Governors warn Washington against fiscal inaction

By Thomas Beaumont

Associated Press

Published: Friday, Aug. 2 2013 3:29 p.m. MDT

One of President Barack Obama's motorcade vehicles is seen parked in front of the US Capitol Building in Washington, Tuesday, March 12, 2013.

Pablo Martinez Monsivais, AP

Enlarge photo»

MILWAUKEE — The nation's governors have a warning for President Barack Obama and Congress: A fiscal standoff in Washington this fall could be catastrophic for states already feeling the fallout of sweeping cuts in federal spending.

"When there's uncertainty in Washington, D.C., that uncertainty can affect our economic climate and revenue growth," Oklahoma Gov. Mary Fallin, a former U.S. House member, said Friday. She echoed the concerns of her counterparts in other states at their annual three-day summer conference. The meeting opens on the same day Congress was leaving Washington for a five-week break with key pieces of consequential work unfinished.

"All those things left undone, the uncertainty in Washington has an impact," she added.

The fast-approaching fiscal showdown — and the governors' deep contempt for Washington's inability to break impasses on spending — hung over the meeting in swing-voting Wisconsin.

As the conference began, Republicans and Democrats alike bemoaned the cost of Washington's inaction for states struggling to recover economically and striving to attract employers.

"When they see other countries invest in transportation...and we're not, that's a strike against us," said Delaware Gov. Jack Markell, a Democrat. "When you want some kind of predictability with respect to immigration ...that's a strike against us."

Washington-bashing — a favorite pastime of governors — was certain during a series of public sessions and private meetings intended for state leaders to trade ideas on solutions to common problems, like containing health care costs, creating jobs and ensuring homeland security. The weekend agenda included discussions on cybersecurity, prison reform and "building a national consensus on infrastructure" with Transportation Secretary Anthony Foxx.

Policy aside, the gathering also provides governors eyeing the 2016 presidential race an opportunity to build alliances, test messages and command the spotlight. Among them: the conference's host governor, Republican Scott Walker, who plans to lead a parade of Harley-Davidson motorcyclists through the streets of Milwaukee on Saturday. Other possible candidates — Republican Chris Christie of New Jersey and Democrat Martin O'Malley of Maryland also were expected to be among the roughly two dozen governors in attendance.

Fiscal uncertainty appeared at the top of governors' concerns.

The new federal budget year begins on Oct. 1, and a stopgap funding bill will be necessary to prevent a government shutdown, which would halt the flow of federal dollars for programs in education and natural resources and could idle thousands of workers.

While Democratic and Republican leaders have signaled a desire to avert such a situation, tea party Republicans in Congress are threatening a partial shutdown if the budget includes money to implement the 2010 health care law. Another showdown also looms over must-pass legislation increasing the government's borrowing cap to prevent a default on debt obligations that could rattle the financial markets.

The drama on Capitol Hill draws particular scorn from governors, who are bound by stricter budgeting rules than the federal government.

Markell, chairman of the national governors group, led a delegation of Democratic and Republican governors to Washington in December to advise Obama and congressional leaders on the effects of across-the-board spending cuts that took effect in March.

"You go from that to a total shutdown? That takes it to another whole level," said Markell.

In an opening news conference Friday, a half dozen governors highlighted state progress on issues that Congress and the president have failed to act on.

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