Governors to Obama: Don't dump "fiscal cliff" costs on states

If President Obama wants to get past partisan rhetoric and consider the real consequences of going over the so-called "fiscal cliff," his meeting with six governors today could do the trick.

The three Democratic and three Republican governors, all members of the executive committee of the National Governors Association, are meeting with the president to warn that if Democrats and Republicans in Washington fail to hash out their differences and find a responsible way to avert the "cliff" -- a series of spending cuts and tax hikes set to kick in next year -- they'll be the ones left with the tab.

"One of the important things we want to make sure that people in Washington understand is that if all that's done is a cost shifting from the federal government to the states, it really doesn't accomplish very much because states aren't in a position to pick up the extra costs," Delaware Gov. Jack Markell, chairman of the National Governors Association, said on Fox Business last week.

Along with Markell, Mr. Obama is meeting with Democratic Govs. Mark Dayton of Minnesota and Mike Beebe of Arkansas, as well as Republican Govs. Gary Herbert of Utah, Scott Walker of Wisconsin and Mary Fallin of Oklahoma, the vice chair of the NGA. After meeting with the president, the governors will meet with House Speaker John Boehner and Senate Majority Leader Harry Reid.

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These governors, of course, represent a range of political views, and their high-profile positions give them ample opportunity to carry out partisan agendas. Walker became something of a conservative icon over the past two years as he locked horns with labor unions. Fallin, meanwhile, riled up a heated debate in her state last month by by spurning parts of Mr. Obama's health care law, the Affordable Care Act, prompting a flood of phone calls to her office on the issue.

The nature of state politics, however, can often compel state leaders to think more pragmatically than Washington politicians. Katharine Tinucci, press secretary for Minnesota Gov. Mark Dayton, insisted that partisan divisions aren't going to get in the way of the message the governors have today. "As the federal government looks to make cuts to programs, it is important that they don't simply pass along the burden to states," she said. "Any cuts should be accompanied by increased flexibility for states to manage programs and find savings."

Matt DeCample, communications director for Arkansas Gov. Mike Beebe, noted the urgency of the issue at the state level: We can't deficit spend -- any cuts are real cuts we have to immediately take."

About one third of state funding comes from the federal government, according to the Pew Center for the States, meaning Washington's spending decisions could have a serious impact on state budgets, in areas like health care and education. DeCample said the Arkansas government calculates that state risks seeing $55 million in cuts to its federal-state funded programs because of the "fiscal cliff."

"You've always had governors coming from states with stridently different approaches to national issues, but they all, at the baseline, share the same concerns," DeCample said.

[johnlockesghost]

Wow! Listen to the partisan trash being stated as comments! We'll certainly solve the nation's problems with thinking like that. For all who try to blame the recession on either political party, I would remind you that both parties gave the banks the leverage to screw all of us through their connivance with mortgages and hiding the fact that many people could not afford their mortgages, by grouping them willy nilly into packages called derivatives. The reason that the banks were never held accountable was because the politicians would have had to expose themselves as abetters. Now we have the same people, regardless of party, and the bankers trying to tell us that they have the solution to our indebtedness and the other party doesn't. And you people are gullible enough to fall for it. You likely fell for that wonderfully effective piece of propaganda that some businesses were too big to fail. PFUI!

[GOP-R--Con-Men]

Typical republican preferring a freewheeling hands off let business do whatever they want approach. Which is precisely what got America in this mess.

[unclebernies]

We are trying to allow the states to deal with their own problems just as you Repubs have been asking.

[packerphan]

So .... what happened to the preaching of "State's rights." They wanted all the responsibility AND money before ....

[facelessdrone2005]

If Congress cuts funding for programs administered by the States without eliminating the programs themselves, then the costs WILL be dumped back on the States. The only way this can be prevented is by either eliminating the programs or fully funding them. If the GOP wants to eliminate social programs like they always say they want to do, then fine, let's hear which ones they put on the chopping block? I'm okay with cutting some programs to save money, but it's just not honest to cut the funding but keep the program.

[hypnotoad72]

States are strapped, government still gives entitlement after entitlement to the companies that offshore jobs, and since offshoring (along with any wage devaluation) makes it harder to raise the same amount of revenue...

Forget tax hikes, let's try pragmatic change instead... you know, bringing back jobs at wages adjusted for inflation?

More reading:

http://www.realitybase.org/journal/2009/3/10/the-american-dream-died-in-february-1973.html

http://forward.com/articles/166154/americans-and-our-stuff/?p=all

[democracy8]

"The create jobs in American..."

Yup, we have a stupid people problem.

[mcsameahole]

Man, these governors don't get it. They need to go talk to Boehner. We must allow the tax breaks for the rich expire. We should also be raising taxes on corporations and eliminating all corporate tax loop holes, breaks, shelters and subsidies. We need to spend money on the middle-class, not on corporations. It makes me puke that the tax money I have paid over my career has gone to companies like exxon and walmart while the rest of us have no health care, no jobs and no future.

[mjvwsr]

Businesses don't pay taxes; people do. The total tax burden of every business is built into the price of the good/service they provide. You raise their taxes; you raise the price you pay.

You're the one who doesn't get it.

[usbworks]

MJVWSR: Businesses don't pay taxes? Huh?

So that Schedule C for including sole proprietorship profits and Schedule F for farm businesses should be ignored. How about distributions from partnerships, LLC's and subchapter S corporations?

Everyone knows that corporations don't need to file income tax returns in the US right? That's why they have accountants, CPAs and CFOs.

You should alert Apple, Microsoft, HP and Google. There's no need for them to use Ireland and the Cayman Islands to export their corporate profits out of the US to lower their taxable corporate income.

Look dude even if you've been asleep all your life, at least do a quick Google search, before revealing your ignorance.

[GOP-R--Con-Men]

I have been analyzing the GOP for years and I have deciphered their playbook. And some of the things they do will seem strange unless you know what their goals/end game actually are. Remember everything they do is toward that end.

1. Republicans love deficits when they are the party that creates them. Now you might say, why is that? Republicans hate government and it's ability to help ordinary Americans. Have any republican president EVER ran a deficit by spending money on people to benefit them? No! So what do they do? They empty the treasury wasting money on unnecessary wars and tax giveaways to corporations, big oil and the super rich while ordinary Americans are in dire need of help from their government. Those entities don't need the money and some never asked for it. But republicans know they can use a empty treasury to proclaim the country is broke and we can't afford this or that program for ordinary Americans.

Then they say you should pull yourself up by your bootstraps. Even though republicans cut the bootstraps and programs that might help you. But they have NO PROBLEM giving billions to corporations, big oil and the super rich. Why would they do this? Remember republicans NEVER want government to be beneficial to ordinary Americans. So if government programs prove benefical that's a problem for republicans because it goes against their decades old mantra that government is the problem and it must be reduced or eliminated.

There's much more to their tricks and games but you get the picture.

[dj_chi]

Reagan's top budget guy admitted essentially what you wrote: That trickle-down wasn't so much about pumping money into corporate and military spending as it was about leaving nothing for social spending.

Course, he's also the guy who said the GOP's past decade+ of fiscal stewardship was a failure. So, you know, the GOP once knelt before him but with that comment I expect they'll now say he was a bad man from the start.

[GOP-R--Con-Men]

Correct DJ CHI, plus the republican playbook is exposed to a wider audience the longer they drag out negotiations to fix the financial mess they created.

[bobw101]

quantum_analysis says:

Doubt most of them could with their businesses and money in China or the Caymans. This is the old conservative talking point about corporations paying taxes, so don't you ever get tired of the same talking points?

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Do you own a business? I do and yes if costs go up they are passed on to the consumer. Corporations don't pay taxes they just collect them.

[quantum_analysis]

RBF51 says: This whole mess is about shifting costs to "someone".



The paul ryan GOP budget shifted Medicare costs onto the seniors that could least afford them, to the tune of $6,400 or more per year. Nice job!

[dj_chi]

Mort, your definition of "American" isn't everyone else's. And the "you're on your own cuz I'm only here for me" mentality isn't exactly American.