Douglas meets Obama, makes case for bailout of states

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(Host) After meeting with president elect Barack Obama today, Governor Jim Douglas says he’s optimistic the new administration will help the states with a federal bailout.

But even if Congress approves a package early in 2009, Douglas says Vermont will still need to make sizeable cuts in this year’s budget.

VPRs Bob Kinzel reports:

(Kinzel) Douglas, who serves as the vice chairman of the National Governors Association, was part of a contingent of governors who met with president elect Obama in Philadelphia.

Vermont is one of roughly 40 states that are currently experiencing significant budget problems and Douglas says the governors are seeking federal assistance in two areas; a massive transportation infrastructure plan and substantial subsidies for the Medicaid program.

Douglas says Obama seems to understand the financial problems facing many of the states:

(Douglas) "This meeting was about establishing a relationship as much as it was discussing the specifics of an economic recovery plan we want to be sure that the new president and his team think about the states think about the governors consult us and involve us in decisions about important matters to public policy so I think we’re off to a good start."

But Douglas says any federal bail out plan for the states won’t affect the need for his Administration and Legislative leaders to agree on a package of roughly 64 million dollars in cuts in this year’s budget:

(Douglas) "We have about a 37 million dollar shortfall this fiscal year to deal with in the General Fund but we also have 27 million dollars of additional pressures for new spending so we’re going to continue to have a significant problem that will require adjustment of our state budget regardless of how much the federal government comes through."

And Douglas says it’s wrong for states to expect that the federal government is going to write them a blank check to erase all their financial problems:

(Douglas) "We can’t expect the federal government to do all the heavy lifting we have to make the tough decisions we have to make some choices and exercise budgetary restraint so I don’t expect the federal government to come through with all the resources that states need we’re going to do our part too."

Douglas says he’s hopeful that a preliminary list of budget cuts can be drafted by the middle of next week.

For VPR News I’m Bob Kinzel in Montpelier.

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