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Governors In G.O.P. Urge Stand On Budget

November 20, 1995Posted in News

New York Times

Published: November 20, 1995

Twenty-one of the nation’s 30 Republican governors today urged the Republican-run Congress to insist on balancing the Federal budget in seven years, advising Speaker Newt Gingrich and Senator Bob Dole, the majority leader, not to blink in their showdown with President Clinton over the future direction of American Government.

In letters addressed to Mr. Gingrich and Mr. Dole, the members of the Republican Governors Association meeting here said that “the Republican-controlled Congress must stand firm, balance the budget and avoid the impending disaster that larger and larger deficit spending portends.”

Even though the states will take big losses if the Federal Government cuts hundreds of billions of dollars from Medicaid and welfare, Gov. George V. Voinovich of Ohio said at a news conference, the Federal budget has to be balanced in seven years.

“The Republican Party is not mean-spirited,” he said. “The Republican Party believes in tough love. And we understand that if we don’t do something about reducing the deficit, we aren’t going to have anything for the poor, the children or anyone else in this country.”

The governors said they remained what they declared themselves to be at their last annual conference in Williamburg, Va.: disciples of a devolution of power to the states. Neither the impact of the cuts nor the prospect of greater demands on the social safety net in a future recession would dissaude them, they said.

Governor Voinovich said that the Republican-run Congress’s drive to replace entitlement programs with block grants for Medicare, welfare, Medicaid and other programs would give governors the flexibility they need to “work harder, smarter and do more with less on the local level.”

“What we need to do is convince a lot of people out there who are concerned about what we’re doing, to take, I’d like to refer to it as a leap of faith, ” he said. “The Federal Government has had these problems for years. They failed. They’re bankrupt. We’re saying we’ve got to change the paradigm, return the power back to the states. Give us the authority to solve the problems on the local level. And we’re going to have a better America.”

Earlier in the day at a brunch for governors and their guests, every governor interviewed said that balancing the Federal budget in seven years was the center of their concerns. And any plan to do so, they said, should be based on real economic assumptions and give states flexibility.

Gov. Jim Edgar of Illinois said that if the budget balancing took longer, the elected officials who put it in place would probably not be around to enforce it.

Gov. John Engler of Michigan, the vice chairman of the group, said that balancing the budget by 2002, could lower interest rates on mortgages and consumer loans by as much as 2 percentage points.

In response to a question about a plan by conservative House Democrats that would balance the budget in seven years but without $245 billion in tax cuts proposed by the Republicans, Governor Engler declined to comment in detail, but said there is “a middle ground” and that “there are outlines of a compromise out there.”

If President Clinton commits himself to a seven-year plan, Governor Engler said, some proposed tax cuts could be scaled back. But, he said, the Congressional Republican plan to cut the capital gains tax will not be negotiable.

Outside the brunch, Governor Voinovich said his state did not get everything it wanted from the Republicans on Capitol Hill. But he said that his welfare and Medicaid experts had concluded that Ohio could handle the transition from entitlements to block grants.

Governor Edgar said he, too, would like to be getting more money in the Congressional Republicans’ plans but, he said, “if you want to balance the budget, that means you have to give some things up.”

New Mexico’s governor, Gary Johnson, said he was willing to take proportional cuts in a wide range of programs because balancing the budget would eventually put hundreds of billions of dollars in the hands of entrepreneurs. “I look at that as an exciting prospect,” he said.

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