Obama meets with governors on economy

WASHINGTON — President-elect Barack Obama is meeting with nearly all the U.S. governors in Philadelphia next Tuesday to discuss how the economic crisis is crimping states and their budgets.

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Nick Shapiro, a spokesman for the Obama transition, said the meeting will provide an opportunity for Obama and Vice President-elect Joe Biden to talk with state chief executives about "the unique challenges facing our states." The discussions are being hosted by National Governors Association Chairman Ed Rendell and Vice Chairman Jim Douglas.

Douglas said 40 governors and governors-elect plan to attend the group discussion, which was put together just in the last few days, at the city's famed Independence Hall .

"It's short notice, some grumbled, but virtually everyone has cleared his or her calendar," said Douglas, the Republican governor of Vermont.

Alaska Gov. Sarah Palin, running mate to Obama's Republican opponent in the presidential race, Sen. John McCain, also planned to attend the gathering, her office said.

On Monday, Obama asked Congress to ready an economic stimulus program for him to sign as soon as possible after he takes office on Jan. 20. Estimates of the spending range from $500 billion to $700 billion over two years, and Democratic congressional officials say it could aid cash-strapped states to provide health care to the poor, along with road and bridge funding.

Many economists think that aid to state and local governments should be tops on the agenda for any new stimulus spending, as they have less borrowing authority than the federal government during an economic downturn. That means that states are slashing budgets as the slowdown causes tax revenues fall.

Washington state Gov. Chris Gregoire, a Democrat, plans to push spending on infrastructure projects.

"We are facing one of the biggest challenges since the Great Depression," Gregoire said. "Our challenge is to find opportunity in this adversity to institute changes that will make us stronger."

Rendell is the Democratic governor of Pennsylvania. Though a supporter of Hillary Rodham Clinton in the Democratic primary race, he campaigned for Obama in the general election and was mentioned as a possible Cabinet member under an Obama administration, possibly as Energy or Transportation secretary. He has ruled that out, however, and pledged to remain in his current post until 2011.