Governors target possible second stimulus bill

updated 12:33 p.m. ET Feb. 25, 2008

WASHINGTON - Governors are debating priorities if Congress takes up a second stimulus package, with some state leaders pushing for federal money to repair roads, water systems and bridges.

Governors hoped to raise the issue of infrastructure on Monday with President Bush at the White House.

"There are a lot of projects in every state where the architectural design has been done, where literally they're ready to tap into the ground and begin construction," said Democratic Gov. Ed Rendell of Pennsylvania.

Rendell and a bipartisan group of governors are pushing public works as part of a potential second stimulus package. Democrat Eliot Spitzer of New York and Republican Arnold Schwarzenegger of California are among the governors demanding federal action.

"We owe it to the people of America to join together and rebuild our country," Schwarzenegger said.

Bush this month signed an economic stimulus package to send $300 to $1,200 rebate checks to millions of Americans and to offer tax incentives to businesses. He opposed including infrastructure projects because "it's not really a stimulative way to get the economy going," White House press secretary Dana Perino said Monday.

Asked how Bush views the governors' push for infrastructure projects, Perino said: "Outside of the stimulus package, if they have other ideas, I'm sure he'll be willing to listen to them."

Several governors on Sunday announced their support for the Building America's Future coalition, a public works advocacy group that includes New York Mayor Michael Bloomberg. The group estimates the country's infrastructure needs exceed $1 trillion.

Through a weekend of meetings in Washington, governors discussing infrastructure frequently cited last August's collapse of the Interstate 35W bridge in Minneapolis into the Mississippi River, which killed 13 people and injured 145.

At a private meeting Sunday, governors authorized staff members of the National Governors Association to begin listing positions the group could take on a second stimulus package.

NGA chairman Tim Pawlenty, the Republican governor of Minnesota, didn't rule out public works projects, but he questioned their short-term value.

"It's helpful in the intermediate term," said Pawlenty. "In terms of an immediate boost, there's a lag time between when those things get approved and we actually get dirt moving."

Last month, governors asked congressional leaders debating the initial stimulus package to freeze planned reductions to Medicaid, the state-federal health insurance program for poor families and children. They also asked for $6 billion in a flexible block grant to be used as states saw fit.

Pawlenty said Sunday that governors never got a response.

Governors are eager to continue fighting the Medicaid cuts, saying a poor economy is not the time to reduce the safety net for the poor and ask states to do more financially.

"States across America are facing some real constraints on their budgets, and to exacerbate that to the tune of $13 billion for these Medicaid regulation changes is particularly inopportune right now," said Republican Gov. Jim Douglas of Vermont.

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