she said, because the governors needed time to reach consensus on a larger plan for taxes and spending cuts, and felt their message had already gotten out through the media. I think the point is every governor that I know of thinks it is important to raise the debt ceiling, said Mississippi Governor Haley Barbour, former chairman of the Republican National Committee. But there are very significant differences among governors on how to get there, he said. To contact the reporters on this story: Timothy Jones in Salt Lake City at tjones58@bloomberg.net; Amanda J. Crawford in Salt Lake City at acrawford24@bloomberg.net To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

CNN: GOP governors looking to their own as 2012 race takes shape
By: CNN Political Reporter Peter Hamby Salt Lake City, Utah (CNN) - Republican governors are searching within their own ranks for a presidential candidate to get behind, a scenario that might present an obstacle for Minnesota Rep. Michele Bachmann's as she continues her surge in the polls. In the wake of big statehouse gains in 2010, Republicans wield control over political and financial networks in several key battleground and primary states. Now they are planning to exercise that newfound influence as the party begins the process of choosing its nominee. At last weekend's National Governors Association annual meeting in Utah, GOP governors met privately in hotel rooms and hallways to strategize about the 2012 race. While there are no plans to unite behind a single Republican, governors interviewed by CNN repeatedly said they are choosing between the candidates who have experience

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running a state, namely former Massachusetts Gov. Mitt Romney, former Minnesota Gov. Tim Pawlenty and former Utah Gov. Jon Huntsman. "Of course when we get governors together we talk about 2012," said Virginia Gov. Bob McDonnell. "There is a general thought that a current or former governor will make the best candidate for the Republican Party." The prospect of a bid by Texas Gov. Rick Perry, which looks more realistic every day, has also piqued the interest of some GOP executives who admire his jobs record and potential to bridge the divide between establishment Republicans and grassroots elements of the party. McDonnell reserved special praise for Perry, calling him "the kind of guy that can win" the nomination because of his broad appeal to tea party activists, social conservatives and business-types. Wisconsin Gov. Scott Walker said his fellow Republicans "are talking a little bit here and there" about the race and concluding that a nominee with gubernatorial experience has the best opportunity to topple President Barack Obama. "The fact that there is a number of competent quality candidates who are either current or former governors is a positive," he said. Along with New Jersey Gov. Chris Christie, Ohio Gov. John Kasich and South Carolina Gov. Nikki Haley, Walker is one of a new generation of governors who have charmed Republican activists with their unapologetic approach to budget cutting. Their combative methods have weakened their standing politically in some cases 59 percent of Wisconsin voters disapprove of Walker's performance, for instance - but the presidential candidates continue to seek their endorsements in hopes of currying favor with Republican primary voters. Others potential endorsers, like Mississippi Gov. Haley Barbour and Iowa Gov. Terry Branstad, are political veterans who would lend an air of establishment credibility to a campaign, not to mention connections to networks of Republican donors. Still, of the nation's 29 Republican governors, just three have picked a horse in the 2012 race so far. Idaho's Butch Otter and Nebraska's Dave Heineman are supporting Romney, the Republican frontrunner, while Georgia's Nathan Deal has endorsed former House Speaker Newt Gingrich. But that gubernatorial pick-up for Gingrich is likely to be an outlier.

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Barbour, the former Republican Governors Association chairman who helped elect several of his younger colleagues, said governors are better equipped than legislators to step into the Oval Office. He cited Ronald Reagan and Bill Clinton as successful examples. "Being governor is a far cry from being president, don't get me wrong, but it's more like being president than any other job," Barbour told CNN. And what about a three-term congresswoman from Minnesota? "I am not for or against anybody," Barbour said. McDonnell was similarly half-hearted about Bachmann. "I am inclined to support a governor," he said. "That's not anything about Michele Bachmann or Newt Gingrich who are fine legislators. But the skill set that's going to make the next great Republican president comes from the governor ranks." That kind of lukewarm praise seems to rule out the possibility that Bachmann will win any substantial support from the gubernatorial wing of the party. That may be just fine with Bachmann, whose outsider brand and grassroots appeal have propelled her to an early lead in Iowa, which holds the first contest of the Republican nomination fight. But if she wants to move her insurgent candidacy beyond the early states, Bachmann must at some point overcome questions about her viability from the establishment side of the party. New Hampshire GOP strategist Mike Dennehy recalled the challenge of working for Sen. John McCain's upstart primary bid in 2000 against then-Texas Gov. George W. Bush, who ultimately overpowered McCain with the full force of the Republican establishment at his back. "If the 2012 nominating contest comes down to a governor and a member of Congress, or other outsider, that governor will have a phenomenal advantage in money and establishment support," Dennehy said. The three-day NGA meeting was, officially, a nonpartisan event with an agenda of policy-driven plenary sessions focusing on topics like education and homeland security. But 2012 politics was an unavoidable topic for the governors who roamed the hallways of the Grand American hotel in Salt Lake City. Even before the session began, the Democratic Governors Association organized a press conference to attack their Republican counterparts for not speaking out more forcefully

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against members of their own party in Washington who are balking on raising the federal debt ceiling. Perry's presidential maneuvering was also beginning to have a ripple effect. McDonnell, the RGA vice chairman, said he has started discussions with fellow Republican governors about taking over the RGA if Perry, the current chairman, steps down to run for president. Meanwhile, Branstad, who has assumed the role of his state's chief political prognosticator, happily handicapped the Republican race for reporters who asked him about Perry's chances in Iowa. Branstad was the only Republican at the meeting to bring up the possibility of a bid by former Alaska Gov. Sarah Palin, who served just a year and a half in Juneau before resigning in 2009. The Iowa governor also demanded a meeting with Huntsman, who spent the weekend in Salt Lake City for a series of fundraisers and campaign stops. Huntsman is not planning to compete in Iowa, frustrating GOP leaders in the caucus state. The two men sat down in a hotel suite reserved by Huntsman's campaign and had a frank discussion about campaign strategy. "He spoke his mind, I spoke my mind," Huntsman said after the confab. Huntsman made his case to seven different Republican governors over the weekend as he tries to build support for his campaign, which is still in its early stages. Along with Branstad, Huntsman arranged private meetings with Barbour, Christie, Walker, Tennessee Gov. Bill Haslam and Utah Gov. Gary Herbert. Yet even as the GOP presidential field finally begins to take shape, the party continues to face nagging questions about the strength of its candidates. McDonnell said it's time for Republicans to stop looking elsewhere and begin evaluating the current group of presidential hopefuls. There will be no perfect candidate, he said. "Maybe we are waiting for Superman," he joked.

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Star-Ledger: Gov. Christie unusually quiet at National Governors Association conference in Salt Lake City
Published: Saturday, July 16, 2011, 6:00 AM 2011, 10:30 AM
By Ginger Gibson/Statehouse Bureau SALT LAKE CITY He participated in a landmark forum between American and Chinese governors. He attended three meetings at the National Governors Association annual summer conference. But Gov. Chris Christie, usually a talkative political rock star at events that draw national attention, was uncharacteristically quiet Friday. He provided no input during panel discussions. He refused to take questions from the national media, brushing past reporters and saying: "No, Im not taking any press today, thanks." It was Christies first public appearance since he held a Trenton news conference to announce hed cut $900 million from the state budget through line-item vetoes and then left for a two-week family vacation. While he was away, Democrats tried unsuccessfully to override most of his vetoes and his one-time ally, Senate President Stephen Sweeney (D-Gloucester), delivered an angry and profane tirade blasting the governor and his reductions. While the governors spokespeople have responded to what happened in New Jersey while he was away, Christie has not. He still hasnt. Friday, Christie wouldnt take questions, including some on the nations debt limit or about his discussions with American or Chinese governors. "Ill tell the people of New Jersey when I get back to New Jersey," he said. Christie is scheduled return to the state on Monday. The Republican governor arrived at the conference Thursday along with First Lady Mary Pat and their four children. The family attended a screening of the newest "Harry Potter" movie that was arranged for governors attending the conference. The stop in Utah was third leg of his out-of-state trip. He went to Idaho on July 5, where he spoke at a conference of media executives. He then spent two weeks at an "undisclosed location" with him family before arriving in Utah. Washington Gov. Chris Gregoire, who is chair of the National Governors Association, said this weekends meeting will focus on allowing governors to share ideas about improving their states.

Updated: Saturday, July 16,

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"We have not yet recovered in full and we still have to make some very tough choices when investing in our futures," Gregoire, a Democrat, said. The conference also allowed an opportunity for governors to discuss issues being debated in Washington, D.C., including talks over raising the nations debt limit. Gregoire said that for every dollar the federal government cuts in spending, about one-third of it affects the local governments. "We can ill afford the debate that is going on in Washington, D.C.," she said. "We are in a fragile state of recovery." NGA Vice Chair Nebraska Gov. Dave Heineman said residents are prepared to adjust to cuts in spending, adding that farmers in Nebraska are open to cuts in agriculture subsidies if theyre done fairly. "We need the president to lead," Heineman, a Republican, said. "America can not default on its obligations." This years National Governors Association meeting included a group of four Chinese provincial governors. "We have the common aspiration that we can use this opportunity to work together for the common goal of progress," said Zhejiang provincial Party secretary Zhao Hongzhu through a translator. "Its about enhancing mutual understanding and friendship between our two peoples and promoting dialogue between cultures."

Star-Ledger: Gov. Chris Christie recounts tale of N.J. pension overhaul during closed-door meeting at National Governors Association
Published: Monday, July 18, 2011, 6:00 AM 2011, 2:26 PM
By Ginger Gibson/Statehouse Bureau SALT LAKE CITY At the end of a private lunch on Friday, Gov. Chris Christie took the opportunity of having about two dozen governors in one room to recount the story of New Jerseys fight to overhaul pension and health benefits. He had not piped up once during the public sessions of the National Governors Association meetings over the weekend. But in a closed-door meeting in a ballroom at 30

Updated: Monday, July 18,

the Grand America Hotel, other governors say Christies story stretched for more than 15 minutes, with each detail recounted. He told it with zeal and enthusiasm, said Maryland Gov. Martin OMalley, a Democrat who has verbally sparred with Christie more than once. None were more interested than he was. After all, Christie made the national media circuit after New Jersey passed the landmark overhaul of pension and health benefits last month. He touted the changes which make employees pay more for pensions and health insurance, raise the retirement age and eliminate cost of living increases in pension payments for retirees as groundbreaking reform and a model for the rest of the nation. But as the nations governors gathered in Salt Lake City, the topic of pension reform got virtually no air time. Most governors have already been through that fight. In the past two years, 39 states have made significant changes to the employee retirement benefits with 21 doing so last year, according to the National Conference of State Legislatures, which tracks legislation trends. Four other states have legislation pending. We did not follow any other states guide because we were doing it at the same time as other states, said Alabama Gov. Robert Bentley, a Republican. Its something we had to do as part of the budget balancing initiative. His state increased contributions for public employees this year, one of 15 states that will this year. Another 11 states upped contributions last year. While many states are undertaking benefit overhauls, none received as much attention as New Jersey and Wisconsin, where Republican Gov. Scott Walker coupled the overhaul with the elimination of collective bargaining. Walker said he believes he and Christie got more attention for their changes because they were taking the biggest strides. Walker said he talked with Christie during the pension fight about what was being done in each state. We didnt seek out the media, Walker said. Because we were so bold politically, although modest I think in terms of what the average middle class taxpayer pays, but bold politically and how we went forward doing it, that tended to make this into a national issue. Washington Gov. Chris Gregoire, a Democrat who heads the National Governors Association, believes few paid attention to other states overhauling benefits because they did it without controversy. Most, she said, were completed quietly with little protest and lawmakers signing off without much of a fight.

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Having already restructured the state pension system, this year Gregoire also proposed eliminating cost of living adjustments, the increase employees get to account for inflation. Washington was one of 17 states, including New Jersey, to reduce or eliminate COLAs this past two years, according to the NCSL. Last year, Gregoire and the Democrat-controlled Legislature also passed legislation to force state employees to pay 25 percent more for their health insurance. Were stepping up to it, she said of the nations governors. The media only covers those things that dont work, those things where tens of thousands of people who show up to protest. Unlike Christie, a Republican who must contend with a Democrat-dominated Legislature, Democrats such as Gregoire, OMalley and Vermont Gov. Peter Shumlin made changes with legislatures controlled by their party. Christie declined to speak to reporters during the weekend conference. His spokesman, Kevin Roberts, continued to say Sunday that New Jersey was an exemplary in handling pension reform. He said by working with the Democratic Legislature, the governor set an example of bipartisan cooperation. No doubt, New Jersey is a model for other states to follow, both in substance and process, Roberts said. Christies office estimates New Jerseys reforms will save $120 billion over 30 years. In the first year, the state government savings estimate is $10 million for health care insurance changes. Mississippi Gov. Haley Barbour, a Republican with a Legislature that has one chamber controlled by Democrats, said his states pension fund continues to be underfunded but theyre making improvements. States are looking at their own situations instead of other governors for guidance, he said, but he sees Christie as someone who is making strides. From what I have seen that he has done, he has been very successful, Barbour said. OMalley, who is chairman of the Democratic Governors Association, said many governors arent getting credit for undertaking initiatives identical to Christies because of his union bashing, teacher belittling style, noting the Republican governors sparring with the powerful New Jersey Education Association teachers union. An early mover on pension overhauls, Vermonts Shumlin said his state was able to get teachers to sign off on several changes last year, including increasing the retirement age, by having the unions participate in negotiations. This year, 14 states, including New Jersey, increased the retirement age for public employees, most to 65, according to NCSL.

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Shumlin said Vermont estimates a $25 million a year savings from changes to the teachers pensions alone. Vermont workers also agreed to a 3 percent pay cut, he said. You get more with maple syrup than vinegar, Shumlin said. There was no blood. There were no tears. There was shared sacrifice.

Gov. OMalley
AP: Dem gov: To win in 2012, GOP wants to hurt economy
By CHARLES BABINGTON, Associated Press 2 days ago SALT LAKE CITY (AP) The head of the Democratic Governors Association accused GOP debt negotiators in Washington of trying to undermine the economy so President Barack Obama will lose his re-election bid next year. Hogwash, responded Republicans. But the charge from Maryland Gov. Martin O'Malley is evidence of the political nervousness among Democratic governors looking ahead to 2012 after their ranks were thinned in the last election. It also hints at the tenuous control the president has over jobs and the economy, the issues certain to dominate the elections. At this weekend's meeting of the National Governors Association, O'Malley has said Republican governors should urge GOP lawmakers to make a deal with Obama to increase the government's borrowing limit before the Aug. 2 deadline when U.S. faces a financial default. The Republicans seem to be led by uncompromising hard-liners, he said, singling out House Majority Leader Eric Cantor, R-Va., for criticism. "I think that there is an extreme wing within their party who have as their primary goal not the jobs recovery, but the defeat of President Obama in 2012," O'Malley said in an interview. "They know that their formulations, their policies of less revenues and less regulation badly failed our country and plunged us into this recession. So their only way of evening the playing field is to keep the president from being successful in the jobs recovery."

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He contended that key Republican members of Congress, "through their intransigence, cleverly set up a situation for America's economy to fail, either by needlessly driving us to default, or needlessly driving us into massive public sector layoffs." "I think that they are disgracefully cynical," said O'Malley, who has a prominent profile as head of the Democratic governors' group. Michael Steel, a spokesman for House Speaker John Boehner, R-Ohio, said "jobs and our economy are serious issues, and that kind of unhinged partisan rant doesn't help. We're focused on doing everything we can to help the economy grow by cutting red tape, increasing the supply of American energy, and ending the out-of-control spending spree in Washington." Senate Republican leader Mitch McConnell's office did not directly respond to O'Malley's remarks. But the Kentucky lawmaker's office noted that Obama, while a senator in 2006, voted against raising the debt ceiling and accused Republicans of "leadership failure." O'Malley, who some believe has national aspirations for 2016, acknowledged that it's rare for one elected official to accuse others of trying to hurt Americans for political gain. "For eight years under George W. Bush, you never heard a peep from any of these most intransigent House members about the deficit that was being racked up by President Bush. Many of the same people who are claiming that there's no possible way that they can vote to raise the debt ceiling are people that voted to raise it in the past," the governor said. O'Malley spoke openly about something that has troubled top Democrats for months. With unemployment at 9.2 percent, a further decline in the economy could make it difficult for any president to win a second term. The president has limited ability to control the economy, especially with Republicans running the House. House Republicans have rejected Obama's demands for tax increases on the rich in exchange for deep spending cuts. That's in keeping with a no-new-tax pledge that most GOP lawmakers have signed in recent years. O'Malley says their ulterior motive is to promote an economic downturn by blocking a resolution of the debt ceiling crisis or by slashing government spending so deeply that hundreds of thousands of people will lose their jobs. Of course, a sour economy could hurt some Republican incumbents too. But politicians think presidents and governors get the most blame for bad economies, and only a handful of GOP governors might be seeking reelection next year.

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Obama's campaign aides are keenly aware that the economy could worsen, and they want to focus the 2012 election on GOP weaknesses, not the president's stewardship of the economy. Even with the Republican nomination far from settled, Obama's advisers have begun criticizing the records of various contenders, including former Massachusetts Gov. Mitt Romney. They are prepared to run a campaign that essentially says: You may be unhappy with Obama, but the alternative would be worse. Republican governors reject O'Malley's claims and say they want a stronger economy. But they agree that Obama's re-election hopes ride on that issue, and the president may be in trouble. "If the election is about Obama's policies and the effects of those policies, he'll lose," said Mississippi Gov. Haley Barbour, who contemplated challenging Obama. "Campaigns are supposed to be about an incumbent's record." Gov. Terry Branstad, R-Iowa, defended the Republican debt negotiators, especially Cantor. Obama carried Iowa easily in 2008, after winning the Democratic caucus. But leaders of both parties expect a highly competitive race there next year. "We launched him," Branstad said of Obama, "but we can sink him."

Wash Post: Partisan-osaurus threatening Washington, OMalley says

By John Wagner Friday night in his latest attack on Republicans: that of partisan-osaurus. The creature, OMalley told a crowd of Utah Democrats, has the body of Tyrannosaurus rex and the head of House Majority Leader Eric Cantor (R-Va.), and it is threatening Washington. We are watching the latest incarnation of the dinosaur wing of the Republican party, OMalley said, referring to the impasse over raising the federal debt ceiling. We cannot allow partisan-osaurus to take over the Republican party or the future of this country. OMalleys remarks came during a speech to about 500 people attending a Democratic Jubilee dinner in Salt Lake City sponsored by the Utah State Democratic Party. OMalley is in Salt Lake City attending a summer meeting of the National Governors Association.

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The speech was the latest in a string of similar addresses OMalley has delivered around the country since becoming chairman of the Democratic Governors Association, an organization that raises money and seeks to elect fellow party members nationally. While acknowledging he was having some fun at the expense of Republicans, OMalley also said Friday that Democrats need to be willing to work with reasonable members of the party of Lincoln. There are still good and responsible people in the Republican party, he told the crowd. As he did in previous appearances in Virginia, New Jersey and Kentucky, OMalley also criticized a new breed of tea-partying Republican governors, who he said Friday are trying to take the country back to the 1920s.

Wash Post: OMalley: Silence of GOP governors on debt impasse is deafening

By John Wagner Maryland Gov. Martin OMalley led a chorus of Democratic governors who on Thursday chided their Republican counterparts for not playing a more constructive role in the federal debt-ceiling negotiations. The silence is deafening from the Republican governors, OMalley said. We need our Republican colleagues to stand up and say, Enoughs enough. ... The dinosaur wing of their party is silencing the more moderate wing of their party. OMalleys comments came on the opening day of a summer gathering of the National Governors Association in Salt Lake City. OMalley, who chairs the Democratic Governors Association, held a news conference with three colleagues from his party just prior to the NGAs evening welcome reception. At the event, the Democrats warned of dire consequences for states governed by both parties if the United States defaults on its debts. They all know what this would do to their own bond ratings, Connecticut Gov. Dannel Malloy (D) said of his Republican counterparts in other states. The news conference was the start of a busy few days in Utah for OMalley, who is trying to build his national profile.

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He is booked as the keynote speaker at the Utah Democratic Partys annual Jubilee dinner on Friday night and is leading an NGA panel on homeland security and public safety on Saturday. Besides Malloy, OMalley was joined at Thursdays news conference by North Carolina Gov. Bev Perdue (D) and Montana Gov. Brian Schweitzer (D). Perdue voiced concern that federal budget cuts that are part of a late-hour debt-reduction agreement could also be damaging to states and said she and her colleagues are closely monitoring the situation. OMalley left Maryland early Thursday morning on a flight with his wife and an aide, and he plans to return Sunday. By John Wagner | 10:25 PM ET, 07/14/2011

Washington Examiner: Md. bond sale hinges on federal debt talks

By: Hayley Peterson | Examiner Staff Writer Follow Her @hcpeterson | 07/16/11 8:05 PM Maryland officials are considering postponing upcoming bond sales if Congress doesn't reach a deal on the debt ceiling soon. The state is planning to sell $100 million in bonds to Maryland residents beginning July 22, the same day that President Obama has said he wants to reach a compromise with Republican lawmakers on raising the U.S. debt ceiling and slashing the long-term deficit. On July 27, the state is scheduled to begin selling more than $600 million in general obligation bonds. "If they don't have the debt ceiling issue resolved, the markets will be chaotic, and we will probably postpone the sale," Patti Konrad, director of the Maryland state treasury's Debt Management Division, warned lawmakers. Uncertainty over the federal government's ability to meet its debt obligations could spike interest rates, which would make it more expensive for Maryland to pay back the interest from the bond sales. U.S. Treasury officials have set an Aug. 2 deadline for Congress to raise the debt ceiling or risk defaulting on its debt.

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Obama has called congressional leaders to the White House daily for the past week to work out a compromise that would raise the $14.3 trillion debt ceiling and cut between $2 trillion and $4 trillion from the U.S. deficit over 10 years. But negotiations are gridlocked, and Gov. Martin O'Malley is acutely aware of the implications for Maryland, whose economy is heavily dependent on the federal government. Maryland ranked fourth in the nation for per-capita federal spending in fiscal 2009, according to the most recent government data. Businesses in the state raked in roughly $34 billion that year in federal contracting dollars. O'Malley is petitioning Republican governors to weigh in on the issue and urge a compromise. "The silence is deafening from the Republican governors," said O'Malley, who is chairman of the Democratic Governors Association. "We need our Republican colleagues to stand up and say, 'Enough's enough.' ... The dinosaur wing of their party is silencing the more moderate wing of their party." Moody's Investor Services, one of the three credit rating agencies that reaffirmed Maryland's triple A bond rating last week, said it must re-examine the ratings of borrowers like Maryland as federal debt talks continue. Maryland's economy "continues to be proportionately more affected by the activities of the federal government than any other state," the agency reported. Standard & Poor's also warned, "Absent a timely resolution to the ongoing debt limit negotiations at the federal level, the risks to the state associated with a decline in federal funding could accelerate." hpeterson@washingtonexaminer.com

Bloomberg TV: O'Malley Says U.S. Default Would `Wreck' Jobs Recovery
July 15 (Bloomberg) -- Maryland Governor Martin O'Malley, a Democrat from Maryland, discusses the bipartisan negotiations on the federal deficit and debt limit and the potential impact of the nation defaulting on its financial obligations. O'Malley speaks with Megan Hughes at the Democratic Governors Association meeting in Salt Lake City on Bloomberg Television's "Bottom Line." http://www.washingtonpost.com/business/omalley-says-us-default-would-wreck-jobsrecovery/2011/07/15/gIQA8jtkGI_video.html

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MSNBCs Daily Rundown: Gov. OMalley: Governors worried about credit ratings
http://www.msnbc.msn.com/id/21134540/vp/43793890#43793890

Gov. Gregoire
The State Column: Gov. Chris Gregoire: States are in a fragile state of recovery
The State Column | Staff | Saturday, July 16, 2011 Washington governor Chris Gregoire warned Friday that a U.S. default could harm U.S. states, pushing them back into recession. States are in a fragile state of recovery and the debt- ceiling debate is undermining consumer and business confidence, the Washington Democrat said Friday while attending a National Governors Association meeting in Utah. Its time to put this issue behind us and get on with the issue confronting every American, which is, Do I have a job and will I have a job tomorrow, Ms. Gregoire, a second-term Democrat, said in a press conference. Ms. Gregoires comment comes as congressional lawmakers continue to debate raising the nations debt limit. President Obama has called on lawmakers to reach deal by Sunday. The Treasury Department has said the U.S. will default on its financial obligations if a deal is not reached by August 2. Speaking Saturday in his weekly radio address, President Obama called on Republicans to raise the debt ceiling, adding that he is willing to compromise and members of Congress should prepare to do the same. Republicans have refused to consider tax increases to reduce the deficit.

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Gov. Quinn
Chicago Sun Times: Gov. Pat Quinn to Salt Lake City for governor's meeting; Democratic governors fund-raiser
By Lynn Sweet on July 12, 2011 6:21 PM | WASHINGTON--Illinois Gov. Pat Quinn heads to Salt Lake City this week for the National Governor's Association meeting and a fund-raiser for the Democratic Governor's Association. Quinn is the finance chair of the DGA. ***Media Advisory*** DGA Schedule for 7/14-7/15 Washington, DC--This weekend, the National Governors Association (NGA) will be holding its semi-annual meeting in Salt Lake City. Democratic Governors scheduled to attend the meeting include Governors Neil Abercrombie (HI), Christine Gregoire (WA), John Hickenlooper (CO), Dannel Malloy (CT), Jack Markell (DE), Jay Nixon (MO), Martin O'Malley (MD), Bev Perdue (NC), Pat Quinn (IL), Brian Schweitzer (MT), and Peter Shumlin (VT). In addition to the NGA schedule, Democratic governors, including DGA Chair Martin O'Malley and Vice Chair Bev Perdue, will be hosting a press conference on Thursday to discuss the state of the economy and the urgent need for leaders in Washington to join together to reduce the deficit, raise the debt ceiling, and focus on job creation. O'Malley will also keynote the Utah Democratic Party's annual Jubilee dinner on Friday evening. Thursday, July 14 5:00 PM Democratic Governors Hold Press Conference Hotel Monaco Paris Ballroom B 15 W 200 South Salt Lake City, UT Friday, July 15 7:00 PM DGA Chair O'Malley to Keynote Utah Democratic Jubilee Dinner 40

Salt Lake City Hilton Hotel 255 S West Temple Salt Lake City, UT ###

Gov. Hickenlooper
Politico: Hickenlooper: Colorado tough for Obama
By: Alexander Burns

July 16, 2011 12:10 PM EDT

Colorado Gov. John Hickenlooper predicted that President Barack Obama will have to fight hard to keep his state in the Democratic column in 2012, four years after Obama thumped John McCain there by a 9-point margin. Asked whether Obama would hold Colorado if the election were held today, Hickenlooper said: It depends on who his opponent was. I think itd be a very close battle. Hed have a hard time. Theres such dissatisfaction over people who have been out of work, not just for a few months but for a year and a half or two years, said Hickenlooper, a Democrat, who spoke to POLITICO at the National Governors Association meeting in Salt Lake City. Colorado is one of several states that have tended to vote Republican in presidential elections that Obama flipped to the Democratic column in 2008. The Obama campaign has signaled that keeping Colorado in the Democratic column along with emerging swing states of Virginia and North Carolina is a top priority for 2012. Hickenlooper, a former Denver mayor and restaurateur elected governor by a wide margin in 2010, suggested the administration could benefit politically if it gave state governments more room to experiment with big-picture policy solutions. He suggested that Obama could win over a lot of governors and a lot of states by providing some more flexibility in those places where he has flexibility, such as No Child Left Behind, loans for unemployment insurance and implementation of the Affordable Care Act. 41

On health care, he praised Health and Human Services Secretary Kathleen Sebelius for being open so far to working with those states that are committed to obtaining the goals laid out in the Affordable Care Act, to tailor state-specific policies to expand access to health care and lower costs.

Gov. Markell
The News Journal: Markell in line to lead governors
Delawarean named NGA's vice chairman 1:13 AM, Jul. 18, 2011 Written by CHAD LIVENGOOD The National Governors Association on Sunday tapped Gov. Jack Markell to be its vice chairman for the next year, putting him in line to lead the group starting next July. Some of Markell's fellow governors said Delaware's chief executive could be uniquely positioned to advocate in Washington on economic, education and financial issues of importance for recession-battered states. "I don't want to get Gov. Markell in trouble, but he's probably my favorite Democrat," said Indiana Gov. Mitch Daniels, a Republican. "Unlike some in his party, he appreciates that government at its best promotes the flourishing of private life." Markell's direct pipeline to Vice President Joe Biden also is seen as an advantage for the NGA in negotiating with the White House on pertinent issues facing the state. "That's why he's great for us, because he has such a great relationship with the vice president," said Washington Gov. Christine Gregoire, the outgoing chairwoman of the NGA. Added Daniels: "I think Jack could be a really persuasive spokesman for us." The NGA changes leadership each July, with the vice chair typically rising to the chairman's post.

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Each year, the chair and vice chair positions rotate from Democrat to Republican to create a bipartisan split in leadership. The governors elected Markell vice chairman at the NGA's 103rd annual meeting in Salt Lake City this weekend. Nebraska Gov. Dave Heineman, a Republican, was elected chairman for the next year. Markell will likely become chairman from July 2012 to July 2013, presuming Delaware voters give him a second term next November. If elected chairman, Markell would become the third Delaware governor to lead the group in its 103-year history. Tom Carper served as NGA chairman in 1998-99, and J. Caleb Boggs chaired the group in 1959-60. This is not Markell's first national political leadership post. He served as chairman of the Democratic Governors Association from 2009 to 2010 and has served on NGA committees. Markell said he uses the group to identify better ways other states are creating jobs, reforming public education systems and restructuring government. "When we're together, we don't really care -- I certainly don't care -- if an idea is a Republican idea or a Democratic idea," Markell said. "If there's an idea that's very creative and effective, I'd like to borrow from it." Contact Chad Livengood at 324-2832 or clivengood@delawareonline.com.

PBS Newshour: Governors Tell Washington: Find a Compromise on Debt Limit

SUMMARY Govs. Scott Walker, R-Wis., and Jack Markell, D- Del., speak with Ray Suarez on the impact the debt limit debate could have across the country. They join the NewsHour from the National Governors Association's Annual Meeting in Salt Lake City, where these and many other questions are being debated. RAY SUAREZ: Now, how might the debate in Washington impact states across the country? It's one of the questions being examined at the National Governors Association's annual meeting, which kicked off today in Salt Lake City, Utah. And now we are joined now by two governors attending the conference, Republican Scott Walker of Wisconsin and Democrat Jack Markell of Delaware.

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And, gentlemen, embedded in all these debates, both in states across the country and in Washington, there seems to be one overriding question: What is government for? Governor Markell, why don't we start with you? What is government for? GOV. JACK MARKELL D- Del.,: Well, what we really have to do these days is just focus on a handful of key issues. That really means helping put people back to work. Government is not going to create the jobs, but government has got to create the environment. What businesses are looking for are governments who create great schools, but reasonable taxes, great quality of life, a lot of responsiveness. We're also looking obviously to make sure that we do continue to improve the schools. And we have got to make sure that we have a reasonable tax load. So those are the main things. We have got to make sure that our taxpayers -- that we're good stewards of our taxpayers' money. That's what they are looking to us for. RAY SUAREZ: And, Governor Walker, let me turn to you with that same question. What is government for? GOV. SCOTT WALKER R- Wis.: Well, I -- yes, I think if you were to join us out here -- Jack and I were talking about this earlier and other governors talking -- Democrat, Republican alike, at least as governors in the states, we are doing exactly what they should be doing in Washington. And that is working together to get things resolved. The two big issues we hear about are balancing the budget and putting more people to work. When you balance the budget and put people to work, you help with education, you help with quality of life, you help with the basic safety net. Governors in each of the states, respectively -- about 40-plus states have had deficits, and we're turning them into balanced budgets, because we have to in the states. They're just not doing that in Washington. And I think it goes back to those core principles. Make sound structural decisions that put the budget in place, so that it is balanced, and ultimately do things that do not hurt, and, ideally, help the economy, because more than anything else, we have got to get people working again. RAY SUAREZ: Well, Governor Walker, do people want or endorse the notion of smaller government at the same time as they want government services? GOV. SCOTT WALKER: Well, I think they want a balance. Outside of government, there isn't the false choice we often hear of government that you either have to jack up prices or cut the quality of services. In the private sector, particularly in the last couple of years, you have seen employers, particularly in small

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businesses, find a way to balance the two out, become more efficient, become more effective, and find ways to streamline things, so that ultimately they can still provide an affordable product at a quality level that people expect. In government, we need to find better ways to do that as well. And, again, that's what we are doing in the states. Democrat, Republican governors alike, we have been talking about best practices here today already. We need to find a way to make structural changes at the federal level, just like we have been doing at the states, so that it is not just a shortterm fix, because that is really what got us into this problem. Republicans and Democrats alike have been deferring things in Washington off into the future. Well, the time to act is now. And my hope is that they will follow our lead and in the states respectively. RAY SUAREZ: Governor Markell, does it make it hard to be in charge at a time of straightened circumstances, when people tell public opinion researchers very sincerely they want smaller government, and then howl when you try to cut back? GOV. JACK MARKELL: It is a very challenging time, and especially -- we also have to remember Hubert Humphrey once said that the greatness of a nation is measured in how we treat those in the dawn of life, the dusk of life, and the shadow of life, the very young, the very old, those who cannot care for themselves. So what we are really trying to balance here is we have a responsibility to protect those who are most vulnerable. We also want to put each of our states in a position where we are poised to grow and to help as many families as possible enter the middle class and go as far as they can possibly go, while, at the same time, balancing our budgets. This has been -- these have been very difficult times to be governors. But if you focus in and you really focus in on the idea of putting more people back to work especially, that will help solve so many of the other challenges that we face. RAY SUAREZ: Governor Walker, you have made headlines across the country. You came to office in Madison vowing to change the direction and -- of government spending very quickly. Were the people of Wisconsin ready? GOV. SCOTT WALKER: Well, I think what we weren't ready for -- and I have said this before -- I have had to make a change -- was to spend more time in January and February building the case. But I think what we weren't prepared for was the national focus, the national attention, the national money that came in when we were trying to fix the problem and do it in the way that many small business owners do, and that is to identify the problem, identify a solution, and then act on it, never realizing how much money and influence and ads that would come in from across the country.

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What you are seeing, though, now is not only in other states, like Ohio, but you even see New York State -- Governor Cuomo has done some similar things. In Massachusetts, they have done similar things . I think earlier today, Jack and I heard a story from Governor Christie where he worked with the Democrats in the legislature there to make some changes. Each state is different, so, respectively, we have got to do things slightly differently. But for us, we are already seeing the benefits. We -- school district after school district, local government after local government in the last few weeks has talked about the fact that because of our reforms, many of them are not only avoiding layoffs. They're actually bringing more teachers back in. They're lowering classroom size. They're even setting money aside for merit pay. Our hope is that we can continue to see those signs all across Wisconsin. When you do that, it not only helps us balance the budget. It makes the government work better. And it allows us to continue the trend of the 26,000 new private sector jobs we saw created earlier this year, about half of which are in manufacturing, which is a core industry for us. RAY SUAREZ: Governor Markell, you have been publicly on record criticizing the race to the bottom among states. But you had to make hundreds of millions of dollars in cuts, too, didn't you, social services and other agencies? GOV. JACK MARKELL: We did. I mean, it's been very challenging. And I think, on the issue of the pension health care reform, we had many of the similar issues. We took a different approach than Governor Walker took in Wisconsin. We have collective bargaining in our state. We didn't try to get rid of that. We actually brought the unions to the table. We asked for their ideas and their participation. We actually exceeded the savings target that we -- that we set. But we thought it was important that we do have them on the table, recognizing that -- if you look at it from this perspective, if you ask any business, what is the most important asset to your business, most will say it's the people who come to work every day. And, similarly, in state government, it might be the people who are caring for our patients in the state hospital in the middle of the night. It might be the people driving the trucks to plow the snow while the rest of us are sleeping. And in Delaware, the approach we took is, we had them come to the table. We worked out an approach together. We ended up, as I say, saving about $130 million over five years on pension and health care. But that being said, this continues to be a very challenging time. We don't have a strong national economy at our backs yet. And no matter what party we're in, what part of the state we are in, we have just got to continue to focus and how can we facilitate businesses being successful in our state, so they can put more people to work.

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RAY SUAREZ: Governor Markell, do you support raising the federal government's debt limit? GOV. JACK MARKELL: Oh, I do. I mean, I think it would be -- it could be catastrophic if the debt limit doesn't get raised. And if they're not able to get things together in Washington, it's not going to be good for any governor across the country. I don't think it's going to be good for the American people. So I'm very hopeful that Republicans and Democrats alike, the administration and those in the Senate and the House will all be able to figure this out, because I think the idea of not -- the idea of this country defaulting on its debt could absolutely be a terrible, terrible thing for our country. RAY SUAREZ: Governor Walker, same question. Do you support a raise in the federal government's debt ceiling? GOV. SCOTT WALKER: Well, my hope is, if we pursue that, we ultimately have some long-term structural changes, so that we are not revisiting this just a couple years down the road. Again, many of our states, Democrat, Republican governors alike, can make long-term structural changes, so that we are really thinking less about the next election and more about the next generation. But the other part is, we want to make sure we do it in a way that helps the economy. The biggest single thing -- and Jack and I were on a panel a couple weeks ago at the U.S. Chamber of Commerce. And we hear it repeatedly in each of our states and across the country on a national basis. The biggest single thing of standing in the way of employers, big and small and everyone in between, adding more jobs, is uncertainty. To the extent that we can get past this debate, we can have some sanity in Washington again, we can start getting back to a point where employers understand and have certainty as to what the future holds, I think that would be optimistic for us putting people back to work. The longer this lags on, and the less certainty they have, the more challenging it is. So, I think all of us who care deeply about putting our people back to work want to have certainty, want us to move forward. RAY SUAREZ: Before we go, I would like to hear from both of you about your own uncertainty. As this Washington debate bumps along, aren't you catching your breath a little? Don't your own budgets depend in part on federal government spending plans for '11, '12 and '13?

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Governor Markell? GOV. JACK MARKELL: They certainly -- it certainly does. And that being said, we can control what we can control. So when -- I wake up every day focused on working with businesses in Delaware, trying to make them more successful, so they will put more people to work, working with teachers and other school-based personnel, administrators to make sure that our schools are as good as they can be, because that is the only way to have a strong economy going forward. And, of course, we work carefully -- closely with our congressional delegation and with other governors, so that we're reaching out to Congress to make sure that, as costs get shifted around, they just don't get shifted to the states, because we all serve the same taxpayers. And just shifting an obligation from a federal tax payer to a state taxpayer really doesn't achieve very much. But we're absolutely -- yes, this is a critical issue for states across the country. RAY SUAREZ: And, Governor Walker, let me get a quick response from you as well. GOV. SCOTT WALKER: Yes, I think there is a similar concern regardless of party. Jack and I and others today talked about this, certainly concern about not only spending changes, but in terms of what kind of tools they give us to react to whatever those might be. Combine that with the fact of the economy. It certainly has a direct impact if they don't get this worked out on municipal and state bond issues. And in the larger context, it has an impact on the economy. If things are unstable, it's going to be hard for us to put people back to work. I'm optimistic we are going to get this done and get back to stability and get back to putting people to work in Wisconsin and Connecticut and all across the country. RAY SUAREZ: Governors Walker and Markell, gentlemen, thank you both. GOV. JACK MARKELL: Thank you.

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