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Richardson SOTU Prebuttle

FEBRUARY 2, 2005

SPEAKERS:

GOVERNOR BILL RICHARDSON,
CHAIRMAN, DEMOCRATIC GOVERNORS ASSOCIATION

GOVERNOR JENNIFER GRANHOLM, MICHIGAN

GOVERNOR TOM VILSACK, IOWA

GOVERNOR BRIAN SCHWEITZER, MONTANA

RICHARDSON: Thank you.

The first point I want to make is governors across the country are asking for partnership, and not partisanship, from Washington and the president and the Congress.

The Congress and the administration are continuing to abdicate the responsibility and force the states to pay the bills on education and, principally, health care.

As governors, we know the real challenges we face—that is, creating high-wage jobs, improving education and skyrocketing health- care costs.

Millions of Americans are uninsured, and millions more depend on Medicare and Medicaid for their health care. And the administration’s answer to our health-care challenges is massive deficits and threats of huge cuts in services.

It looks like the administration plan for Medicaid, which is vital for the states, is going to be more block grants and less flexibility and caps that are going to severely impact the states.

We want to send, as governors, a clear signal to Washington to quit passing the buck, quit seeing everything through a partisan window, and join with the states in honoring the long-standing state- federal partnership and work with states, not against us.

It appears that the president’s budget is an attack on the states and not a partnership.

We want to end the gridlock, to set aside partisan politics and work once again for the American people.

On Social Security reform, the governors sent a letter to the president laying out three governing principles: Number one, any reform has to be fiscally responsible by not continuing to explode the budget deficit; number two, that a solution be bipartisan; and number three, that we should not break our promise to our seniors and our young people to cut benefits.

Finally, the administration needs to respond to the governors and to the Congress to work with us on Social Security in a bipartisan manner. So far, the president appears to be rejecting our view in pursuing this effort for private accounts.

On another subject, we have to support our troops and their family, and we must take care of our own.

Governor Schweitzer, who will be on momentarily, and I have taken the lead in providing assistance to our troops.

I will sign today a bill that will make New Mexico the first state in the Union to provide a $250,000 life-insurance policy for every active-duty member of the New Mexico National Guard and Reserve. Twenty-one states are following this lead, especially Governor Schweitzer, and are considering doing the same.

The reason is the inaction, once again, in Washington, the failure to act. Our troops need more than speeches; they need action. And I’m glad to see, once again, the states leading the way, promising that if our young men and women fall, we will take care of their families.

RICHARSON: Right now, the federal death benefit is $12,000. That is disgraceful. We owe our troops so much more, and we’ve been giving them so little. The Congress and the administration should act now to provide real financial support to our troops, and $12,000 death benefit is unacceptable.

So the states, once again, are leading the way. The states are leading when it comes to economic development, education reform, issues relating to health care in partnerships.

And that concludes my statement. And Governor Granholm will talk about health care.

GRANHOLM: Thank you, Governor Richardson.

And in large measure why I asked to be part of this call is really to discuss the prioritization that Washington is placing on matters that are not as critical or as crucial as what we are experiencing out in the states.

For example, you know, the experts are suggesting that Social Security will be solvent for another 40 years, and that there certainly is a long-term issue, but in the immediate, the states are facing a crisis in health care. And it’s on the macro level and on the Medicaid level.

And in our communities in Michigan, it’s clear that this cost-of- health-care issue in today’s economy is really the real crisis, and that’s where, in my opinion, that’s where the priority should be.

There are 45 million Americans who are uninsured. It is not worthy, in my opinion, of America that parents have to auction health care for their children on eBay when a child needs a leukemia treatment. It is not worthy of our values as a nation that glass jars across the country are placed at checkout counters with the pictures of Aunt Mary who needs a vasectomy begging for donations. That is not who we are.

And in Michigan alone, the single most pressing issue for our manufacturers, for the automakers and the larger manufacturers, and the small businesses as well, is the cost of health care. Almost $1,300 in every car that is produced is health-care related.

How can we expect, in a global economy, to be competitive when those issues are so pressing?

GRANHOLM: The administration’s effort to address the drug cost crisis for seniors, just as one example, resulted in this bill whose price tag more than doubled before the bill even went into effect.

And clearly the states are doing a great job in negotiating their purchasing power, using their purchasing power, leveraging the number of prescriptions variable to purchase under Medicaid, to reduce the cost.

The administration, now, is considering making cuts to Medicaid at a time when the states are struggling to pay for the basic health care of our poorest citizens, our seniors, people with disabilities, pregnant women and children.

These are not able-bodied adults. This is the social safety net. This is what we read about in the 25th chapter of Matthew; it’s a biblical value, that we should protect the least of these.

And health care is a basic moral and human value, that we, as Americans, must protect for the most vulnerable of our populations.

So rather than offering relief, it’s our opinion, as governors, that if the administration balances the budget on the back of Medicaid, the administration is going in the wrong direction.

Americans did not vote for less health-care coverage for vulnerable citizens, and they did not vote for sharp cutbacks in medical care for infants and seniors. And they would love to see the administration be a partner in fixing the health-care crisis in this country and enabling our job providers to be globally competitive.

VILSACK: This is Tom Vilsack from Iowa. I want to pick up on what Jennifer said.

You know, the State of the Union address is an opportunity for the president to provide a vision for a more hopeful and inclusive America.

I’m concerned, based upon the reports about the emphasis that the president will place on Social Security reform, that we are essentially creating a dynamic where the future of grandparents is going to be pitted against the future of grandchildren.

And in a hopeful and optimistic America, we shouldn’t have that kind of contest.

I am deeply concerned about the president’s plan relative to Social Security, because it appears destined to create additional debt, additional borrowing, which will make it more difficult for the next generation of Americans to secure economic opportunity.

I am concerned that the president has suggested, in order to maintain a fiscally responsible budget, that discretionary spending, which would include commitments to education, will be status quo or reduced.

This is reflected in the administration’s reduction of Pell Grants, which is going to make it even more difficult for the next generation to secure a college education.

It is very clear, from everything that you read and everything that you see concerning statistics, that earning capacity increases. The more you learn, the more you earn.

And this administration is making it more difficult for people, not easier for people, to get that college degree, which is the key to a better and more hopeful future.

In addition, governors work every day to try to improve our K-12 system. We know that there’s a tremendous amount of work that has to be done to improve our system. We know that our high schools have to be more rigorous and more relevant.

We want a partnership with the federal government. We want resources that will be assured from the federal government, not taken away, to enable us to expand curriculum, to provide young people with tremendous learning opportunities, regardless of where they live.

We’re also concerned about the continued underfunding of No Child Left Behind and the continued emphasis on single test assessments, as opposed to the kind of partnership that has worked so well in the past, with the state and federal government working together, with a shared vision and shared goals for improvements in education.

And finally, we are deeply concerned—with brain research suggesting that the best and greatest learning and the most extensive learning takes place in the first six years of life, we are concerned about a continued effort on the part of this administration to shortchange the youngest of our children by not adequately supporting Head Start and not ensuring an expansion of those programs so that every child in America has the opportunity at quality preschool, every child in America is served by quality child care, and every parent in America is given the knowledge and the tools and the ability and the opportunity to be their child’s first and best teacher.

VILSACK: The president has an enormous opportunity tonight to bring us together, to provide a more hopeful and bold, optimistic vision of America.

The concern I have is that he’ll use that opportunity to suggest that there is a crisis where a crisis does not exist and ignore opportunities for partnerships where we could make a meaningful difference.

Brian?

SCHWEITZER: Brian Schweitzer in Montana.

I would encourage the president to address the here and now. The here and now in places like Montana are: 20 percent of Montana families who don’t have health insurance; a large percentage of our population can’t afford prescription drugs. That’s a here-and-now health crisis.

On Thursday morning, the president is flying out to Montana and he’s going to be in Great Falls, where he will greet him and invite him to the state of Montana.

It is significant that he is coming to Great Falls, because it was Great Falls in 1999 that the very first group of courageous senior citizens got on a bus and went across the border into Canada to buy medicine.

Now, on that bus I handed a clipboard to every one of those senior citizens, and I asked them to keep track of all the Canadian trucks that are coming down from Canada and what it was that they were carrying. They were carrying logs and hogs and cattle and manufactured goods and food products.

The point is, Congress passed the North American Free Trade Agreement because they told us that that would be good for consumers in America. They said to open that border from Canada to Mexico would allow discerning consumers to choose the best prices for the best products.

Apparently, that was good for everything but prescription drugs. These senior citizens filled their clipboards of these products that were crossing the border, but that same Congress said that medicine couldn’t come back.

Well, it has gotten even more serious. During the last year and a half, those of us who are border states know that Canada has identified a number of cases of BSE—this is mad cow disease.

The border has been closed for a period of time. But according to the rules that this administration apparently is embracing, they are intending to once again open the border for beef to come from Canada.

Our question in Montana, here and now for the president, is: Why open this border to beef that we know is bad and keep the border closed to medicine that we know is good?

That is the here and now, and that’s a question that we have in Montana.

I’m done in Montana.

(LAUGHTER)

QUESTION: My question is that the president is focusing on Social Security, but what about Medicare, which is designed to go broke, apparently, 20 years before Social Security? Why do you think that he’s focusing on Social Security and not on a more immediate crisis of Medicare?

GRANHOLM: Well, let me jump on that.

You know, it’s hard to know what the thought process was, with respect to the prioritization of these issues. But Medicare and Medicaid are critical issues for the states and our populations, and it is curious that the president is focusing on, you know, these private accounts in Social Security at a very significant cost when there is a much more immediate crisis that our states are facing: both Medicare and Medicaid and, of course, the uninsured overall.

The governors all came to Washington in a bipartisan fashion prior to the inauguration. We were in Washington along with 13 other governors on the 19th to start this in-depth process of finding solutions to our national Medicaid mess, of course, because the states are focused on Medicaid.

And we agreed that we would work together in a bipartisan way to, one, fight against the federal government shifting more Medicaid costs to the states and to develop proposals in a bipartisan way to reform the health-care system and find ways to reduce costs, but also to cover people in this, the most wealthy country in the world.

GRANHOLM: So, I think it’s safe to say that it’s difficult for us to guess why this issue of Social Security was put on the list of priorities in a higher place than health care. But those on this call disagree with that prioritization.

QUESTION: Thank you.

QUESTION: I wanted to ask Governor Richardson if the Democrats run a risk, opposing Social Security plans, opposing judges, opposing some of the priorities and, you know, talking down the election in Iraq, whether they run a risk of just being too much opposition and turning off swing voters by opposing things at every turn.

RICHARDSON: My response is that Democratic governors have offered to work with the president on a bipartisan basis on Social Security and Medicaid but we’ve been rebuffed.

So it’s difficult to be constructive when our ideas are dismissed and the president, in his initiatives, tries to roll over our views.

We have not had a response to our letter that Democratic governors sent on Social Security about our three principles: one, that there be a balanced-budget approach on Social Security, that it be bipartisan, and that we not reduce benefits.

So I believe that the Democrats have an opportunity to offer constructive solutions, which we have done in the states, but at the same time, it’s difficult to work with the president when he rebuffs us.

And I know Governor Vilsack has been very involved in the Medicaid discussions with the administration, and I might defer to him, Medicaid being a key state issue for us.

VILSACK: We have been, as Jennifer alluded, in an effort, on a bipartisan basis, to try to come up with an approach.

I think governors, both Republican and Democrat, are very concerned about any effort to further reduce the federal share of health-care costs for people with disabilities, seniors and children.

I think Democratic governors and Republican governors alike believe, again in a bipartisan way, that if governors are given the flexibility and the tools, that we can be more innovative and creative and continue to provide efficient health care, which in turn allows us to avoid having to cut people off of Medicaid rolls.

So we’re committed to working with the administration. We’re open to working with the administration. And hopefully with the recent confirmation of Secretary Leavitt, a former governor, we will have greater success in that effort.

QUESTION: Is there a fear just Democrats generally are opposing too many things on too many fronts?

VILSACK: Well, let me just suggest to you that I think Democrats have suggested and indicated in a number of different areas that they are amenable and recognize the necessity for reform.

First of all, let me say that Democratic governors in particular understand the importance of being fiscally responsible and getting the budget in order. And we have been innovators in each of our respective states in looking for more efficient ways to provide government services.

Secondly, we want to partner with the federal government on transforming and improving education. We don’t necessarily disagree with the president’s goals of not leaving any child behind. But we want that partnership to be a full partnership. We don’t want a series of mandates without the resources to carry out the mission.

And so governors, Democrats, senators, representatives are open to reform. We want to be the party of reform. We are the party of reform. It is Democratic governors that are proposing changes in Medicaid. It is Democratic governors that are proposing a more rigorous and more relevant high-school experience. It’s Democratic governments that are looking for ways to improve early-childhood opportunities. And it’s Democratic governors that are thinking of innovative ways to create job opportunities in this economy. So we’re open to reform.

But, I think, as Governor Richardson opened this call, it really is about partnership and not partisanship. And that’s what we’re hopeful that the president will understand.

But it is a little concerning to all of that the thing that he emphasizes the most in the build-up to the State of the Union address is not partnership, but is a highly partisan idea that doesn’t necessarily have support even among Republicans.

QUESTION: Is that Governor Vilsack? I’m sorry.

VILSACK: Yes, it is.

QUESTION: Thank you, sir.

SCHWEITZER: This is Brian Schweitzer in Montana.

A partnership includes governors across this country that are finding ways of training our young people for the jobs of tomorrow.

No Child Left Behind is something that came from Washington, D.C., but every one of the governors across this country has been working, the last number of years, of creating a more efficient system of rapidly training and retraining people for the jobs of tomorrow.

Now, we’re doing our part. And on the part of the Washington, D.C., folks, they say, “We’re going to cut Pell Grants.” So we are reforming; they are cutting funding.

Let’s talk about what we’ve done to bring cost containment to health care. Every one of the governors has been looking at ways of cutting costs in health care.

Prescription drugs is one of the issues. The opportunities: bringing generics in, importing medicine, and other ways that we’re providing cost containment in health care. And our partner in Washington, D.C., says, “We’re going to cut your Medicaid funding.”

So a partnership means extending hands from both sides. We have the ideas, but you can’t take our funding sources away or we’re not able to implement them.

We’re not against things. We’re where the ideas are starting.

VILSACK: This is Tom Vilsack. I want to add just one other comment about prescription drugs, to give you an example. Governors, as Brian suggested, are in fact trying to be efficient with health care.

In our state, we came up with a preferred drug list in an effort to try to save on prescription drug costs. But because of the action on the federal level in Medicare Part D, we are no longer able to negotiate with pharmaceutical companies for discounts. We’re no longer able to consider pooling with other states.

They’ve taken that tool away from us. And instead of saving $8 million in my state, we’re going to have to spend $5 million more for the same prescription drugs. It just makes no sense at all.

And so, again, back to Bill Richardson’s comment, it’s about partnerships and not partisanship.

SCHWEITZER: Well, let me conclude, too. As governors, what people in America—because we represent them in the states, not in Washington, D.C.—they’re talking about education, they’re talking about health care, they’re talking about the safety of our troops.

They’re not talking about a Social Security crisis or judges. They care about jobs, about health care and education. And there is a huge reality gap with what the president and the Congress are focusing on.

QUESTION: Thank you.

QUESTION: This is a question particularly for Mr. Schweitzer and Mr. Richardson.

Can you talk a little bit about the government, the Bush administration’s energy policy and the Clear Skies legislation, which may preempt states’ rights in the areas of siting power plants, transmission lines?

And also, Governor Richardson, talk a little bit about your efforts to limit opening up of federal lands for natural gas exploration in your state.

SCHWEITZER: Those of us who are in energy states, we know that our ship has come in. We know that it’s important for us to be a good partner with the rest of the states, and this is a great opportunity for America to become more self-reliant.

Some of those resources are going to be our great coal reserves. Some is going to be our natural gas reserves. Some is oil. But other things are such things as ethanol and wind power, solar power.

So we need to have an energy policy that is balanced, that embraces those sustainable forms of energy along with the development of coal and oil and gas.

But the folks across this country agree with some of us governors in the Rocky Mountain West that there are some places that were set aside as early as the time of Teddy Roosevelt that are so special they are a treasure to all the people of this country. These are places where there’s never been a road built. These are places where people from across the world come to visit the last remaining untouched places, the tallest mountains, the cleanest streams.

So we will be partners in developing our energy resources, both sustainable and nonsustainable, but we need to remember that there are some places in New Mexico, in Colorado, in Wyoming and Montana, Idaho and Alaska, that the people have decided are special enough that we ought to leave them for the future, starting back to the legacy of Teddy Roosevelt. And I think that we will continue to protect that legacy.

SCHWEITZER: We understand, as partners to the federal government, that we will be working on transmission law. It’s important that we’re able to site transmission. We will be working on the ability to place our energy-generation facilities.

But the federal government needs to be cognizant of each and every one of our states. We have unique needs and demands in terms of protecting our special places and protecting the environment, both the air and the water.

So we hope not to make some of the mistakes that have been made in the past. We would only ask that the federal government listen to us, because we think that we have some good input for the future of energy development.

RICHARDSON: I totally agree with Governor Schweitzer.

The Bush administration energy policy is drill, drill, drill; more production of fossil fuels, oil and gas, coal. That’s fine, but it has to be accompanied by a commitment to energy efficiency, renewable energy.

Their policy is also, the Bush administration policy—which is hurting them politically in the West because they’re alienating hunters and ranchers and farmers—is to drill in ecologically sensitive areas, like Otero Mesa in New Mexico, with no compromise, no ability to take any state input.

And finally, the administration is trying to roll back clean-air standards, air-quality standards. And states like New Mexico are taking steps to prevent the federal government and the Bush administration from rolling back continued standards on mercury emissions, on new source review, which deals with air quality.

They are an all-out assault on the environment in the West. And what is happening is their political coalition of hunters and ranchers—and I think this is evident, in the enormous support that Governor Schweitzer had from hunters and ranchers and conservationists in his election demonstrates that.

QUESTION: Governor Richardson, there seems to be a little bit of a mixed message. You’re asking them to work with you on Social Security, but at the same time you’re saying that’s not the real problem; the real problem is Medicare and Medicaid and health care and education.

So I guess my question is, which is it?

RICHARDSON: Well, first, I don’t believe we are in crisis in Social Security. I think the president is calling crisis like he does on almost every issue to suit his objective in developing private accounts, which I don’t believe the American people want.

In New Mexico, voters and citizens talk to me about education. They talk about health care, better schools, access to health care. They’re not talking about judges. They’re not talking about a crisis in Social Security.

They want to see Social Security have the kind of viability that it always has had, but nobody’s convinced there’s a crisis. We have a problem, but you work out that problem in a bipartisan fashion, not unilaterally making pronouncements for private accounts that a majority of Americans don’t want to see.

QUESTION: But you also think Medicaid is a more immediate problem?

RICHARDSON: For states, yes. Medicaid is a huge crisis that consumes close to 30 percent of our budget, and there is explosive growth in Medicaid and the federal government.

I’ll let Congressman—Senator—Governor Vilsack answer that better.

I gave you a bunch of titles.

(LAUGHTER)

VILSACK: I appreciate that.

Let me just say that Social Security may be a crisis in the president’s mind, but Medicaid is a crisis for senior citizens, for people with disabilities, for children of families whose incomes are just not sufficient to support health-insurance coverage.

It is a crisis today because states are having to make very serious decisions to reduce and to cut benefits and to cut people out of the program.

And it’s a tremendous drain on the private sector, because when people are cut out of Medicaid, then they seek service through charity. And when they get charity care, it is charged off at the most expensive rate and then ultimately borne by those who are insured privately, because it’s factored into hospital and doctor rates and insurance company rates.

So we’ve got to get a handle on this. And it’s an immediate crisis. It’s not something that could happen 30 or 40 or 50 years from now; it’s happening today. It’s happening in states like Tennessee, that had to cut 135,000 people and reduce benefits. It’s happening right now. And it is, in some cases, a life-and-death crisis.

So clearly, Medicaid ought to be at the top of everyone’s list, because it’s at the top of the citizens’ list. So this is not just about state government or federal government. This is about real people being affected in a real way today.

QUESTION: Any response or reaction to Secretary Leavitt’s comments on Medicaid yesterday?

VILSACK: Bill, do you want me to answer that?

RICHARDSON: Yes, would you, Tom?

VILSACK: Sure.

I’ve had an opportunity to speak with Secretary Leavitt, and I was reassured by the secretary’s comments suggesting that it was not the intention of the administration to propose a cap for mandatory services or mandatory populations.

VILSACK: However, there are a substantial number of people that are impacted by what are referred to as optional services that are, in fact, not optional at all. A prescription drug to someone who is sick is not optional. Nursing-home care to someone who is need of skilled care is not optional.

The secretary, I hope, is open to giving governors the ability to be flexible, the ability to be innovative, the ability to be creative in trying to respond to the health-care needs of our citizens.

I don’t think it advances the cause at all to point the fingers at states that have used the mechanisms available under the rules and regulations to draw down additional resources and to be critical of that. It is simply a recognition that there are health-care needs that state governors are attempting to meet.

And I think Secretary Leavitt’s going to be open to a more creative and more innovative approach to Medicaid, and I am looking forward to that conversation.

However, it would certainly be easier to accomplish if everyone in the administration understood, as I think the secretary does, that Medicaid is today’s crisis, not a 40-year-from-now crisis.

RICHARDSON: I would add, I totally agree with Governor Vilsack.

As a former governor, I was disappointed that it appeared, in some of the comments I saw, that Secretary Leavitt seemed to blame the states for a lot of the Medicaid problems with accounting and other flexibility issues and basically saying that the nonprofits and the health-care providers were also to blame.

It doesn’t make sense to work together if we’re going to blame each other. And my hope is that we have a real partnership. And this is why a task force that Governor Vilsack and the national governors are leading will hopefully bring forward some kind of better understanding and possibly some legislation that we can all live with.

STAFF: All right, I think that concludes our call.

Thank you, everyone.

Thank you, governors.

And thank you, members of the media.

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