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Governors association, NLC call for 'Strategic Investment, Tough Choices' for federal budget.

NLC President Don Fraser and Second Vice President Carolyn Long Banks, joined some 13 governors, other state and local leaders, and top executives from three national business organizations in applauding Colorado Governor Roy Romer, the Chairman of the National Governors' Association (NGA), last week for leading the way to agreement on a national strategy to eliminate the federal deficit over the next eight years.

The agreement parallels the economic recovery priorities adopted by NLC delegates at the Congress of Cities in New Orleans last month and came less than two weeks before the nation's governors are scheduled to meet with President Clinton and the Congressional leadership to present the health care and national deficit reduction plans adopted over the course of four statelocal-private sector summits in the last three months.

The agreement, "Strategic Investment: Tough Choices for 'America's Future," calls for cuts in federal defense, foreign aid, and entitlement spending. It calls for a new approach to address the issues of strategic investment and improved accountability and efficiency in government programs. And it calls for federal revenue increases of $1 dollar for every $2.75 in spending cuts--the same proportion recommended by Senators Sam Nunn (D-Ga) and Pete Domenici (R-N.M.) in their report last fall for the Strengthening of America Commission.

If the recommendations adopted at the national meeting on the summit are not enough to balance the federal budget, the group adopted a further proposal by NGA Vice Chair Carroll Campbell, the governor of South Carolina, to impose automatic across4heboard cuts in the indexing of both cost-of-living increases in federal spending programs and equivalent reductions in the indexing of federal income taxes.

The participants also adopted an amendment proposed by Art Hamilton, president of the National Conference of S(ate Legislatures and Arizona House Minority Leader, to prohibit the federal government from passing on any of its savings to state and local governments in the form of new unfunded mandates or preemptions.

While the process focused on tough choices and shared sacrifice critical to eliminating the federal deficit, it incorporated NLC concerns on strategic investment:

"While we recognize that private capital formation is the major source of productivity change, sufficient public investment must parallel the private investment. Specifically, the share of the federal budget devoted to infrastructure, education, training, and research and development must be increased."

Fraser praised NLC First Vice President Sharpe James for his success in convincing the participants of the importance of public investment:

"While we all share deep concern about huge federal deficits, we understand that changing the way we do business in this country is essential to our local economies. Projections about the acceleration of the federal deficit have come not just from increased health care costs, but also from sharply reduced revenue estimates. Therefore, we must focus equal attention to a partnership with the federal government to make those choices essential to providing meaningful job opportunities in each of our cities.

"Mayor James successfully prevailed with our views during the December meeting. 1 am pleased they were incorporated in our final document and now send a message of investment over consumption as the key to our economic future."

NGA Summits

Last summer, NGA offered to host a three part series to present a consensus publicprivate agenda to the next administration and leadership of the 103rd Congress on federalism. health care, and deficit reduction. Romer invited three representatives of the corporate sector to each of the summits. In addition to NLC, he invited two principals from each of the following organizations to this meeting: the Council of State Governments, National Conference of State Legislatures, National Association of Counties, U.S. Conference of Mayors, and. the International City Management Association.

The invitation and summit meetings were the first held by state and local leaders since 1987.

The first meeting focused on federalism. Mayors Fraser and James represented NLC. That meeting reached consensus on a joint statement, and, thanks to the efforts of NLC's representatives, paved the way to reaching consensus on a strategic human and public infrastructure investment fund with the governors. The second, on December 1, was on health care. The third one, held in Washington, D.C. on December 15th, was to complete the health care discussion and focus on the federal deficit. First Vice President Sharpe James and Second Vice President Carolyn Long Banks represented NLC. That meeting resulted in consensus on health care, but did not reach conclusion on deficit reduction and savings.

At the close of last week's meeting, Romer indicated that NGA intends to take up and act on each of the three summit agreements in preparation for presenting them to the Clinton administration and the Congress.
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Title Annotation:National Governors' Association, National League of Cities
Author:Shafroth, Frank
Publication:Nation's Cities Weekly
Date:Jan 25, 1993
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