NATIONAL GOVERNORS' ASSOCIATION 87TH ANNUAL MEETING ...

•.it" -» e.,'" 't

T

NATIONAL GOVERNORS' ASSOCIATION87TH ANNUAL MEETING

JULY 30, 1995 - AUGUST 1, 1995BURLINGTON, VERMONT

CLOSING PLENARY SESSIONTUESDAY, AUGUST 1, 1995

9:30 A.M.

SHERATON BURLINGTON HOTEL & CONFERENCE CENTER870 WILLISTON ROADBURLINGTON, VERMONT

COURT REPORTER: Lisa M. Hallstrom, RPR, CP

GREEN MOUNTAIN REPORTERSP.O. Box 1311

Montpelier, VT 05601(802) 229-9873

2

INDEXPAGE

SPEAKERS:Howard Dean, M.D., Governor, Vermont, Chair •....•..•• 3

Opening RemarksCornelius D. Hogan, Secretary, Agency of Human ..•.•. 14

Services, VermontLouree Holly, Director, Mothers of simpson ..••.••••. 20

street, WisconsinVicki Wallach, Administrator, Child and Family •...•. 28

Services, HawaiiKhatib A.F. Waheed, Director, Caring Communities .••• 33

Program, MissouriOlivia Thomas, M.D., Community Pediatric and ..•...•• 40

Adolescent Services, OhioConsideration of Proposed Policy ......•.....••.•••.•• 62Christine T. Whitman, Governor, New Jersey •.•..•....• 72

Nominating Committee ReportHoward Dean, M.D., Governor, Vermont, Chair .••.•••.•• 73

Recognition of Departing GovernorsTommy G. Thompson, Governor, Wisconsin .•.....•••.•••• 75

Recognition of Departing ChairTommy G. Thompson, Governor, Wisconsin .••.....•....•• 77

Remarks of the 1995-96 Chairman

3

GOVERNOR DEAN: Good morning. LastDecember we had an extraordinarily interestinggroup of people come to talk to us aboutprograms for children in their communities andin their states, and this year as Chairman I'vbeen traveling around the country looking atdifferent children's programs, and we've gotfour programs to talk about today that aregoing to be, I think, really remarkable. And Ireally wanted all the Governors to have thebenefit of our opportunities, GovernorThompson, myself and other of these Governorswho have come to some of these sessions, tohear what's going on on a national basis forchildren and also to learn about what we cando. A lot of these programs were startedwithout any help from states or anybody else,just plain people getting together and doingwhat needed to be done in their communities,and what we can do as a result of this, Ithink, is to go back and encourage these kindsof programs elsewhere.

There are a few little things I wanted totake care of beforehand. Some of the Governorsthat are involved in those are not here, so I'm

4

going to just start by recognizing someindividuals, and if we have an opportunity,we'll go back. And I want to recognizeGovernor Whitman and some others who have acouple of short remarks they'd like to make.

Before I get into this, I want to start byrecognizing Michael Levine from the carnegieCorporation. Is Michael here? We want tothank you and the Carnegie Corporation,Michael, for your personal involvement, yourextraordinarily generous financial support.This has been successful because of theleadership role that Carnegie and you havetaken, not just in conjunction with the NGA butas national leaders on children's issues.

I want to thank a number of otherfoundations and charitable organizations. TheFoundation for Child Development, the WKKellogg Foundation, the AT&T Foundation,Charles stewart Mott Foundation, the David andLucille Packard Foundation, the Pewd CharitableTrust and the Robert Wood Johnson Foundationfor their incredible suppor-tof -the-campaign.--_ .

I also very much want to thank GovernorThompson, Governor Carnahan and Governor

5

Carlson for their support during the campaignand their participation in all of the campaignactivities. I want to thank Governor Caperton,Governors Engler, Glendening, Governor Hunt,Governor Leavitt, Governor Romer, GovernorRossello, Governor Voinovich and GovernorWhitman for their support and involvement aswell. Their personal participation in thecampaign has been deeply appreciated, and theirinitiatives at home in their home states havealso been deeply appreciative as we've had anopportunity to exchange information and learnabout what we are each doing. And I've come toadmire these Governors and others who havereally made tremendous efforts in their homestates on dealing with the problems of youngchildren.

I ~till don't see Governor Engler here,Governor Whitman, so I'm afraid we're going tohave to just wait till he gets here before wemake a little presentation. The way thecampaign is run is that each Governor has beenasked to identify communities where individualsare working together to improve the well-beingof children and their families. Several of

6

these initiatives were featured during thenational hearing on building communities inDecember of '94. The remaining initiatives arehighlighted in the new report that you have infront of you.

In June of '95 Governor Glendening hostedthe National Summit on Young Children, whichthe President attended, and the summitemphasized the need for states and communitiesto craft new visions and to clearly define thresults that they want for their children. Inaddition to the President, several of mycolleagues and I were joined by representativesof the National Conference of StateLegislatures, the National Association ofcounties, U.S. Conference of Mayors, theInternational City county ManagementAssociation. Secreta~y Shalala and CarolRacicot were also present. And very much likethe new Governors' seminar in Colorado Springsin '92, I found a tremendous amount ofsatisfaction sitting around the table with thelected representativea at oth~r levels, thecounties, the mayors. Those folks have a lotto say to us, and one of the things that I hope

7

will continue in this organization is a closerworking relationship with the mayors, thecounty officials and so forth. They executemany of the programs, they share theresponsibility for many of the programs that wehave, and we need to continue to coordinatewith them to the best of our ability.

Families have the primary responsibilityfor their children. The majority of familieswant to do what's best for their children.Many parents, for whatever reason, are unableto provide the physical and emotional supportthat young children need to become happy,caring and productive adults. We have learned,and certainly John Engler as the father of sixmonth old triplets has learned, that sometimesfamilies need help. states and communitiesneed to create new partnerships wit.hbusinessleaders, religious leaders and parents so thatwe can create better support systems. InVermont, for example, we've started a programthat will provide an offer to visit all parentswith newborns right at-the time of birth andshortly thereafter to determine whether theyneed help and let them know about available

8

services. We now cover 50 percent of thechildren born in this state with that service,and only 12 percent of those to whom we offer ahome visit turn us down. I thought that was aterrific program until I went to Hawaii lastJune to talk about children's issues and foundout that they have a program, which we're goingto hear about today, which covers nearly 100percent of children.

The second lesson we've learned this yearis that communities are in the best position tosupport families. There are hundreds ofcommunities that are already doing this, manywith the encouragement and support of theirstates, and we've heard from some of those andwe're going to hear from some of those tOday.But these communities are not numerous enoughto significantly improve the well-being of allyoung American children. As Governors we haveto do more to identify communities that arewilling to try something new, to take risks, tomake investments, and then we need to supportthem. We can listen to them. We can provideassistance as they have, for example, inMissouri, and you're going to hear about some

'.

9

of that today, and this does requireeliminating bureaucratic rules and regulationsand giving communities permission to experimentand make mistakes to ensure that families canget the help that they need. In my state we'rein the process of pooling federal and statefunds to create block grants to communities tomake it easier for them to combine education,health and social service programs such aschild care. We want them to implement localplans that will support children and familiesmore effectively.

The third lesson that I've learned thisyear is that investing in children is a dollarsand cents proposition. The early years arewhen children learn how to trust and they learnhow to love. That is when they learn how toget along with others. For children who are in

trouble, the most effective time from afinancial point of view to provide support andprevent more difficult problems is when theyare young. Young children who are loved andcared for do noe-need t;o-be-taken-out--o-f---thei-r---home and put in foster care, they are lesslikely to end up in special education, and they

10

are less likely to end up in programs forseverely emotionally disturbed kids and whenthey become older they are far less likely toend up in prison.

In Vermont we've invested dollars inchildren's programs from birth to age six overthe last four years. In the last two yearsrates for child physical and sexual abuse havedropped 25 percent in this age group alone inthe state of Vermont. We have invested alittle more than a Million Dollars over thelast four years while, I might add, we werelevel funding our budget because of our ownfiscal problems, and our sexual and physicalabuse rate has dropped 25 percent.

Even if we don't need to make moralstatements about the good things that arepossible and we ought to do for young children,anybody here, and that includes all 50 of us,who cares about their budget understands thatthis is a way to save money if not childrenthemselves. This is a way to save moneybecause foster care, special education andprisons are far more expensive than home visitsand social support for children at an early age

•

11

whose parents lack proper parenting skills andphysical ability to give good care.

It is going to take a national effort toaccomplish this goal for all children, but Ithink that we have to be sure that we learn thelessons that we've learned this year which isthat the national effort must respect andsupport family and community efforts becausethat's where it all starts and that's where itis going to be successful.

The brochure that you have in front of youoffers suggestions for how we can transformgovernment to better support families in caringfor their children. I urge ,you to read it, acton it and share it with your colleagues. Bymaking children our first priority and workingtogether, we can create an environment wherechildren are loved and cared for, where theyare safe and healthy and where there can be asense of hope for the future.

A picture is worth a thousand words, andthe video we're about to see is worth a lotmore than a thousand words. This provides agraphic illustration of the status of youngchildren and what states and communities are

12

doing to improve the status. Can we dim thelights please and show the video?

(Video played)GOVERNOR DEAN: I would say that was

pretty remarkable. I hadn't seen that before,and I really appreciate all of the people whoworked so hard to put that together. Copies ofthat are going to be, I've just found out, madeavailable to all Governors who want to use it,and I dare say there's no copyright, so copy itas many times as you'd like. Thank you to thNGA staff that worked so hard to get that don ,the Carnegie Corporation, all the other folksthat put that together.

We have some of the folks here today whowere featured on the video and others who someof us have heard over the year whose wisdom weought to share with all the Gover~ors. I'mvery pleased that we have representatives fromfour such initiatives tOday. Khatib Waheed isthe director of Caring Communities Program inSt. Louis, Missouri. This initiative is astatewide school-based effort to ensure thatchildren stay and succeed in school and thatthey remain in their families and stay out of

13

foster care and the juvenile justice system.Vicki Wallach is an administrator with the

Child and Family Services on Oahu in Hawaii.Her agency runs Healthy start, which I talk dabout briefly before, to identify troubledfamilies from the time a child is born andprovide assistance to those for up to fiveyears. I had the pleasure of learning abouther program earlier, and we are beginning nowto import some of the aspects of that programhere in Vermont.

Dr. Olivia Thomas, who you saw featured onthe film -- she asked me why she was here, andnow I know because I hadn't seen the filmbefore -- from Columbus, Ohio, is apediatrician in the Community and PediatricAdolescent Services in Columbus and has been aleader in Governor voinovich's Family andChildren First initiative.

Louree Holly is the director of Mothers ofsimpson Street from Madison, Wisconsin. Thisis a program we also heard about in Decemberwhich we thought was so impressive that_weought to ask her back and explain what she doesas a community organizer mobilizing her

•

14

community in Madison, Wisconsin.Throughout the campaign we have focused

attention on how to better support youngchildren and their families, and I've askedthese individuals to offer their advice aboutwhat Governors can do to replicate communityinitiatives such as theirs. Their commentswill be followed by a roundtable discussion.

I want to welcome again Con Hogan,Vermont's Secretary of Human Services and thewinner of the NGA's Distinguished Service Awardin state government. Con is the reason thatVermont has been cited as one of the beststates in the country in which to raise achild. And I have asked him to chair thepanel, provide a few brief remarks about whathe's learned from his experiences working inVermont. And, Con, thank you for joining us,and let me turn this now over to you and yourfellow panelists.

MR. HOGAN: Governor, thank you.Governors, welcome. Across the country thereis a healthy ferment--t;aking-place ascommunities come alive to the challenge oftaking on more responsibility and more resource

15

authority for the overall health and welfare offamilies of children.

This awakening is being fueled by therapidly changing relationship between thefederal government and the states. It's alsobeing energized by the knowledge that the daysof having ever increasing resources to do thejob are gone and by the realization that anessential part of re-inventing government isfinding better ways of getting better resultsfor our people at less costs.

For decades both the responsibility andthe resource authority for promoting healthycommunities and good outcomes for children andfamilies have been by and large the preserve ofthe federal and state governments and decidedlynot in the hands of our communities. We havfin81ly come to realize that it is throughsharing work with communities that we are mostlikely to achieve the results we all want.That's a big change, and it presents realchallenges both to the states and ourcommunities.

Each of our panelists will address in fiveminutes or less some of the important things we

16

need to do. The first thing has to do with theimpact of your leadership. When Governorslead, people listen, people speak out andthings happen. The NGA vision which says thatall of our lives are enriched and improved whenwe can build stronger families, healthierchildren and more effective communities is k y.

The second thing to do is to work withpeople to agree on the results we want to workfor, whether it's the Oregon BenchmarkingProject, or Minnesota's Milestones, or Iowa'sPeople Priorities, Missouri's Directives forChange, North Carolina's smart start orVermont's Core outcomes Project, we're seeingmajor attention paid at all levels ofgovernments to clearer and more trackableoutcomes.

In short, we need to know and share wherewe have been and where we are today so that wcan map out the results we want for tomorrow.And equally as important, we need to organizethis information at very local levels. InVermont the peoplein-every school--district------catchment area are now learning how theirfamilies and children are doing regarding many

17

key outcomes, be they teen pregnancy rates,immunizations, child abuse or children's healthindicators. This is a mirror which communitiesare using to look themselves in the eye andthen organize to take action. In the words ofa former boss of mine, "In God we trust, allothers need data."

Another thing to do is work with newpartners, including our schools, to serveneighborhoods and communities in new ways andwith new players with the families and childrenthemselves at the center. These partners willnot only help us do better what we already dobut will stretch us to do things that up tothis point have been beyond us. And we must doprevention in a much bigger way. As GovernorDean just said, in Vermont we are seeing astunning 25 percent reduction in substa~tiatedchild abuse victims over the last two years andthe third-year report will show even largerreductions. We directly attribute theseresults to a changing climate where prevention,education and aggressive prosecution ar~e .. _emphasized at both the state and local level.A web of efforts, including healthy babies,

18

hom~ visits, early intervention services,Success by Six, school transition efforts,family preservation work all done by many goodpeople working together at the local level ispaying off.

Another important aspect of this thinkingis the recognition that we need to invest inthe strengths of our people and socialinstitutions in our communities and that weneed to move away from the destructive andoften self-fulfilling thinking which identifiesan endless litany of needs which can never befulfilled rather than recognizing thatchildren, families and communities all havestrengths on which to build.

We also need to consider some veryimportant relationships that we're justbeginning to understand better. For example,low-income children who live in affordablehousing are significantly better nourished thanchildren who don't. Tenth grade reading scorescorrelate more closely with median familyincome than with anything else. And-working_parents not only have higher educationalexpectations for their children, but they also

19

have children who perform better in school. Wealso know that children need consistentrelationships with adults and that elders needmore valued roles. We need to have moreintergenerational relationships which are,simply put, reciprocal and mutually beneficial.

What are the challenges to stategovernment in these changing times? Makeagreements with communities about the outcomeswe all want as a foundation for change, and ourexperience in vermont says that that will gowell. Why? Because we all want the same bestoutcomes for our children and families. Tieour finance systems and government structuresmore closely to the results we all want so wbegin to have more accountability which,frankly, has been lost greatly over the lastqeveral decades. Help communities developtheir own capacity to govern at these newlevels of responsibility and authority, andredevelop our information systems to supportmore communication on local decision making.And this one speaks to a very serious problemi--namely, the general lack of support forinformation technology development across many

20

levels of government. This is importantbecause by and large government is information.People in this area, as Lou Gerstner told us,we are lagging badly. These things to do, andmore, will be expressed to one degree oranother by the seasoned and innovative peoplefrom which we have much to learn. And withthat I'd like to ask Louree Holly of theMothers of Simpson Street to share some of herkey thinking with us.

MS. HOLLY: Good morning. First I'd liketo say thank you to particularly the Governorfrom the State of Wisconsin for having me herbecause I'm representing a group of socially,economically disadvantaged people but proud andintelligent community grass-root people who armaking remarkable differences and changes intheir communiries by empowering themselves.And for too long we have not been able to havea voice, so this has given us an opportunity tohave a voice to say exactly what needs to besaid, and for that I'm grateful.

For too long our communities have been runby systems. We've had systematic control inthe communities, and that has been not a plus

21

for us. We are a group of people who want tomake changes in our community who want toempower ourselves and to let things happen theway we see and feel that they should happen sothat we can help our children. We need to bethe ones to make the differences in the liv sof our children. We cannot make differences inthe lives of our children if we are going to becontinually controlled by the systems becausethe systems do not know what it is that wewant. This is another form of the plantationmentality when you have the systems coming infrom the outside and dominating and taking overour community telling us what it is that weneed and telling us how to fix it. We don'tneed the systems to do that any longer, and thecommunities of grass-root people are beginningto rise up and say that. Wa want to takecontrol. We are empowered people. We want totake control of our community. And if thesystem people are going to come in, they shouldcome in on a very low key, very low-key leveland listen to our needs and assist us as werequire their assistance, not to come in anddominate the community; otherwise, we will not

22

be able to make any difference in helping ourchildren.

We also know that we have a voice. Ourvoice should be heard. The systems may come inand see us as being someone who needs to have ahole in the wall where you may call a school sothat we can receive a GED in our community.Well, we may want to go outside of theneighborhood and go to the university and sitright next to you and receive a Ph.D. AGEDmay not be our goal. We are not impressed wh nyou come into our neighborhood and tell us thatyou're doing us a favor by taking us to thefood pantries. We may want to open aneighborhood grocery store and have our ownfood pantries. We may not be impressed withyou giving us free bus tickets and telling usyou're helping us to get across town to ·hedoctor. We may want to be the doctor, and wemay want to drive the bus. We may not beimpressed with you coming into our communitiestelling us how to discipline and raise ourchildren. We may know how to do thatourselves, and we do know how to do thatourselves. And we would not be able to make

23

any difference in our community unless thesystem people move out.

And I've been in community organizationsand organizing for 25 years, and for 25 years Ihave seen systems take over, and for 25 years Ihave seen the same results; nothing haschanged. The definition of insanity is tocontinue to do the same things over and overagain and to expect different results, andthat's what's happening. We're continuing todo the same things over and over again andwe're expecting different results. The onlything that's going to make a difference is ifyou give the community back their voices.

The second thing that I want to point outis that we need to promote success in ourchildren rather than failure. I've seen fartoo many times where the government is givingfunding to kids who are in the system, givingfunding. And I am all for intervention andprevention, but I'm also for promoting our kidswho are successful. In the schools I've seenthe kids who are acting u~ and disruptive bethe kids that get the front seats in theclassroom. They're the kids that get the

•24

•

breaks, they're the kids that get two hoursout, they're the kids that get someone to comin and do work which is supposed to be angermanagement workshops which turns out to be themwatching a movie and going to a theatre havingpizza parties, and this is to deter them fromdoing disruptive things. Then you have the3.0, 4.0 students who are doing well who canactually afford to take two hours out of a weekwhen the disruptive kids can't even afford totake two hours out of a week to do nothing butstudy. We have the 3.5, 4.0 students who canactually afford and deserve to go on the fieldstrips; they can't go because the money isdesigned for system kids.

We put too much emphasis, and focus andhighlight on kids who are not doing well, andwp.'re not doing what we need to do for the kidswho are doing well. That's why the agency thatI'm with, we have a special program that honorsand recognizes kids with 3.5 grade averages andabove. We want you to know that in ourcommunity we have far more kids that are doing "_well in school than that are doing bad, but thefocus has always been on the bad kids.

25

Now, one of the things that the Governorscan do and what we have found that has workedthat's really remarkable in our community isthey can get directly involved with thecommunities. Get directly involved. Make itpersonal. We have been able to calIon theGovernor's office to give proclamations tothese students that are making 3.0, and thenthe disruptive students can look at this andsay, "Woah, the Governor says you're a greatstudent. I've got a proclamation from theGovernor." Then that means that they're goingto have to do something different to get that.They have to know that they can't get rewardedfor doing disruptive things. That makes thekids who are doing well look and see that,"Well, if I'm doing well and not gettingrewarded, I might as well have a fight." Andat the end of the school year we have begun tosee things like that happening. The 3.5 kidswere beginning to get into trouble, in fights,things that they have never done before just sothat they can--get attention. --We need to turnthat around. The attention needs to be focusedon the kids that deserve to get the attention,

26

and that's the success for students.(Applause)Thank you. One of the last things that I

want to recommend, when I was at the airport Icalled to get the blessings of the Mothers ofSimpson street and to say good-bye. The lastthing that they told me, "Well, you make surethat you tell those Governors we want controlof our children back." We want to be able todiscipline our children the way we see fit. Weare tired of people, let's say, coming into ourneighborhood telling us how to raise ourchildren. They're telling us how to parent ourchildren. We are the experts at parentingchildren. We parented children 400 years ago.That's all we've done is parent children, youknow? We are the experts on parentingchildren. So, now how can yoc tell us how toparent children? When our parents disciplin dus, there was no such thing, I'd never heard oftalking about guns. Guns? I mean, we neverheard of talking about guns. We never heard ofgirls getting pregnant. When a teenager gotpregnant when I was coming up, it was a socialoutcast. It was a disgrace, and everybody knew

•

27

about it. I mean, the parent could not walkaround and hold their head up. Now, it's a wayof life because we don't have control of ourchildren. We cannot discipline our childrenthe way we see fit. Social Services comes intoour neighborhood, gives our kid a card in frontof us, right in our presence and says, "If yourparents touch you, to give us a call." Thenthe kid, as soon as the person walks out,started doing all kinds of disruptive thingsand says, "If you touch me, you'll go to jail."And we are sick of that kind of mentality. Wneed to do something different.

As I said, the first thing, the mostimportant thing that I have to offer to youtoday is to give the voices back to the people.Exactly what's happening right here right nowtoday is to give the community grass-rootpeople whose lives are being affected, givethem a voice. Let them tell you what they wantto happen in their community and how they wantto fix it, and they ask you for the resources.And you give them resources as they ask for it,not as you demand and not what you want tohappen to them but what they want.

•

28

And the second one is to fund success, topromote success in our children and stoppromoting failure. The third is to give theparents the right to discipline and take chargeof the lives of their children. Thank you.

(Applause)MR. HOGAN: Thank you, Louree. Now, we'd

like to ask vicki Wallach who was an RN withthe Prevention Service Administration inHawaii. This is a state that we've watchedvery carefully and learned a lot from.

MS. WALLACH: Governor Dean and members ofthe National Governors' Association, thank youfor allowing me to participate in this meeting.As you consider social policy options tostrengthen families, I would like to recommendthat you regard family support programs as acentral building block in a human servicesystem. In particular, those programs that arpreventive, comprehensive and have demonstratedeffectiveness seem to best respond to the needsof overburdened families. These programs beginto address what Governor Cuomo-referredtoas---the quiet catastrophes across our country;those difficult life circumstances that stifle

29

the lives of millions of citizens each day andundermine our future.

Community based service initiatives serveto meet two important goals for familiesresiding in poverty. First, to buffer theeffects of economic hardship by strengtheningthe family's ability to cope with the harshrealities of their daily lives and, second, tofocus on the enhancement of a positiveparent/child relationship despite numerousobstacles to attentive parenting. There is anemerging belief that prevention programs canrender significant economic and social payoffs.The u.s. House Select Committee on Children,Youth and Families in an analysis of data overthe last 25 years did conclude that preventionpays. This report cites economic returns of $6for ~very $1 invested in the reduced costs ofremedial education, Welfare, crime and socialservices. Thus, there are expected returns onhuman capital investments, but like allinvestments and growth, most of the dividendscome later. A generation may need to elapsebefore the full value of the payoff isrealized.

30

Home visitation is increasingly regardedas the core component of family supportprograms as it has been shown to not onlyimprove child health but to alter the mother'slife course. For these reasons, thisinterventive strategy has been used since theturn of the century. It may be interesting foryou to note that Mary Richman in 1899 publishedthe first manual on home visitation called,"Friendly Visiting Among the Poor," and thistext is considered to be a classic in the fieldand still utilized tOday. Significant socialoutcomes, such as a reduction in child abuserates, increased maternal emplOYment, areduction in unintended subsequent pregnanciesand enhanced child development are associatedwith home visitation programs.

Hawaii's homp visitation model calledHealthy Start serves families whose exceptionalcircumstances place them at risk for childabuse and neglect. The impact of this programhas been impressive. For 2,254 families whoreceived services --frolllJuly--1--987-toJuly 19911-_~ _~__

in 99 percent of the target children abuse wasnot confirmed. In addition, 90 percent of two

•

31

year olds were fully immunized, 90 percent ofthe children had an identified medical providerand 85 percent of the children weredevelopmentally on target.

In this time of growing social demandswith fewer resources, Hawaii's Governor hasmade a substantial commitment to preventionprograms by allocating $6 Million to Healthystart for the next year.

It is clear that time limited familysupport programs can have long-term impact onfamily well-being if they are carefullydesigned and implemented to maximize familygains. Liz Schorr in her book, "Within OurReach: Breaking the Cycle of Disadvantage,"summarizes a list of program components thatare prone to make a difference in the lives offamilies. First, offer a broa~ spectrum ofservices. Programs with multiple goals aregenerally more effective than single-focusedprograms. Most importantly, home visitingneeds to be seen as part of a comprehensivearray of program components to include jobtraining, adult education, child care andtransportation.

32

Second, view the child in the context ofthe family and the family in the context of thcommunity. Programs must be attentive to theeconomic, ethnic and social details offamilies' lives. Families need to be assistedwithin their neighborhoods and the culturalresources that shape their daily existence.

Third, utilize staff who are perceived bythose they serve as people who care about andrespect them. Home visitor Services promotecontinuity and support within a very personalrelationship. Since there is variability inthe way families respond to social services,supportive services, staff learn to customiztheir relationships and service implementation.Staff offer a lifeline to families and mostespecially to those families with extraordinarylife challenges that make them unlikely todemonstrate change with home-based interventionalone. These families often need intensive andcontinuous therapeutic and supportive servicesto promote self-sufficiency.

Fourth and£inally,_ services need to becoherent and user friendly. Home visitorServices view the families they serve as

•

33

partners. Mutually defined goals that aremanageable, achievable and reasonable shape thework with each family. Above all, staffcommunicate an optimism as they attempt tomobilize families to act on their own behalf.

Prevention is a prudent investment;however, ethics must involve the combinedresponsibilities of the public and providersector working collaboratively in the bestinterests of the child and family. Our futureas a nation depends on how well we respond tothe quiet catastrophes among our youngest, mostvulnerable citizens in order to buildcommunities of healthy families. Thank you.

(Applause)MR. HOGAN: Thank you, vicki. Looking

forward to hearing from Khatib Waheed, seven toeight years in st. Louis doing some wonderfulwork.

MR. WAHEEO: Good morning. Good morning.(Good morning)MR. WAHEEO: Wake up out there now. I

know it's been--a--long-three days,-but we'realmost at the end. Let me stqrt, if I may,with the name of God and extending greetings of

34

peace to all of you. I want to thank GovernorDean and all of the Governors for making itpossible for the st. Louis Caring communitiesPrograms to be represented here today.

We've been asked to make recommendationswithin five minutes, and I'm going to try verydesperately to do that. Before I give therecommendations, I want to say very quicklythat Caring Communities in st. Louis started asan initiative from the state. state directors,along with the Governor, decided that businessneeded to be done differently in neighborhoodsserving families who have multiple problems.Their concern centered around the fragmentedservice delivery systems, and we looked at somcost-effective measures, and we found over theyears in Caring Communities that it costrough1y $1,000 a year to serve each student atthe schools where our services are delivered.When we look at that continuum of funding fromkindergarten to grade 12 we're talking roughly$13,000 spent over a 13-year period. And wematched that with the amount that it costs toincarcerate one individual from a family likethe ones we serve, and we find that between

35

$12,000 and $25,000 a year are required toincarcerate one individual. So, we think thatcost-effectiveness is an importantconsideration.

Secondly, we found that the children whoreceive services through our model haveimproved academically by about 200 percent,their behavior has improved by 198 percent andtheir work habits have improved 200 percent.

Thirdly, we've been found to be consideredan intricate part in the reduction of crime inthe neighborhoods. We have been blessed andfortunate enough over the last five yearsthrough our drug marches in collaboration withthe police department to shut down 22 crackhouses by directly marching on the homes wheredrugs are being sold. Therefore, this model ofdelivering services in the school and linkedwith the school makes a lot of sense.for us.It's effective, both cost wise and outcomewise.

We, therefore, would like to make fourprimary recommendations-to the Gover~ors.- -~hefirst is that we would ask that you wouldencourage interagency collaboration among all

•36

of the directors, state directors who areproviding services in the areas of labor,education, mental health, social services,health and others. And up under that aresubsets of that recommendation. We ask thatthis interagency collaboration occur with thefollowing things in mind. First, that theycreate a seamless funding stream; in otherwords, where they pool their resources whenthey're providing services for the samefamilies and are targeting the same populationsand geographic areas. Secondly, as a subset ofthis first recommendation, we ask that theGovernors do this in a way that will enablelocal neighborhoods and communities to developthe design and scope of services to be providedfor their families. Third, we ask thattechnical assistance be provided ~o the localneighborhoods to ensure success on theneighborhood level. Fourth, we ask that therebe encouragement to deliver services in waysthat not only focus on children but that focuson families and focus on neighborhoods as well.We find that focusing simply on children is notenough. We also find that focusing on childr n

37

and families falls short of the mark,particularly when those families are inneighborhoods of high environmental risk.Fourth recommendation as a subset forRecommendation Number 1 is that there be anallowance to share information between theproviders, particularly when they're servingthe same family. Confidentiality has becomethe 11th Commandment issued in the last decadethat suggests that people not share informationand that they not collaborate, and so we needto have encouragement from the Governors inways that will enable us to provide and sharethat information on as-needs-to-know basis.Fifth, we ask that as a subset that the processof developing outcomes and performance measuresoccur on the top down as well as a bottom upapproach; that recommendation strictly from thpstate regarding performance measures are oftennot targeted in ways that are achievable whenthe input of the local communities are notconsidered.

The second overall-recommendation that I_would like to offer to the Governors for yourconsideration is that you encourage the

38

development and implementation of preventiveand early intervention services which are bothcomprehensive and which constitute a continuumof care for the zero to five population as wellas school-aged population. We find often thatthe pendulum swings one way or the other. Weither put all of our resources into the zeroto five population with no support for thechildren once they enter school or we focus onthe children once they enter school with nointerventions before they enter school. So,we're asking that there be a balance inproviding the continuum of care for bothpopulations.

The third recommendation is that yousanction,or give support to risk taking when itis reasonable. It is important that werecognize that to develop interventions andtake innovative approaches often requirestaking risks. Therefore, we suggest that thestate directors and local communities be givensome latitude in developing the kinds ofprograms that they need without fear of fundingbeing removed in a short period of time.

Then the last recommendation centers

39

around the whole question of Welfare reform.We're asking that as you begin to put theWelfare reform packages together in yourrespective states, that you consider ensuringthat parents who are transitioning from Welfareto work have access, continued access to thekind of support services that would ensure thattheir state and the work force will besuccessful. I'm talking about the kind ofservices that enable the children and familiesto grow to capacity, behavior therapy,substance abuse case management andco-dependency counseling, school aged childcare, after-school tutoring, case managementservices and the like. These are services thatwill be needed by the families before theyenter the work force and they will be neededsubseqnent.Ly , So, to have in addition to thatjob coaches and job readiness training forthese families, for the parents of thesefamilies who are foreign to the work force willbe very critical if we expect this new reformmovement to be .succeearu L _I~_want to _thankyou.

(Applause)

•40

MR. HOGAN: And, finally, our lastpanelist is Olivia Thomas. She is a physician,a pediatrician and has had many, many years ofexperience in Ohio.

MS. THOMAS: Governors, good morning. I'mmost appreciative of the opportunity to speakwith you this morning. Families and childrenneed to be able to access quality andcomprehensive health care in the communitieswhere they live. Our program has five and soonto be seven clinics in low-income areas inColumbus. Families also need access to otherservices like WIC, Head Start and safe andreliable child care. Parents need to be a partof the planning for all of these services.

Initiatives like the Family and ChildrenFirst Initiative that Governor Voinovichsponsors in Ohio are needed throughout thecountry to really help a family access whatev rservices that they need. Also in Ohio we havea program called Help Me Grow. That's aprogram that encourages women to enter prenatalcare early in their-pregnancy-and thenencourages them to take their children then infor their comprehensive health care visits

41

after the babies are born. All state agenciesneed to be involved to work together so thatthey make this process easier then for thefamilies.

Over the past years Title 5 and the MCHblock grant have made available vital andcost-effective care for pregnant women andchildren and children with special health careneeds. The use of the MCH block grant dollarsis very flexible depending upon the needs ofthe community. It's provided funding forstartup costs for clinics, it funds casemanagement, transportation, outreach workers,home visiting, health education, reallywhatever a community deems needs are necessaryfor those families, we can use those monies forthat purpose.

In Ohio women and children ha~-e beencovered up to 250 percent of the federalpoverty level and you can compare this with the133 percent Medicaid level. If the MCH blockgrant to states is cut 50 percent as is beingproposed, many programs like mine may have todrastically reduce services for families. Andmany of the benefits that have been gained over

NOw, what can the Governors do to supportcommunity initiatives? First, you can supportholding MCH block grant dollars to the stat sat the present leve1 rather than the 50 percentreduction, and this would help guarantee accessto care. Second, you can be a part of therestructuring of Medicaid and support fundingof preventive activities that ultimately reducecosts. Third-r you -can enGOU:r;aqe-yoU:I!~st-ates--to - --, -- .'place a priority on funding for low incomepregnant women and children. And, last, you

42

the years may be reduced, like women enteringprenatal care early in their pregnancy duringthe first trimester and the reduction in theinfant mortality rate.

Medicaid has been a safety net for manyworking parents. Medicaid has provided fundingfor the EPSDT exams which have helped providersidentify problems early that children may haveand refer the children then for treatment. Allthis, however, is threatened with the federalrestructuring of Medicaid. A minimum level ofMedicaid eligibility is needed for children toassure that they receive medically necessarycare.

43

can encourage communities to developpublic/private partnerships with government,the health department, businesses, churches andparents.

Again, I thank the National Governors'Association for this opportunity.

(Applause)GOVERNOR DEAN: Thank you very much. Are

there some questions or comments for thepanelists? Governor Carper.

GOVERNOR CARPER: We thank you very much,and as a graduate of Ohio state University, Iwant to just extend a real warm welcome. Iused to think that Delaware was a little townabout 30 miles north of Columbus, and later Ifound out that it was not just a town, it wasan entire state. They needed a treasurer,Congressman and Governor. I got to be all ofthose, and it's nice to see. I was struck bythe comments of our friend who I think was fromst. Louis who shared with us some views on whatfamilies need when they're making thattransition from Welfare to work. Many of ourstates have adopted to Welfare reform plans,family self-sufficiency plans in which we

44

compel people to go to work. We're literallysaying your time on Welfare is limited. We'retime limiting those benefits. We expect you togo to work. We want you to go to work.

You mentioned a couple of the kinds ofservices that are helpful in order to betterensure that that transition is a successfulone. I would just ask each of the panelists ofthe kinds of things that we ought to be doingas a government to enable a person not just tofind a job but to continue to work in that jobor to improve their position, what are thekinds of services that are most important andwhere would you rank services like child careand health care?

MR. HOGAN: Governor, thank you. I'd liketo take a crack at that. As we look at thelandscape right now, the one area that,frankly, frightens us is the lack of supportfor child care in the upcoming budget cycles;that that is the single most piece that is thelargest variable, we believe, in the success offolks being able to stay. at work. --AnEij-in-····_··---.--fact, we in Vermont have been put in theposition where we've just filed rules to reduc

45

our benefits by 6 percent on a contingencybasis in order to set that money aside for whatwe see coming as it relates to child care.That's the kind of decision that our state willbe faced with and many others will too, but wethink that that is just a crucial item thatreally needs to be thought through a littlemore clearly.

GOVERNOR CARPER: Others?MS. THOMAS: I agree with child care being

a significant factor. I think in addition tothat we have to think about transportation.Many of our jobs now are in the suburbs, and alot of folks don't have transportation out tothose areas. I think transportation would beanother issue. And I can't forget about childcare and the health for those children. Manyof our programs are functioning during thedaytime hours and so if these folks have jobs,then they're not able then to take off fromthose jobs often and get the children to thosehealth care facilities during those workinghours. So, we..need. expandecL..workhours__a_lso.for the health care field.

MS. HOLLY: I'd like to take a crack at it

•

46

too. I have to agree with child care andtransportation, but also even before we get tothis point, I feel that what needs to happen isthe system has taught Welfare recipients for solong that they have to be on the Welfare and ifthey're not, if they're taken off Welfare,they're going to literally die and theirchildren are going to die. Before we even getto the point of child care, jobs andtransportation, we have to deprogram theseWelfare recipients into knowing that they willnot die and their children will not die, andbeing on Welfare is not a way of life. Itshould be a safety net.

So, the way that we can do this is toprepare motivational speaking and motivationalworkshops to work with the women and thefamilies who are on Welfare. You-have toreorganize, deprogram the recipients before wecan even talk about getting jobs because evenif they do get jobs, and have the proper childcare and the transportation, they're going tohave to have support to continue to stay onthose jobs. And by deprogramming them andturning their whole mindset around, then you're

47

going to be able to keep them on the jobs. So,just to get them jobs doesn't mean a thing ifthey're not going to continue to work and ke pthe jobs.

MR. WAHEED: I would add ranking secondright behind child care two additionalservices. One would be job readinesstraining/job coaching because many will enterthe work force without the necessary properwork ethic and communication skills to stay onthe job. And then the other one would be casemanagement type services keeping in mind thatmany of the children, not all, but many of thechildren will have behavior problems and willhave developed certain kinds of patterns ofbehavior that cause disruption in the school.If that parent has to take off work constantlyto see to the child's misbehavior, then theywill probably lose their job. Therefore, ifyou have a case manager who can help thatparent manage their child.while he or she's inschool and then report regularly to that par ntwhen they return and do some work in the homes,I think that we will ensure the likelihood ofsuccess in the work force.

•

48

MS. WALLACH: I'd like to add that the fixsequence models of job training to actuallyholding a job may not be appropriate for thhardest to reach families; that for many ofthese families, they need enduring support overa period of time, opportunity for supportiveemploYment opportunities that are supervisedfor up to a year and, again, just to emphasize,

.the continuous support.GOVERNOR DEAN: I have a question for

Ms. Holly about the discipline. I think you'rea breath of fresh air, and I very much enjoyedyour presentation. The one thing that didconcern me was the question of getting out ofthe community and don't tell us how todiscipline our kids because I think there's abalance there someplace. We're all in thebusiness of fighting against child abuse, and Iwould agree with you that sometimes governmentcan be intrusive and so forth, and I certainlyagree with you about mouthy kids saying, "Don'ttouch me or I'm going to call the SRS," as it'scalled in oUrftt.ate, ...l;>~t.. \!~ also do see kids- - -- ---- -- - - - --

that really are physically abused. How do youkind of figure out what you think is

49

appropriate involvement and what is notappropriate involvement?

MS. HOLLY: That is a very good question.In Madison we conducted a series of workshopscalled, When is it Child Abuse? Now, as Istated earlier, I'm not dead and my sisters andbrothers are not dead. We're not talking aboutbeating kids until they're black and blue. Youmight not have to hit a kid at all. I'm noteven advocating that you beat or hit kids; I'mjust talking about let us discipline our kidsthe way we see fit whichever way we see fit. Icertainly do not advocate for child abuse. Icertainly do not advocate for a kid to get hitto where they are beaten black and blue, but Ido advocate for a parent to have the right tochoose how to discipline their kid, and we'retalking good parents h~re. I'm assuming thatwe're talking good parents. I'm not talkingabout someone who is strung out on drugs andthat. I'm assuming that we're all talkingabout good parents. So, good parents have goodjudgment on how to discipline their kids andthey're not going to hurt or abuse physicallytheir children.

50

GOVERNOR DEAN: How do you draw the linethough between good parents who aredisciplining kids in an appropriate way whereintervention is not appropriate and parentsthat are repeatedly not disciplining theirkids? Do you use another factor besides thediscipline or how do you kind of sort that out?

MS. HOLLY: Well, it's easy to know whosekids are, again, disciplined and who's notbecause it's going to reflect on the actions ofthe kids in the schools and in the community.And you know by the way the kid acts what kindof parents. Like I guess my grandmother wouldsay, the fruit does not fall far from the tree,so that's how you can tell who is doing theright thing and who's not. But as a group ofpeople, our logo in the Mothers of SimpsonStreet is, "It takes a whole village to raise achild." So, it is the responsibility not justof the parent but you have to have surrogateparents. We go to the schools as surrogateparents to PTSO meetings.

I think in the high school that werepresent we have ten women in our group, wemay have two students from that whole group,

•

51

biological students, but all of us go to thePTSO meetings because we are surrogate parentsfor all of those students. So, everybody hasto take responsibility for the children and seethat there is no abuse and that there is noneglect. It's not just a biological issue;it's a surrogate and a community issue.

MR. HOGAN: Governor, I'd like to just addone thought to that. In the tremendousreductions of abuse that we've seen in Vermont,most of it has been in the zero to five agecohort, which really we have begun to connectthat kind of thinking to the kind of homevisiting and the educational process that'sgoing on with those families at that very, veryearly age. I mean, here's what happens whenyou shake your child.

MS. HOLLY: That's right.MR. HOGAN: Here's what happens to the

brain stem. That is tremendous education, andwe're seeing the connection now between thatkind of home visiting and dramatic reductionsin child abuse at the earliest age groups.

GOVERNOR DEAN: Governor Lowry.GOVERNOR LOWRY: Mr. Chairman, excellent

•

52

panel. Ms. Wallach you referred to a studythat says we save $6 for every $1 spent onprevention. What was that study?

MS. WALLACH: It was the u.s. House SelectCommittee report, and I have the report withme. I'd be happy to give you a copy of it ifyou're interested.

GOVERNOR LOWRY: The U.S. House SelectCommittee report?

MS. WALLACH: Right.GOVERNOR LOWRY: Date, approximately?MS. WALLACH: It was 1990. I can give you

the citation. I have it with me.GOVERNOR LOWRY: I would think that would

be something every Governor would want to see.MS. WALLACH: Yes. It's an excellent

report. It goes through the gamut andcontinuum of children's services looking ateverything from prenatal care, home visitation,immunizations. It's a very comprehensivematernal and child health report. It was verythorough.

GOVERNOR LOWRY: Thank you.GOVERNOR DEAN: Governor Whitman.GOVERNOR WHITMAN: I just wanted to ask a

53

question of the panel, follow up on the homevisit aspect of what you were talking about.How is it determined what families get the homevisits? How frequently do they occur? What'sthe time frame? I know in Great Britain wherour first child was born, that she was a wardof the state technically for the first fiveyears of her life, and there was a home visit.Once they determined that it was a suitablehome, they didn't come back, but that was afive-year commitment on the part of the countryto monitor the care of that child. And theydid it for every child born.

MR. HOGAN: This is a beautiful questionbecause the approach we're using, I believeHawaii is using, is that every child, rich orpoor, is offered that visit; that it's not aquestion nf rich or poor, it's a question ofwhat you know about how to raise your child.

And the degree and the intensity of homevisits is determined by local people who dothose visits. For example, in Morrisville, ourschool nurse does--the home visits- in----- -~---Morrisville. In another part of the statesomeone from our parent child center, and these

54

are functions of the local plans that thesefolks have put together. The only requirementthat the state of Vermont says there will behome visits. And then they present us ageneral plan on how they want to go about it,and we sign off. So, it really is reallylocally driven, and our public health folks arealso involved in that.

MS. WALLACH: Governor Whitman, I ·need toadd that in Hawaii we do not have what iscalled a universal home visitation programwhere all infants and their families arevisited. We have what is called a targetedhome visitation program. We screen 50 percentof the births in hospitals across the state andidentify through a valid screening processwhich families might be at risk for childmaltreatment without intervention and thenoffer services to those families.

GOVERNOR DEAN: Governor Thompson and thenGovernor Schafer.

GOVERNOR THOMPSON: Thank you, ChairmanDean. First, let me thank all the members of-the panel for being here. We appreciate yourdedication and all that you've done. I do have

55

a specific question for my friend Louree Hollyfrom Madison. You've been extremely successfulwith the Mothers of Simpson street, and I'dlike to commend you, as Governor of Wisconsin,for the job that you've done. You've made usall very proud for what you've done.

Would you please tell the Governors howyou've been able to work to build the bridgesbetween the families of Simpson Street and thecommunity police department, the schools andthe government. You have done an excellent jobof reaching out and working together, and Ithink it would be a nice story to tell theGovernors.

MS. HOLLY: Okay. Well, the way thatwe've managed to build collaboration with thefamilies, and the government and the schools isby parent participation. We have been ar:e toget the mothers to come together and to work ontheir strengths. They know what theirstrengths are. We don't focus on negativebehavior and negative activities. We focus onthe strengths of the p~opJe i~ the community.And when the people are focusing on thestrength and the positive things that's

56

happening in their community, they recognizethat some of the same people that's on theoutside, some of those same people want thesame things for us as we want for ourselves.And we began to work together.

Now, we have an excellent, excellentrelationship with the Madison PoliceDepartment. We have an excellent relationshipwith the Madison Police Department. We have anexcellent relationship with the schools. Wehave gone into the schools. The way we beganto work with the schools, we went into theschools and we did hall monitoring. We wer,just there. We just appeared there. We justcame from out of the clear blue and justappeared there. And the children in theschools would recognize us, and when they wouldsee us, when the children are in the schools,they see us walking down the hallway, the firstthing they would say, "I'm on my way to class."Sometimes we're not even there for that.Sometimes we're just there to see the principalor to say, J'Hi-.fI --!!'hefirst--t.-hingthey- say i- "I-was going to the bathroom." On a weekly,sometimes monthly basis, we monitored the halls

•

57

as a group of women. We just go and walk thehalls. We have free range at the school to goand sit in on a classroom. We sit in onclasses. sometimes we get calls to say,"There/s going to be a fight at school today.John Doe is going to jump on sally Sue." We/rethere at the schools and that doesn't happen.The police don/t even have to intervene.

Sometimes the police call us and say, "Wehear that this is going to happen in your areatonight. Can you come over?" And we go andride around in the neighborhood and nothinghappens. The police have commended us onactually stopping situations that they couldnot stop. We did a workshop for the policedepartment once, and one of the police got upand said, "I have to commend you because youwere here on Halloween night, and there was 11squad cars here, and there was this big mass

.confusion and one of the Mothers of simpsonStreet walked up and said, 'Can I help?'" Andthe police said, "Yes." So, the woman walkedover and said, "Hey, John Doe, you cone with _me. Sally Sue, you go with this other mother,"and that was the end of it, and they had been

58

out there for hours trying to stop it andnobody paid them any attention.

So, the relationship we have is that wefocus on our strength and we know what ourstrengths are. And we do not focus on theweaknesses. We do not play on the negativenessin the neighborhood, and that's what I'm sayingabout focusing on the strength and the successof the children as opposed to focusing on thefailure of the children. This is an examplefor the children. If we are going to focus onour successes and our strength, then thechildren are going to definitely follow in ourfootsteps.

GOVERNOR DEAN: Governor Voinovich.GOVERNOR THOMPSON: Louree, Howard and I

were just commenting up here. If you told usto go 10 school, we'd go to school.

GOVERNOR DEAN: Governor Schafer and thenGovernor Voinovich.

GOVERNOR SCHAFER: I will relay the storythat I had a conversation with a Vermontcitizen ±n-th~-supermarket parking lot-acrossthe street the other day. And I mentioned Iwas from North Dakota, and the person said,

(

59

(

"Well, I just read that that was the number oneplace for children." And I said, "Yes, it is,and we're very proud of that." He said, "Well,we in Vermont aren't at number one, but we'reworking hard to get there." And I said, "Well,we're going to work as hard as we can to staythere," and we both concluded that that was avery worthwhile endeavor. And I wanted tothank the panelists for your input andcertainly, Governor Dean, for your leadershipon this issue. I think it is a worthwhileendeavor and one I'm pleased to see the statesworking on hard.

GOVERNOR DEAN: Thank you. GovernorVoinovich.

GOVERNOR VOINOVICH: Dr. Thomas, thiscountry has a wonderful vast health caredelivery system, yet we do a :ousy job ofimmunizing our children. Would you like tocomment on how you think we can improve theimmunization record of our respectivecommunities?

MS. THOMAS: We need to take advantage ofgetting children immunized wherever they are.Often these children don't present to us in th

60

health care facility itself for theirimmunizations. And looking at Ohio inparticular, a couple years ago we wereimmunizing probably about 40 percent of ourchildren at the appropriate level at the age oftwo and under. We have moved that now up to 60percent, and we've done that by being able toutilize some other nontraditional methods.

So, we're doing things with children whenthey come to the WIC clinics. We utilizechurches. A lot of the health departments arenow offering immunizations in places where theyreally have never been before. So, we reallyneed to go where those families are and offerthe children those opportunities to getimmunized.

GOVERNOR DEAN: Thank you. We'll take onemore, if there is ~ne. And if not, I want todeeply thank you. You all have been veryinspirational to us. Some of you I've heardtwice and you're still inspirational, and Ireally appreciate it. As Governor Thompson andI said, we would darn well get to school if wsaw you coming down the street, Ms. Holly.

But this has been very helpful to me, and

61

I hope to the other Governors, because we aregoing to be faced with some cutbacks. It'sgoing to be very difficult, and if we can't doa better job as Governors supporting peoplelike you who have worked at the community leveland figured out what it is, and this is allabout families and communities, every singleone of us, no matter what party we're in,believes that we do have a crisis in familiesand that the solution to that crisis infamilies is making families stronger, and wedon't think that states and the federalgovernment can do it. We think only thecommunities can do that, and we're going to bea lot better off if we support you than if wetry to tell you how to do it. So, this hasbeen very helpful to us, and we hope to go fromhere. And over the next year I hope tocontinue to work with you to see how we canfigure out how to do this around the country.So, we really appreciate it, and thank you verymuch.

(Applause)---Governor Voinovich.GOVERNOR VOINOVICH: I'd like to comment.

62

You've got this brochure from the state of Ohioin front of you, and we feature the Help MeGrow Program. I want to acknowledge that wecopied this program from the state of Illinoisand from the state of South Carolina, so thatit came from them and not Ohio.

GOVERNOR DEAN: Well, that's what thismeeting is all about. We had a talk yesterdayin the Governors-only Association about, well,if we don't have a resolution, what are wegoing to say to the press that we had to showfor this meeting, and I think what we have toshow for this meeting is this and that. Ourprograms are all borrowed from each other, andthe more we do that, the more the five of youborrow from each other, the better off we'reall going to be. Thank you very much.

We are now going to move the considerationof policy positions. They're going to beconsidered alphabetically by the committee withthe Executive Committee last. These policieswere sent to Governors on the 14th of July.The policies are all in front of you in thepacket that's on your table right in front ofyou. On the top of it it says, Adoption of

63

Policy statements and Plenary Sessions. Theseare going to be moved in block. I don'tbelieve any of them are controversial. Some ofthem started out as controversial, and you allhave worked extremely hard to narrow thedifferences, and we appreciate that very, verymuch.

I'm going to ask the committee chairs, orvice chairs if the committee chair's absent, tomove the policies. And I first calIonGovernor Nelson who's the Vice Chair of theCommittee on Economic Development and Commerce.Governor Nelson.

GOVERNOR NELSON: Mr. Chairman, thank youvery much. I move that we adopt proposedchanges in policy and reaffirm existing policyas indicated on the blue handout, that we dothco.tin block.

GOVERNOR DEAN: Is there a second?GOVERNOR KEATING: Second.GOVERNOR DEAN: So moved. All in favor

signify by saying aye.(Aye) _ ___ _ _GOVERNOR DEAN: Opposed by saying no. The

ayes have it, and we have adopted the policies.

64

Governor Carlson is not here. I will callon Governor Carper from the Committee on HumanResources to move the policies in the Committeeon Human Resources. Governor Carper.

GOVERNOR CARPER: Thank you, Mr. Chairman.Our committee approved four new policiesyesterday reaffirming with an amendment in theform of a substitute to two existing policies.Those policies included Individuals withDisabilities Education Act, National andCommunity Service, Emergency Management and theReligious Freedom Restoration Act, itsapplication to state prison inmates. We alsoreaffirmed with an amendment the Fair LaborStandards Act overtime pay. without objection,I move these policies in block.

GOVERNOR DEAN: Thank you. I believe weneed a suspensicll of the rules to amend thepolicy, is that correct? So, Governor Carperhas moved the adoption of the human resourcespolicies. Is there a second?

GOVERNOR WHITMAN: Second.GOVERNOR DEAN: All thoseift-favor -signify

by saying aye.(Aye)

•

65

GOVERNOR DEAN: Those opposed by sayingno. The ayes have it. We've adopted the humanresources policy.

I call now on Governor Lowry, the Chairmanof the Committee on Natural Resources, foradoption of the natural resources policy. IsGovernor Lowry here?

GOVERNOR LOWRY: Yes. Sorry,Mr. Chairman.

GOVERNOR DEAN: Thank you, Governor LOwry.NOw, your cholesterol is as low as Bob Dole'sand Bill Clinton's.

GOVERNOR LOWRY: The Natural Resourcecommittee, again, Mr. Chairman, had a veryproductive year, and I want to thank especiallyGovernor Branstad for his leadership as we cametogether in agreement on very difficult issues.Yesterday the committee passed unanimouslyseven policy positions, and I would move thosfor adoption.

GOVERNOR GERINGER: Second.GOVERNOR DEAN: Is there a second? All

those in favor signify by saying aye.(Aye)GOVERNOR DEAN: Those opposed by saying

66

no. You have adopted the pOlicy.GOVERNOR LOWRY: Mr. Chairman, a second

order of business on that.GOVERNOR DEAN: Well, I wasn't aware of

one, but go ahead.GOVERNOR LOWRY: We also have an

additional resolution put together put forwardby Governor Symington that requires asuspension of the rules.

GOVERNOR DEAN: Right. We are going toget to those. We're now going to move theExecutive Committee policies. GovernorThompson will move those, and after we do thosewe're then going to entertain a motion fromGovernor Thompson to suspend the rules toconsider those policies which require rulesuspension. So, I will now calIon GovernorThompson to move the Executive Committeepolicies. Governor Thompson.

GOVERNOR THOMPSON: Thank you,Mr. Chairman. We have had very fewnoncontroversial items to come in front of theExecutive Commit-t~,--one dea-l-i.JlCj--wit-h-the-lineitem veto, which we've done before; and theClean Water Act Resolution offered by the

in favor signify by saying aye.(Aye)GOVERNOR DEAN: Those opposed by saying

no. And you have adopted the policies.I call now on Governor Thompson for the

suspension of the rules.GOVERNOR THOMPSON: Thank you,

Mr. Chairman. The suspension of rules requireda line item veto resolution which has been NGApolicy before, it was co-sponsored by HowardDean and myself; the Clean Water Act Resolutionthat Governor Lowry has just mentioned, and L "--"-- -"-"---~

believe it is noncontroversial, was agreed toby the committee; the other one is the

67

Natural Resources Committee which will requiresuspension of the rules; and principles for thestate-federal relationship; and theclarification of sunsetting NGA policy; andJerusalem 3000. Those last three that Imentioned do not require suspension of therules, so I will just move those at this tim ,Mr. Chairman.

GOVERNOR DEAN:GOVERNOR ROMER:GOVERNOR DEAN:

Is there a second?Second.

Governor Romer. All those

•

68

facilitating innovation for medical devices indrug research which was offered by the HumanResources Committee, I wasn't there at thecommittee, but I understand that policy alsoreceived unanimous support without anyopposition; and the fourth one was HR-33,paternal involvement in child rearing, whichwas also offered by the Human ResourcesCommittee. It's in this packet if anybodywants to read them but, as I understand it,there does not seem to be any opposition and,therefore, Mr. Chairman, I would at this timemove the suspension of rules so we could takeup these resolutions and adopt them en masse.

GOVERNOR DEAN: All those in favor ofsuspending the rulings please say aye.

(Aye)GOVERNOR DEAN: Those opposed by saying

no. The rules have been suspended.Governor Thompson to move the adoption.GOVERNOR THOMPSON: I will now move,

Mr. Chairman, the adoption of these four itemsand would-hopa-that we ~et a second and that itwould be approved.

GOVERNOR DEAN: Is there a second?

69

GOVERNOR NELSON: Second.GOVERNOR DEAN: There is a second. All


no. We've adopted the policies.Before we have a recognition of the

departing Governors, there are two Governorswho asked for a point of personal privilege,and I would like to calIon Governor Keatingfrom Oklahoma.

GOVERNOR KEATING: Thank you,Mr. Chairman. I'll be very brief. As mycolleagues know, on April 19th Oklahomaexperienced an awful tragedy in the bombing ofthe Alfred Murrah Federal Building. What youdo know is 168 people died, some 600 peoplewere injured. We h~d 2,000 automobilesdestroyed. 320 buildings in downtown Oklahomacity were damaged, but what is as awful is that30 children lost both their parents, 140children lost one parent. We had some 40children who we can't even find the otherparent. We're still attempting to contact andlocate the displaced children's noncustodial

parent.The situation was agonizing for all of us,

but from all of you came enormous help. And Iknow around the table there are a number ofstates representing the FEMA teams, Florida andvirginia, New York, California, Washington. Anumber of other states provided volunteerfirefighters, and as I look around I can see anumber of the Governors representing thosestates for which we are very grateful. Also,yesterday Governor Branstad made reference tothe fact that Iowa was donating 168 trees inhonor of the 168 victims for a special memorialpark in the capitol area in Oklahoma City.

All of these things were most gratefullyreceived. All of us as Oklahomans are gratefulto all of you as Governors and fellow Americansfor your goodwill and your kindness. We willnever forget it, and we are very grateful. Ijust wanted to say that before we adjourned,how very grateful I am and the people ofOklahoma for all of your goodwill and yourgenerosity •. _

GOVERNOR DEAN: Governor Keating, weapplaud your remarkable and courageous

70

•

71

leadership during that terrible tragedy, andwhatever we might have done as states, wecertainly are far inferior to the tremendousefforts and leadership that you showed duringthat terrible time for America. Thank you verymuch.

(Applause)In a somewhat lighter vein, I now calIon

Governor Whitman for a little revenge.GOVERNOR WHITMAN: Thank you,

Mr. Chairman. I don't want to be a winner whogloats, but for very good reasons GovernorEngler was unable to be at the Governors-onlysession so I could not do this presentation inthe same manner that he had done his to me.

GOVERNOR DEAN: And now he has to endureit publicly, doesn't he?

GOVERNOR WHITMAN: He now has to endure ithere for which I have very mixed emotions. Iwould just like to, while I know it wasn't partof our bet, John, I don't want you to forgetwhat happened, and I want you to be able totruly appreciate the quality of the hockey thatwe saw from both teams. And I applaud yourteam for the hockey that it played, albeit

72

inferior to the Devils. I also wanted to giveyou a lasting momento; I also want to make surethe girls understand quality hockey and howexciting national hockey play is and stanleyCup play is. So, I have a few momentos topresent to you and to the group. You will notethe Stanley Cup championship patch here.

(Applause)We also have smaller versions for the

girls.GOVERNOR ENGLER: Thank you.(Applause)GOVERNOR DEAN: Governor Branstad was

unable to stay, and so I'm going to calIonGovernor Whitman to deliver the report of theNominating Committee. Governor Whitman.

GOVERNOR WHITMAN: The NominatingCommittee would like to put forward for the1995-96 Executive Committee of the NationalGovernors' Association the following names:Governor Dean, Governor Romer, Governor Engler,Governor Voinovich, Governor Leavitt, GovernorCaperton, coverner '-Bayh-,- Governor Mil lex andGovernor Thompson. Governor Miller as ViceChair, Governor Thompson as Chair. I'd move

73

that acceptance of those names.GOVERNOR DEAN: All those in favor signify

by saying aye.(Aye)GOVERNOR CARPER: I second it.GOVERNOR DEAN: All those opposed by

saying no. The ayes have it and, GovernorThompson, come up and claim your chairmanship.

(Applause)Well, this conference has gone off without

a glitch; however, I just made the first glitchand I need to recognize the departingGovernors, and Tommy has kindly consented asthe new Chair to allow the departing Chair todo that.

I want to thank Governor Edwin Edwards andGovernor Brereton Jones, who will be leavingoffice this year, for their leadership to theunited states and for their states. LibbyJones is here. Governor Jones could not behere with us and neither could GovernorEdwards, but Libby Jones is here, and if shecould please come forward.

(Applause)Governor Jones can be extraordinarily

74

proud of his ten year leadership effort forfinal passage of the 1994 Kentucky Health CarReform Law, the Kentucky Health Care AccessFoundation, the award winning education reform.He serves on the NGA Executive Committee and,Libby, we deeply appreciate you accepting thisaward on behalf of Brereton.

(Applause)MRS. JONES: Thank you so much, Governor

Dean. I accept this with great pleasure andwith great nostalgia because this has been awonderful experience for Brereton and for I andour staff to be associated with this wonderfulorganization, and I know he will treasure thismomento as he treasures your friendship and allof your support through the years. We willmiss you, and we hope we see you in Kentucky.Thank you very, very much.

(Applause)GOVERNOR DEAN: In turning this gavel over

to Tommy Thompson, I want to thank the NGAstaff for their remarkable leadership and hardwork this year. I particularly- want to thank.my own staff for their very hard work. It's agreat deal of work to run the NGA.

75

(Applause)Bob Rogan has more frequent flyer miles

than I do, and that's saying something. I wantto thank my Chief of Staff Kathy Hoyt,particularly Kate O'Connor and Cricket O'Connorfor putting this conference together.

(Applause)I want to welcome Tommy Thompson to the

leadership of this organization. TommyThompson is a fair person, a person who I'veenjoyed dealing with, although we've hadcertainly our moments this year in our verydifficult switchover of power. He is a verydecent human being. I am proud to call him myfriend and proud to introduce to you the nextChairman of the National Governors'Association, Governor Tommy Thompson ofWisconsin.

(Applause)GOVERNOR THOMPSON: Thank you very much,

Howard. Let me just start off by recognizingand thanking Howard Dean for his leadership ofthis fine organization..:tt _w.a~n9t aD_easy __time. Howard was head of the NGA during atremendously turbulent political period. He

76

managed to keep us focused and looking at thebig picture, looking forward and looking fortomorrow. Sure there were disagreements, butthe great thing about Governors has always beenand always will be in this organization thatwe're able to continue to work together aspartners. Agreements or disagreements, we liketo accomplish things. That's the model forGovernors. Maybe some day our colleagues inWashington will catch on to this. Maybe theywon't.

So, I want to take this opportunity topersonally thank Howard for his friendship butabove all, for his hard work, his dedicatedleadership and for inviting all of us here toVermont. I think we've had an excellent time,a wonderful time and, Howard, we have somegifts for you in just a little bit ofappreciation for what you've done for thisorganization.

First, let me present the gavel to you.It says, "Presented to Howard Dean, Governor ofVermont, for the outstanding leadership asChairman of the National Governors' Association1994-195 on the occasion of the 87th NGA annual

•

77

meeting, August 1st, 1995."(Applause)Now, Howard, we have a gift here from the

NGA and from all of us for your great hard workand your great leadership. We don't all knowwhat it is because it was your security guardsthat went out and picked it up. So, if youdon't like it, blame them; but if you like it,congratulate us.

GOVERNOR DEAN: Thank you. That's a badsign. Excellent. Very good.

GOVERNOR THOMPSON: We heard you like tocamp.

GOVERNOR DEAN: I do indeed. Thank youvery much. This is great. My goodness. Thisis great. We're going to use this in exactlynine days, but who's counting. Thank you verymuch.

(Applause)GOVERNOR THOMPSON: Thanks, Howard.Governors, I am really looking forward to

serving as your Chairman at such, I think, anhistoric time. Governors are taking part inthe most radical transfer of power since thenew deal. Call it new federalism, call it

78

devolution of power, call it whatever you want.It's a whole new ballgame out there andGovernors are the ones who are really going tomake it work. I notice a difference whenever Igo out to Washington these days. I go up toCapitol Hill and Congressmen smile and wave.They say, "Hi, Tommy, what's going on inWisconsin? Got any good ideas for us?"They're actually happy to see us, and that'sjust the Democrats.

Governors right now are facing what Iconsider once in a lifetime opportunity tocompletely refocus the relationship between thestates and the federal government, and my goalas Chairman is to make sure it happens. That'swhy I'm going to do some things a littledifferent. Instead of focusing my Chairman'sinitiative on one narrow policy area, I want tospend the next year rebuilding and reshapingthe National Governors' Association into anorganization that is dedicated to helpingGovernors take on the new challenges that we'rgoing to.face -in--t".hese-newt-imes. I have two- -- .goals.

First, I want the NGA to be more of an

79

effective lobbying arm for the states. Thefederal government is poised to returnunprecedented power and responsibility to us.I want to make sure that happens, and I want tomake sure it happens without a lot of stringsattached. states simply must have the greatestflexibility possible to make this newpartnership work.

Second, I want to turn the NGA into moreof a service organization. I want it to be aplace where Governors can go. I want it to bea resource for all of us, and I want it tosupport the issues that we care about. And Iwant NGA's number one service to be this,sharing ideas that work.

Just this morning Governor Keating came upto me and said, "You know, it would be nice tounderstand what happens during a disaster, andI'd like to be able to tell Governors how Ihandled it." Another Governor said, "I wouldlike to know what happens if there's a prisonriot. How do we handle such a situation?" NGAis going to be that resource, a repository, forall the great things states are doing alloverthis country. We're going to bring together

80

all of the best ideas, the best practices fromall of the 50 states. We're going to leteveryone know about them.

We're going to focus on seven criticalissue areas, and I'm going to ask each one ofyou to serve as part of an issue team. I willbe asking 14 of you, 7 Democrats and 7Republicans, to serve as co-chairs of thedifferent issue teams. I want us to share oursuccesses and learn from our failures. That'ssomething the federal government rarely does.The states cannot afford to make the samemistake.

We are so close. Ten years ago, 20 yearsago people were only talking about the chang sthat are about to take place. I liked whatPresident Clinton said yesterday, and I alsoliked what Senator Dole said yesterday, "Thatwe're moving from paternalism to partnership."The federal government is finally accepting thefact that we can take care of ourselves.They're finally accepting the fact that wedon't need their advice on a daily basis.We'll still call home every once in a while,but it's time to cut the apron strings.

{•

81

Instead of asking permission for the car keys,we want to drive our own car. Is it going tobe easy? Nothing worthwhile ever is. As TomHanks said in the movie "A League of TheirOwn," "If it was easy, everybody would be doingit."

Well, the nation's Governors are doing it.We're taking a lead in the most radical shiftin government power since the Great Depression.And if you think about it, who better to do thejob. On the tough issues facing the country,Governors are the ones with first-handexperience.

Two issues have dominated this year'sconference, Welfare reform and Medicaid. Wehaven't reached closure on either one yet,which is why I, along with the Vice Chairman,Bob Miller, are announcing the formation o~ twotask force, one on Welfare, the other onMedicaid. Welfare on the Republican side willbe Engler, Sundquist, Thompson, Weld, andBranstad and Allen. On the Democrat side willbe Miller, Bayh, Carper, Chiles, Romer andDean. And Medicaid is still being worked out.I am asking incoming vice Chair Bob Miller to

•

82

•

name the members of the Democrats and I willname the Republicans, and we plan to startworking immediately. We need to start workingon Welfare starting next week, and we will hava conference call hopefully on Monday morningfor all of those individuals interested.

I'm also announcing today that I plan tohold a summit on education this spring. I wantto bring together the National Governors'Association, the Education Commission of thstates of which I am also the Chair, and I'veasked Roy Romer to set up a committee onstandards through the Education Commission inthe states as well as the nation's businesscommunity. Lou Gerstner stood right here onSunday and told us he wanted to be our partner.I'm going to take him up on the offer. I'vealready talked with several of you this morningand all of you think it's a good idea.Governor Hunt, and Governor Romer and severalother individuals. I've talked to Lou Gerstn rabout this.

Governors and-business-owners·cannot-afford to simply talk about jobs and educationfor the future. We have to produce, and what

83

better time than right now, this upcomingspring, to have a revisit of Charlottesvilleand to base our strategy for Governors oneducation, on school to work, apprenticeship,technology and standards. And I'm going to beasking all of you to be very much involved tomake this really one of the highlights of theNational Governors' Association tenure thisyear.

Rhetoric is fine, but it's the resultsthat really matter. I expect to see results atthis summit, and I expect to see results in theyear to come as Chairman of the NationalGovernors' Association. I need yourinvolvement, I need your support and yourcooperation. We have an exciting time in frontof us, and I am confident that if we set asideour differences, whir.hhas always been themodel for this organization, I am confidentthat we can build this organization as strongas we want it to be and make it as successfulas we want it to be. It is your organization,and together we can make it the best itpossibly can be.

Is Governor Rossello here? Governor

(

84

Rossello, did you want to say a few words aboutPuerto Rico first before we move to close? ButI do want to thank all of you for this honorahd look forward to working with each of you inthe upcoming year. Thank you very much.

(Applause)GOVERNOR ROSSELLO: Thank you, Chairman

Thompson, and thank you also outgoing ChairmanGovernor Dean, our gracious host for this week.Coincidentally, the next annual meeting of theNGA there will once again not only be a doctorin the house but also a doctor as the host.

After two superb gatherings here in NewEngland, last summer in Boston and this summerin Burlington, the NGA next summer will bepaying a first visit in a quarter of a centuryto America's deep, deep south as we cometogether in Fajardo, Puerto Rico,__from July14th to July 16th. My wife Maga and I lookforward with great pride and enormousenthusiasm to collaborating with Governor andMrs. Tommy Thompson, the Executive Committeeand the NGA staff. We're most grateful thatwhat we'd like to think of as our continent ofPuerto Rico has been selected for this very

85

high honor. We believe that 1996 will be avery timely movement for the NationalGovernors' Association to return to America'sisland of enchantment in the Caribbean Seabecause today's Puerto Rico is rapidly becominga bilingual, bicultural bridge for thepromotion of trade and investment between NorthAmerica and Latin America in the new age ofhemispheric economic integration that is nowcurrently underway.

In that spirit, we're taking veryseriously the responsibility that you haveentrusted upon us. Indeed, for more than ayear now we have been, in a sense, rehearsingfor next summer. For example, Puerto Ricohosted an extremely productive five day annualmeeting of the Washington Representatives ofthe Nation's Governors in March of 1994. InMarch of this year Maga, my wife, was hostessfor the 11th Annual Spouses Seminar of the NGA.And later this year Puerto Rico will be thesetting for the annual meeting and leadershipforum of the Council of State Governments.

As the Washington reps discovered whenthey convened there, the site of the NGA 1996

88

CERTIFICATEI, Lisa M. Hallstrom, Court Reporter and

Notary Public, certify that the foregoing pages3 - 87, inclusive, comprise a full, true andcorrect transcript taken from my stenographicnotes taken in the Closing Plenary Sessiontaken before me as Notary Public on Tuesday,August 1, 1995, 9:30 a.m., at the SheratonBurlington Hotel & Conference Center,Burlington, Vermont.

Lisa M. Hallstrom

--

My commission expires February 10, 1999.

"a,'.

NATIONAL GOVERNORS' ASSOCIATION

87TH ANNUAL MEETING

JULY 30, 1995 - AUGUST 1, 1995

BURLINGTON, VERMONT

OPENING PLENARY SESSIONSUNDAY, JULY 30, 1995

12:00 NOON


COURT REPORTER: Cindy B. Hall, RPR, CP, CM


Montpelier, VT 05601(802) 229-9873

•

2

INDEXPAGE

SPEAKERS:Howard Dean, M.D., Governor, Vermont, Chair ...•..••••• 3

Welcoming RemarksLouis V. Gerstner, Jr., Chairman and Chief .•..•.•.••. 7

Executive Officer, IBM CorporationGary E. Johnson, Governor, New Mexico, ..•.•••••.•••• 35

IntroductionSenator Pete Domenici, New Mexico, United States •••. 37

SenateNGA DISTINGUISED SERVICE AWARDS:Leon F. Osborne, Jr., North Dakota ...•.••..••.•.••••• 72Janina F. Chilton, Utah ••.....•.•••••••••..•...•.•••• 73Cornelius D. Hogan, Vermont •....•...••••••.•••••.•••. 73Peter B. Bensinger, Illinois ........••.•••••.•.•..•.• 74Linda Ann Wallace, Indiana ..•....•..•.......••.•.•..• 75Robert L. Wehl ing, Ohio .........•.••..•...•..•.•.•.•. 76Ann Chotard, Arkansas ..••.•..•..•..•••.•....••.•..••• 76Mary Duke Biddle Trent Semans, North Carolina •..••••. 77

•

3

GOVERNOR DEAN: Good morning. Afternoon.I just want to say a word of greeting to thGovernors, to our distinguished guests. Ladiesand gentlemen, welcome to Vermont. We're verypleased to have you here. I want to call toorder the 1995 annual meeting of the NationalGovernors' Association. I'd like to recognizsome of our foreign dignitaries that are here.We're very pleased to have with us today adistinguished delegation of Russian Governors.And if the Russian Governors would stand to berecognized and appreciated.

(Applause)We also have a member of the European

Parliament, and if he could stand and berecognized.

(Applause)Now, I need a motic~ for the adoption of

the rules of procedure for the meeting. SinceGovernor Thompson is on his way in, I will callon Governor Hunt to make that motion.

GOVERNOR HUNT: So moved, Mr. Chairman.GOVERNOR D-EAN:-AII in favor--signify by

saying aye.(Aye)

4

GOVERNOR DEAN: Opposed by saying no.We've adopted the rules of procedure. TheNominating committee for the 1995 and 1996N.G.A. Executive Committee will be ArnieCarlson of Minnesota, Governor Jim Edgar ofIllinois and Governor Tom Casper of Delaware,Governor Tony Knowles of Alaska. GovernorTerry Branstad of Iowa will serve as Chair ofthe Nominating committee. We will hear theirreport at another session.

Part of the rules require that anyGovernor who desires to submit new policy orresolution for adoption at this meeting afterthe July 14th mailing will need athree-quarters suspension of the rules, and youshould submit those proposals to Jim Martin ofthe staff by 5:00 tomorrow, which is Monday.

We are coming to Vermont at anunprecedented time in history where ourchildren are in significant trouble. More thansix million children under the age of six inthis country live in poverty, more than threemillion children under the age of six do nothave health insurance, more than two milliontwo-year olds are not fully immunized, and

5

nearly one million babies are born every yearin this country without adequate prenatal care.More than a million children under five are ininadequate child care settings, more than85,000 babies every year are physically abused.Yet, we as Governors have had to spend a greatdeal of whatever discretionary funds we have onbuilding prisons, on putting children in fostercare instead of investing in programs andservices that can reduce these statistics.

government supports individuals and families.This year we have had a remarkable opportunityto see local projects, often started by peoplein communities without support, succeed intheir communities in doing things for childrenthat are supportive and in helping the parentsbecome better parents, the kind of parents thatwe need in America to make our country strongagain and to reverse the trends that I've justoutlined.

During the course of the next three days

•

6

we'll hear from a variety of speakers who willshare their thoughts about the role of businessin promoting change and supporting children,about the federal budget and block grants, andabout reshaping federal and staterelationships, about how to change the waygovernment responds to the needs of youngchildren and families.

The first of our speakers today is anindividual who is an important leader in theAmerican business community, but is invitedhere because he's had 25 years of experienceworking on education issues. He in some wayshas two careers, the first is as CEO of anumber of extraordinarily successful companies,but the second is that of an advocate foreducation and for children. He and his companyhave supported Vermont's efforts to reinventour schools with a $2 Million grant. There arefour other $2 Million grants that IBM hasannounced around the country, or will announc ,to support excellence in schools and to try tochange and turn these school systems around.

Our special guest is Louis Gerstner,Chairman and CEO of the IBM Corporation, one of

·'7

•

the largest industrial companies in the unitedstates. I'm extremely proud to welcomeMr. Gerstner back to Vermont and we lookforward to your remarks.

(Applause)MR. GERSTNER: Thank you, Governor Dean.

It's good to be back in Vermont. In 1983 thereport "A Nation at Risk" focused the country'sattention on the deficiencies in our publicschool system. Here's a quote from that reportthat has stuck with me for many years. "If anunfriendly foreign power had imposed ourschools upon us, we would have regarded it asan act of war." That was 12 years ago. What'shappened since? Lots of hand wringing, lots ofspeeches, lots of reports, not much change,very little improvement. It's 12 years since"A Nation at Risk" was published and the u.s.students still finish at or near the bottom ofinternational tests of math and science. Iwonder what the national reaction would havebeen if in the 1984 Olympic games we hadfinished dead last-.~--A-national outrager in alL- __likelihood, that would have brought aboutsweeping changes in amateur athletics in this

•

8

country. Believe me, now 11 years later wewould have seen massive improvements, but inpublic education none, and no national outrageor frustration 12 years after "A Nation atRisk. "

Let's move from 1983 to the EducationSummit in 1989 when at a meeting similar tothis President Bush and the nation's Governorsset the wheels in motion for the EducateAmerica Act, Goals 2000, that President Clintonhelped shape and then signed in June of 1994.Let me read just a few of those goals that weset for ourselves by the year 2000. Allchildren in America will start school ready tolearn. The high school graduation rate willincrease to at least 90 percent. All studentswill leave grades 4, 8 and 12 havingdemonstrated competency in English, math,science, foreign language, civics andgovernment, economics, art, history andgeography. Every school in America will ensurethat all students learn to use their minds wellso they may be prepared for responsiblecitizenship, further learning and productiveemployment in our nation's modern economy. six

9

years have passed since those wonderful goalswere set. More importantly, 1,616 days remaintill the year 2000 arrives. I wonder how manypeople in our country are committed toachieving those goals. I wonder how manypeople think we have a chance of achievingthem. I often think how many people even knowthey exist.

One of the goals I just cited talks aboutgraduation rates and, another, the need forstandards. I read recently that Milwaukee now,has a requirement that high school seniors mustdemonstrate a proficiency in math before theyare allowed to graduate. That is great, and weneed more cities and states doing the same, butthe same article I read reported that 79percent of the junior class failed in a warmuptest this spring. That's dismal and reflectiveof our country at large.

Now, that's not the whole story. The testconsists of complex open-ended problems whichfor these kids was a new approach to math,exactly the right approach, of course, exactlythe direction we want to head in and they'llhave a full year to master it, but what happens

•

10

then? What happens next year if a largepercentage of the senior class fails todemonstrate the required proficiency? WillMilwaukee refuse to graduate those who fail?If they don't, so much for standards, but it'snot that easy. What will we do about thestudents we promoted for 13 years through thepublic school system without demanding highperformance? How will they get the skillsnecessary to earn a living? And, of course,it's much worse than a single class of seniors.We have'given high school diplomas in thiscountry to a whole generation of Americans whocannot basically read those diplomas. They arefunctionally illiterate. The bottom line isthat if our kids are failing in the classroom,it's not just their fault, it's our fault, andthat, my friends, underscores a veryfrightening reality. Setting goals for U.S.education is one thing, reaching them isanother. And the only way it will happen, theonly way that we have a ghost of a chance ofgetting there is if we push through afundamental, bone jarring, full-fledged 100percent revolution that discards the old and

11

replaces it with a totally newperformance-driven system, which is what bringsme to vermont today.

I'm here because of Willy sutton. Willyrobbed banks, the story goes, because herealized that's where the money is. I'm herebecause this is where the power is. The powerto reform? No. No, not reform; torevolutionize the U.S. public school system.You are the CEOs of the organizations that fundand oversee the country's public schools. Thatmeans you are responsible for their health.They are very, very sick at the moment and weare past the time for incremental change andtinkering at the margin. Fortunately, we'renot past the point of no return.

I've spent a lot of time on education, soh~ve many of you, we all have scars to proveit, but I've also spent a lot of time helpingtroubled companies get back on their feet.It's hard work, lots of hard work, and itinvariably involves massive structural'change.But here's the good news. When companies doturn around, they often go on to bigger andbetter things. I'm convinced that our public

•

12

schools can do that. We can win gold medals inthe education olympics, but it will take aworld-class effort and it will only happen ifyou, the CEOs of the system, reach out, grab itby the throat, shake it up and insist that ithappen. The turnarounds we've seen incorporate America don't come close to thecomplexities to the job you face in fixing ourpublic schools, but I believe the principles ofstructural revolution are the same.

First, it takes a personal commitment onthe part of the CEO. This is not a job you candelegate. Two, it takes a willingness toconfront 'and expel the people and theorganizations that are throwing up roadblocksto the changes you consider critical. Three,you need to set high expectations. You can'thave too many goals. One or two are best,certainly no more than three. It's critical tomeasure the progress against those goalsrelentlessly and continuously. And, finally,there must be a willingness on the part of thechange agent to hold people accountable forresults. Nothing pleases me more than to seesome of you moving in this direction in your

13

states. You are responsible for some very,very bright spots in an overall dismal picture,but there aren't nearly enough.

So, what do we do now? In the spirit ofmy views on how one goes about radicalrestructuring of an institution, I want tosuggest three and only three priorities forpublic education for the next year. The firstis setting absolutely the highest academicstandards and holding all of us accountable forresults now, immediately, next year, thisschool year. If we don't do that, we don'tneed any more goals because we're goingnowhere. Without standards and accountabilitywe have nothing. aut if we do have standardsand accountability, I would suggest two otherpriorities that are critical to allow ourinstitutions of education t~ reach those goals,and they are funding change and exploitingtechnology. Let's talk very briefly abouteach. First standards and accountability.

If we don't face up to the fact that weare the only major country in the world withoutan articulated set of education standards andwithout a means of measuring how successful we

14

are in reaching them, we're lost before we getstarted, which pretty much sums up where we aretOday. To turn the tide we must set standardsimmediately and we must have a means ofmeasuring how we're doing. Without standards,education reform is shuffling deck chairs onthe Titanic. And I have to confess I find thewhole thing baffling to me. Baffling. Invirtually everything else we do in the unitedstates we set high standards and strive to benumber one. Why not in education? Inbasketball you score when the ball goes in thehoop, not if it hits the rim. In football youscore when you cross the goal line, not whenyou show up in uniform. In track and field youmust jump over the bar, not go under it oraround it. And who would practice baseballwith the fences at 150 feet from home pl~te?Why can't we establish standards of excellencefor our schools? Why isn't winning in theclassroom important in America? We put a manin space because we set a goal that was beyond,not within our grasp. We need the sameapproach for education and we must berelentless in its pursuit. The lessons we

15

understand so well in every ot~er aspect of ourlives must be translated into education or elsewe will lose. We cannot be sidetracked byacademicians who say it will take five yearsjust to set the standards, nor can we be misl dby misinformed people who will argue thatcertain Americans aren't able to reach highstandards so it's inappropriate to even setthem. I find that insulting and demeaning tothose people, not supportive.

It boils down to the fact that we justcan't settle anymore for mediocrity. We mustcommit to the highest levels of studentachievement, and we must do it now. We can'tallow our schools to simply sit backcomplacently convinced that their onlyresponsibility is to keep students at theirdesk until they're 18 years old. They'll getto 18 fast enough regardless of what we do.What they need from us are tools to helpprepare them for success when they go off tocollege and work, raise families and join theadult community._ This requi-res-an--articulated·set of academic standards that recognizes thereal world they'll be entering. In many places

16

they don't even exist at a rUdimentary level.Many states still require only two years ofmath and science for a high school diploma.Why? Math isn't something that students canfinish in the tenth grade and think they'llnever need it again. And if we're going to doit right, we must make sure our high schoolstudents take real math, academic math, notwhat the students call dummy math; and theymust take laboratory science, not generalscience. We must find innovative ways to helpstudents master these complex sUbjects and wemust hold schools accountable for what studentslearn. It's not enough to memorize facts andfigures. Whether we're dealing with therequirements of the job market or skills neededto participate in society, the bar is higherand gets higher every year.

When the Labor Department recently askedbusinesses what they expect of schools toteach, the answer was clear: A foundation ofreading, writing, arithmetic, combined with anability to use information to solve problemsand to communicate effectively. Those are notesoteric or complex concepts. They are,

17

however, for everyone of these children thedifference between success or failure in theirlives. We must find ways to teach them, tomeasure whether they've been taught, and toreward teachers and administrators at schoolswhere students succeed, and we must haveserious sanctions for those at schools wherestudents are not learning.

Obviously, Milwaukee will have a difficultchoice to make next year because it's out infront, but the fact remains that until we areprepared to penalize students, teachers andadministrators for lack of performance, thesystem will fail. Let me please repeat that.Until we are prepared to penalize students,teachers and administrators for lack ofperformance, the system will fail. We hav, aword for that in business. Accountability. Itworks. without it institutions atrophy anddie.

Let's turn quickly tp the second and thirdpriorities beyond standards. Trueaccountability for performance will depend onexploiting technology and financing change inthe system. You've all heard about information

18

technology. Bear with me if this sounds a bitstuffy, but information technology is thefundamental underpinning of the science ofstructural reformation. It is the force thatrevolutionizes business, streamlines governmentand enables instant communication and theexchange of information among peoples andinstitutions around the world, but informationtechnology has not, however, made even itsbarest appearance in most public schools. Lookaround. The most visible forms of technologyremain the unintelligible public addresssystems which serve largely to interrupt thebusiness of learning, and the copier in theprincipal's office which spews out the formsand regulations that are the lifeblood of theducation bureaucracy. Before we can get theeducation revolution rolling, we need torecognize that our public schools are low-techinstitutions in a high-tech society. And thesame changes that brought about cataclysmicchange to every facet of business can improvethe way we teach students and teachers, and italso can improve the efficiency of aneffectiveness of how we run our schools.

19

I'd like to make you all a personal offer.I'd like to invite you, the Governors and yourkey people, to a conference that I willorganize, pay for and run next year. I'll getexperts from all parts of our industry,including our competitors, to participate andtogether we will show you how technologycreated for business and government can be usedto help you reshape the schools of America.We'll put it all together, but we'll need yourhelp and you'll have to be there. You'll haveto invest a day, not a few hours, because as Isaid before, real change requires theparticipation of the CEO. It will be worth it.I think you'll be excited by the innovativethings that are beginning to happen in someclassrooms, and some of you are already doingsome very interesting things ~ith technology ineducation.

Let's think about how technology isbenefiting kids right here in vermont. Forexample, the portfolios used to measure studentdevelopment are being taken out of manilafolders and put onto digital disks. Thisallows educators to make evaluations based on a.'

20

student's entire output rather than on simplemultiple choice questions. Chicago iscombining the power of telecommunications inthe Internet to train teachers in math andscience. schools in Charlotte, North Carolina,are using video technology to reach into thehome. Philadelphia schools are using voicetechnology to teach language skills to learningimpaired children, and outside the classroomtechnology is cutting away at the schoolbureaucracy in dealing with routine matterslike bus routing, meal deliveries andpurchasing, which brings me to my thirdpriority, financing change.

It is my experience in business, andespecially in turnaround situations, that ifyou want to bring about real change, budgetallocations must support the new directions.Reforms perish from lack of support, and thatmeans resources. True change agents put theirmoney where their mouth is. The educationalBolcheviks fight hard to starve the reformers.

So, how do we finance the revolution? Howdo we use our educational resources to rewardsuccess and encourage performance? Let's start

21

with the $150 Billion or so that you as theCEOs of our states invest directly in thepublic school system. That's about half of the$300 Billion that is spent by state andlocalities, 150 from the states. I've donesome homework so I know that a state'seducation budget is typically constructed byadding a percentage increase to the prioryear's outlays and the basic formula, which isclearly described as arcane, is largely drivenby the number of pupils in the system, and itsupports priorities that have been around fordecades and rarely, if ever, is linked toperformance, success or change.

Here's my proposal. Let's try somethingnew. This year, instead of following the oldformula, hold back ten cents of every dollarand earmark it for strategic investment.That's five cents out of every dollar in totalspent in your state, ten cents out of everydollar that comes from the state itself.

Now, where would we put this $15 Billionto work? If it were me, I'd invest a portion·of it into moving teacher training out of thehorse and buggy era. We expect doctors .to get

22

their training in teacher's hospitals, and wewouldn't send an NBA player on the court if hisonly training consisted of lectures on thetheory of the jump shot, case studies of thefast break and films of games played years ago.Why then do we entrust our children to teacherswho have only listened to lectures, writtenessays on classroom management and readtextbooks on the theory of child development?It's time teachers learn their craft in realschools side by side with expert teachers.It's time they got the kinds of hands-onexperience most other professionals considervital for certification.

If it were up to me, I'd invest some ofthe $15 Billion to reorganize how our kidsspend their time in school. In Japan, wherethe scho~l year runs 240 days a year, theaverage 18-year old has spent more cumulativetime in school than the average American MBA.And while I challenge you to find a teacheranywhere in this country who truly believesthat every subject or any SUbject, for thatmatter, is best taught in exactly 45 minuteswe still ring the bell at the end of each

23

period as though there was a natural order toit all; a science project might take a full sixhours to complete, other sUbjects may be besttaught in 15-minute slots over a two-weekperiod the school day, week and year needsto be reshaped fundamentally to reflectreality. There are hundreds of good ideas outthere about how to use the $15 Billion. I knowabout them, you know about them. Some of thmost promising are emerging from the NewAmerican Schools Development Corporation whichis funding development for breakthrough reformsacross the country. All that's lacking is thecourage to shift funding from the status quothat has failed inarguably to the agenda ofreform and hope for our children.

Obviously, my three suggestions are sureto generate howls of protest from the educationestablishment and from others who are happywith the status quo and unwilling to change.They will say that setting standards is notpossible in education or that setting highstandards will -only raise the-dropout rate.Others will attack the focus on technology,maintaining it's a self-serving business scam

24

or a vain grasp for a silver bullet that won'twork. still others will attack the $15 Billionthat we reallocated for strategic investmentsaying it's just a gimmick, it won't work andit's really in disguise an approach to cuteducation budgets. I see it as just theopposite.

Most everyone in the education communitytalks reform and supports reform, but when pushcomes to shove they back off and attribute thelack of progress to the lack of financialwherewithal. Well, now we have it. Our $15Billion fund will provide a way to kick start amajor effort for reform, and here's the realkicker. We're only going to give the $15Billion to the schools and systems thatactually implement true reform.

Let me conclude by recognizing ~.qain thatmany of you are working very hard to bringabout the changes that we need. The problem isnot enough of us in America are committed toseeing that change happens. Too many of usjust talk about it. You are the leaders of our50 states. It really is up to you to bring usthe educational leadership we desperately need.

25

School reform is not a partisan issue, so Iwould hope that you would work together as ateam and that you would support and learn fromeach other. We're talking about the future ofour nation. Economic prosperity for all ourcitizens is an empty and cynical dream unlesswe provide the necessary education to allstudents. Perhaps more ominously, no democracycan survive without an educated citizenry. So,let's add an R to our traditional reading,writing and arithmetic, an R for revolution.The country needs a new revolution. The firstone gave birth to America. We now need asecond to save our country and to give ourchildren back their future. Thank you verymuch.

(Applause)GOVERNOR DEAN: Lou has agreed to take

just a couple of questions. Any questions andcomments? Governor Hunt.

GOVERNOR HUNT: Mr. Gerstner, you may notrealize the significance of that applause youjust received. Not many people get that muchhere.

MR. GERSTNER: Thank you.

26

GOVERNOR HUNT: Especially unless they'rerunning for President, and even some of themdon't.

First of all, I want to congratulate youon IBM's comeback. It is truly a great thingin this country's economy and you deserve agreat part of the credit for leading that asthe CEO. And a lot of us have IBM facilitiesin our states; Vermont has some they're veryproud of. We at North Carolina have about13,000 jobs or more and $1 Billion in payroll.We appreciate it, and I want to thank youpersonally.

Second, you've been on the front line ofAmerica business in focusing on education andreform for quite a while. I don't know howmany of you Governors have this. John Englerhas his copy, I see, but it's a terrific bookthat Lou did several years ago, and I thank youbecause I really believe that the progresswe're making -- and we are make making someprogress, it hasn't shown up yet asdramatically.as it ought to in scores,_ but whatwe've done over the last several years has beenbecause business leaders have been there with•

27

Governors and some other leaders in bringingabout change, and I would urge you to staythere and continue to help us. You said, Ithink correctly, that we as the CEOs of thestates have got to lead this effort, and youcouldn't say anything more true. It is notgoing to happen, my fellow Governors, unless welead it. The state chief school officer by himor herself can't do that, the school boardcan't, the legislative committees can't do it.We've all got to work as a team, but theGovernors really have to lead it. By the way,I accept right now to come to your conferencenext year, and I suspect a lot of us will bethere.

I want to get to two other things. First,you talked about the goals, and we've got a s tof the~, The Governors did make a big steptoward that several years ago when they cametogether with President George Bush andestablished goals, and a panel has beenestablished made up of primarily state leaders,some congressional involvement, to work towardthat. Is that an endeavor you think we oughtto stay true to and continue to work on?

•

28

MR. GERSTNER: Well, Governor, I would,first of all, thank you for your very nicecomments. We're very proud to be part of NorthCarolina's economy. I think my remarksindicated that you cannot argue with the sixgoals that were established with President Bushthat wound up being eight goals when theClinton administration endorsed them and theact went through. They're all good goals but,you know, when you've got to change something,you've got to measure results every day, and ina funny way establishing goals givesinstitutions somehow walking around room tofeel like, well, we've got goals, so we'reokay. We're okay. 400,000 young people dropout of school every year in this country,400,000 of the most precious assets in ourcountry. How can we -Yait? Why is it six y arslater, and an article appeared in the paperthis week that said it looks like we're gettingaround to starting to set the standards. sixtimes 400,000 is 2.4 million Americans we'vedoomed to a life of pain and poverty.Governor, there's nothing wrong with thosegoals, but who's living them every day? Where

•

29

is the measurement of success? No goals areworth a damn if you don't measure progressagainst them on a regular basis. And so myview is I love the goals. What did we doyesterday, what are we going to do tomorrow,what's our plan for next week. And so, yeah,they're great, but I think perhaps by settinggoals that spoke about the year 2000 as opposedto goals that speak about next year's schoolsystem, maybe we left ourselves a little bit ofair cover that was too high and we went on toother things.

GOVERNOR HUNT: Let me add that theNational Education Goals Panel, again thatGovernors give very strong leadership in abipartisan way to, yesterday moved to setstandards working together to developasseE~ments that a real world, that areauthentic that will help see if people areready to hold your jobs and others, and to workwith the states to help all of them do this jobof setting standards, developing goodassessments and really biting the bullet, so tospeak. And that's a job we're going to need tohave business help us with because that is

30

tough, and I would just urge that Americanbusiness help us with the National EducationGoals Panel if that's something we ought tocontinue, and I hope we as Governors would wantto continue to work on that. But we thank youfor what you've done.

MR. GERSTNER: Thank you, Governor.GOVERNOR HUNT: We are getting to the

tough stuff, and that's when we need businessto stand up and say to legiSlatures and topeople allover our state, hey, we do have todo these standards. We have got to assess indifferent ways other than true and false,multiple choice, can you do the stuff? That'swhat we're really going to need your help on.And I know you're there. I just hope Americanbusiness leadership will continue to help us.

MR. GERSTNER: Ame~~can business is notthere. American business gives about $300Million a year to K through 12 education. Doyou know where it goes? It goes to support thestatus quo, it goes to adopt the school, itgoes to send a few computers ~- I mean, sendingcomputers is a good thing to do. Buy somebooks. I mean, the American business community

31

has been blind to this problem because it hasbeen going through fundamentally a downsizingperiod and now we're coming out of that andwe're going out to hire people, and we find outthey can't even read or write, and we have toeducate them in ways that we're not prepared orconstructed to do. So, the American businesscommunity's got to get to be a force forrevolution too.

GOVERNOR DEAN: Governor Voinovich.GOVERNOR VOINOVICH: Mr. Gerstner, I agree

with you. Let me say this to you. We have aleadership role and you have a leadership rolethat the business community has. We have astrong advocacy group out there among theeducation establishment that don't want to seechange. It's the only area that doesn't get ityet. In our state, as you're familiar with, weput our GEM Council, Governor's EducationManagement Council, and got Joe Goreman, andJohn Ung and John Pepper, and we sat there, andwe empowered the private sector to get involvedin education reform. A lot of what we got donecould never have been got done unless thosebusiness people actually were there and took a

•

32

leadership role. If I go through Ohio and Ilook at the school districts that are makingmeasurable improvement, the business communityis involved in curriculum, they're involved inhelping improve efficiency in the operations ofthose schools. And I just want you to knowthat the business community is going to have totake a much larger role in this effort if we'rto beat down the people who are supportive ofstatus quo. We have a bill in Congress todaycalled the "Education and Training," andthere's a big battle about how that moneyschooled to work, how that money's going to be

distributed. The educators are in there andthey're lobbying the hell out of Congress onit. I think the business community ought toget in there and say we pay taxes; we're notgetting the return that we ought to be gettingfrom the school system. We ought to have moreto say about how this money is going to bespent .and take care of your customers. Butunless that happens, you're not going to getthe people you want; you're going to have toretrain people, add it to your overhead andultimately you aren't going to be able to

•

33

compete in the world marketplace. NOw, we'rewilling to help you, but we need your clout.We've got to let those schools know that whathappens there is important to the businesses intheir community and the future of this country.So, it's a partnership.

MR. GERSTNER: I agree. I accept. Iaccept. I also want to say to you, Governor,that the $400 Million that your state hasearmarked for technology in K through 4 is oneof the great things I've heard about in awhile. I think it's terrific, and I wish youvery good success with it.

GOVERNOR DEAN: I hate to cut this off,but we have Senator Domenici who has been verypatient. I want to, again, thank Lou Gerstner.I have not heard an exposition about Americaneducation which is as challenging, and I justwant Governor Hunt to know he is only thesecond Governor to sign up for that technologyconference because I passed Doug Rose, ourmanager here in Essex Junction, a note justbefore you spoke, Governor, that said I acceptand I want to be on that IBM technology in theschools conference. We thank you very much.

34

•

(Applause)We have a remarkable opportunity here, and

I'm going to calIon Governor Johnson in aminute to make an introduction. Where isGovernor Johnson before I calIon him? I justwant to say "before I calIon Governor Johnsonthat this is generally a bipartisanorganization, but it's been an interesting yearand a lot of switching around, and I amparticularly excited about our next speakerbecause our next speaker has served in theunited states senate for a long time. He is aRepublican, and I have tremendous admirationfor his integrity. And when his budget markcame out, I read it, as I read the House budgetmark, and I realized as I was reading thatchairman's mark in the senate Budget Committeethis is a budget that was put together tobalance the budget, which we all understand, weall agree with, but to do it in a thoughtful,reasonable, caring way. And I think that ournext speaker who Governor Johnson is going tointroduce has a potential of pulling this alltogether because of his carefulness andthoughtfulness in doing what has to be done,

35

which is to balance the federal budget on theone hand, but on the other hand to maintain thefabric of many of those things that isimportant to the united states.

So, I'm very, very pleased that our nextspeaker has agreed to be here, and I appreciateit very much. And I want to introduce to youGovernor Johnson from New Mexico who willintroduce his senior Senator.

GOVERNOR JOHNSON: Well, first I'd like totell you a little bit about my unprecedentedpopularity in New Mexico. About a month ago Igot the chance to jump off the Crest in a hangglider, which is a 10,000 foot mountain outsideof Albuquerque. A woman came up to me and shesaid, "Oh, I see you jumped off the Crest todayon a hang glider." I said, "No, that's nextweekend." She got this b'!,gsmile on her face.She goes, "Oh, good, we can still have aDemocrat as a Governor." I said, "No, no.Walter Bradley will then become Governor,"which is our Republican Lieutenant Governor.She said, "Well, take him with you." Oneperson, though, that she wouldn't have me takewith me is Senator Pete Domenici, our

36

distinguished senior senator from New Mexico,and the reason is because he does such aterrific job. He may have the distinction thisnext election of having everyone in the statevote for him. He'll be running for his fifthconsecutive term, and I'm going to have theprivilege of getting to vote for him fivetimes. As a matter of fact, when he first ranin 1972, that was the first election that I waseligible to vote in.

As a student, as an entrepreneur, as abusiness person and now as Governor, I'm proudof the contribution that I have given to theu.s. Senate. In business, to be successfulyou've got to know the numbers and you've gotto know people. As Governors, to be successfulyou've got to know the numbers and you've gotto know people. As the Senator in ch~rge ofthe federal budget, you've got to know thenumbers and you've got to know people. SenatorDomenici knows the numbers and he knows thepeople as well as anyone I've ever known.

In keeping with the theme of kids andchildren and education, one of my cabinetsecretary's daughter came up with this idea to

37

express at this conference, and I'm going tolay that out for you right now. Can you readthat? So, no strings, be fair and give ustime. Senator Pete Domenici.

(Applause)SENATOR DOMENICI: Thank you. Thank you

very, very much. First let me say to you,Governor Dean, thank you for those kindremarks, and congratulations on your term.Governor Thompson, congratulations on your termwhich will start soon. And I'm not running forPresident. I'm not here representing thePresident. I am a strong supporter of SenatorDole's, but I'm also a united States Senatorwho happens to have a big responsibility withreference to the fiscal policy for our nation,and so you gave me a difficult job. It wouldhave been a lot easier to give a speech oneducation than to excite you about balancingthe budget. One is a great challenge thateverybody understands the results; the other isdifficult to explain on the one hand bututterly simple on the other hand. One is easyto understand in terms of goals and why's, andthis one takes a little time to sink in.

38

I don't know how long Lou spoke, butactually for every minute that he spoke$345,000 was added to the federal budget; forevery hour that you will be here you will add$20 Million to the federal deficit, and on andon. Every child born today in the unitedstates of America is going to be taxedimmeasurably without representation. They willnever vote on the $178,000 that they will haveto payout of their income taxes, Governor, intheir adult lives to pay interest on thenational debt. We run around anxiously tryingto understand why our standard of living isn'tgrowing, why the young people can't look for abrighter, brighter future, and yet we'vedecided to continue to borrow money and letthem pay for it. We've decided one way oranother as adult leaders in America that itreally doesn't matter, the deficit doesn'tmatter and we have no responsibility for itother than give it lip service, and when itgets tough, to abandon ship.

Frankly, I believe the future for ourchildren and our country is tied in animmeasurable way to whether adult leaders, CEOs

39

•

of states as you've been called, Presidents inthe White House and their helpers, Senators andCongressmen, if those adult leaders do notdecide that it's time that adults stand up andcreate a new word about our federal budgethave you ever heard of the word affordable?What can we afford I say to Governor Pataki ofNew York. You know, I've been even embarrassedover some of the years that I've been a Senatorbecause people ask me to get things for themand I'd very, very seldom say, hey, we can'tafford it. You know what I'd say? I'm notsure I have a stroke yet or I'm not sure I'm onthe right committee, but give me a little timeand I'll get what you asked me for. I don'tthink very often I've said, hey, maybe we can'tafford it.

Aft~r you take away all the incidents ofthis last election and where we are in America,the truth of the matter is that time has cometo put affordability back into ourdeliberations. What can we as a nation afford.And I'm not here today to criticize Democratsand praise Republicans, although I will tellyou that I believe change is in the wind and

40

well you ought to be proud of that because mybest recollection, without checking history, isthat you and predecessor Governors for at least

.15 years have resolved every now and then,assembled as you do, that the United statesgovernment ought to balance its budget. Wedidn't invent that. For the most partGovernors invented it. You said we have tobalance our budgets, what are you up to inWashington? Well, now we're up to the realityof it and we're trying to do what you've beentelling us to do.

And secondly, Governors, unless you getcaught up in the partisanship that seems to bein the air today and that will be here probablybefore this august delegation of Americansleaders the next couple of days, you will alsoadmit that you have been tha leadership ofAmerica telling us, federal government, you'respending too much on programs in our states.You ought to let us do more of them, we woulddo them better and more efficiently. And forthe most part Governors have been saying, thefederal government is getting too big. It'stelling us too much about how we ought to run

•

41

things, and why don't you let us try. And whenwe say that now, we get answers that are sortof jumbled and perhaps not lucid and clear.Some Governors are saying, well, balancedbudget but you've got to do it my way or, gee,if you could just change this and that andperhaps not even address Medicare and leave italone for a while and, maybe Medicaid, don'tput too much burden on us on Medicaid, but wesure would like less strings; and, yes, onWelfare we have heard you. You have told us,let us run Welfare and we will make sure, assome of you are already trying to do, thatwe'll put jobs back into the vocabulary ofWelfare, and we will stop Welfare from being away of life and we'll try to make it a stopoverpoint for some assistance and help, but notgeneration after generation and a status +hat,one can expect. You said that.

And now I tell you today the ball's inyour court, and I want to urge you right upfront to get your act together as Democrats andRepublicans and come and help us on Medicaid.Come and help us. I asked both Bob Packwoodand the staff who run the Finance Committee in

42

the United states Senate and they said thecommunication on how to get Medicaid undercontrol is sort of nowhere.

Now, frankly, for you Governors who wantto say, well, we want the federal government tokeep on running it, we just want a little morelatitude ourselves and, gee, we're kind ofworried about how this whole thing is going topan out in terms of what we get out ofMedicaid, let me share a couple of thoughtswith you. Number one, no matter how hard youtry, no matter how hard the President of theUnited states tries, no matter how anyone thatdoesn't want to change the status quo tries, tosay let's get a balanced budget but let's don'ttouch Medicaid and let's don't reform Medicare,that is an oxymoron. You cannot get a balancedbudget without causing Medicaid to spend lessmoney over the next decade. You cannot get abalanced budget and keep Medicare solventwithout reforming it. And to reform it is notto cut it, it's to make it modern and make itmore efficient and see if you can't in theprocess by giving seniors more choice, savemoney.

•

43

You're all aware that we are saving moneyin most sectors of health delivery in America,and there are still some status quoists who aresaying, well, let's wait and see, is it reallyworking. Is American business getting healthcare costs down from 12, 14, 18 percent annualgrowth to 2, and 3 and 4? Is that real? Someare saying just wait a few years, it just won'twork, but it will work. It will work. The feeper service as an exclusive way of deliveringhealth care to the American people is gone. Isgone because it is great delivery, but it isthe most expensive delivery and the mostexpensive use of talent that you could ever putin any important delivery system for people.Yet, guess what? The two major federalprograms that are out of control areessentially pay for service programs. You maybe lucky -- is Tennessee here? Where's th'Governor? I've been to your state~ You arevery fortunate. I don't know what miracle cameabout to the federal government, but theygranted you some enormous waiver. I don't knowif the other states are getting that waiver,right? What's your state? Tennessee? Yes.

44

In any event, you're turning the whole programof Medicaid over to HMOs, and managed care andlarge pools that are delivering service, andwhile it's not perfect -- I heard one of thgreatest surgeons in your state at a publichearing say -- great neurosurgeon, either headof the medical society or second, I thought asI watched him, boy, there's a real doctor.What did he say? Senator, I reget to tell you,but pay for service won't work. You've got tochange it. And we're changing it and we'lllive with it, we'll get.by.

This isn't technical talk. This meansthat in America you build a health caredelivery system about everyone having theabsolute right to choose a doctor and thedoctor having the absolute right to run hisoffice ab~ut his patients without any regard tothe larger community of needs, or the poolingof resources and all kinds of things that weknow are eminent. So, look, Medicaid costs aregoing up at 10 percent a year. You know,Governors, it's not a program; it's 24 programswith all kinds of strings and then you'resupposed to run it. Look at your own budgets.

45

The fastest growing item in the state budget is,Medicaid. In fact, many Governors are

wondering if you leave things alone whether youcan pay for it in three or four years. That'san honest truism. So, to sit around -- I'm notsaying any of you are because I assume you'reall converts, I assume you're all for change, Iassume you're all for a balanced budget if youhaven't been for a long time, but the truth ofthe matter is you ought to be worried aboutyour own budgets if we leave Medicaid alonebecause where are you going to get the moneyfor a program growing at the national level at10 percent a year and compounded, and littletiny waivers here and there, and keeping afederal government there in charge just becausepeople don't believe Governors and states willreally take care of the poor ~eople if you givethem the money.

I submit to you you ought to join intrying to get at least a five year entitlementprogram. And let me stress that. SomeGovernors say, will we get the money? We'llcreate a new entitlement. It won't be apersonal entitlement, Governors. It will be

46

the entitlement to the state. So, the State ofIndiana, Governor Bayh, will get a given amountof money each of the next five years and thenwe'll look again, and that won't beappropriated each year. And, frankly, it's notall so bad in terms of numbers. Instead of 10percent, you get 8 percent the first year asthe national pool of money. NOw, what wedidn't know, Governor Bush, when we decided totalk about this, we didn't know the formulawould be hard to put together, but as you talkabout your own states you should have guessedit because some of you states have beenfantastic in harvesting the Medicaid program.Isn't that a nice word? Harvesting theMedicaid program. You have done tremendouslywell. And some states, I don't know why,didn't harvest it very well. Maybe some statesdidn't want to spend so much of their money,but the reality of it is we're now at a pointwhere we're going to start over with a newprogram and give you money, and hopefully whenthe debate is finished with, as the Governor ofmy state said, few strings -- we'll debate thatone out on the floor. Some Republican Senators

..'

47

have a different view. My guess is, and I'mnot a great predictor but sometimes my hunchesturn out right, I believe we'll pass it. If wepass a Medicaid reform, it will be a no stringsMedicaid program, excepting for maybe a couple.Of course, you all expect it to be challengedto be used only for the poor, don't you? Youdon't expect to use it for highways like somepeople say you're going to do. Ridiculous.But you might have to take care of women,pregnant women and children first in total asyou set your new profiles of who you want totake care of, that wouldn't be so bad, but weneed some help. The newest formula in thesenate tries to take all of the states that getin very large amounts of money. New York hasa very heavy program. They put a lot of moneyin. They have some fantastic people gettingother money in Medicaid, all of which is nowpart of what they expect. I believe the newformula will hold you harmless but will takestates that are growing faster than New Yorkand haven't harvested the program so well anduse one little pot of money, perhaps $800Million out of a giant program, and say let's

•

48

equalize that a little bit for states likeTexas. I'm sorry my friend Lawton Chiles isn'there. Florida is one of those states too thatobviously has a low current receipt of moneybut has many, many people entitled. So, theformula looks reasonably good. This is theWelfare formula.

NOw, we've got to look at somethingsimilar in the Medicaid formula, somethingsimilar, and we need your'help. I'm sorry forusing Medicaid there. That was all Welfare,that new formula.

NOw, let me suggest that the federalbudget is an interesting thing, not likeanything you all call budgets. The federalbudget is a brand-new creature of Congress. Wepride ourselves in the Senate of being thisinstitution with these 200 years of precedentand rules. Twenty-Two years ago the unitedStates Congress decided that once a year weought to produce a blueprint of what we'regoing to spend, and we call that a budget. Inthat same law, believe it or not, Governors,there was a recognition that in the unitedStates Senate even a budget might be

49

filibustered to death. And there was arecognition that even the bills implementing abudget might be filibustered to death. So, onSeptember 22nd, which is the return date forall of the committees to bring us their lawchanges for reconciliation, their changes inMedicare as a formula, their changes inMedicaid as perhaps a new grant with very fewstrings, and we'll build a new five-yearentitlement, and perhaps Welfare reform in sommanner that you're now hearing and that I'vealluded to, and many others. Perhaps youshould understand that on that date when thatpackage of bills is returned to us -- and,incidentally, those who are worried about taxcuts, you balance the budget first, for allthose bills come to us and if we can't get areading from the Congressional Budget Officethat we're in balance, there will be no taxcuts. That's the way it is.

(Applause)That's the way it's written. That's the

way it came out. Now, let me finish this. Onthat date when they bring us those bills, theBudget Act -- and Senator Robert Bird helped us

so

write it, he said if you want to make it work,I'll help you make it work, except he had noidea we would use this part of the law for thiskind of thing, I'm sure. I'm not sure he'dvote for it again because $642 Billion inchanges in the law, that is what we'll spendout in these programs over the next sevenyears, $642 Billion less than what was plannedin those laws will be before us. And guesswhat? If that bill comes out of committee,there is no filibuster; in fact, we wentoverboard. Twenty hours of debate and it'sover, no amendments except strike amendments.So, it's a real opportunity to change thedirection of the country without which we couldget nowhere in the United States Senate.

Now, let me give you one last figure onentitlements because that $642 Billion kind ofstands out there and people say, gee, what areyou doing to us? That's out of an entitlementset of programs that equals $7.2 Trillion,okay? The 642 is off a base of $7.2 Trillion.You do your own arithmetic. You all know. Youdo that, that percentage of reduction inbudgets all the time in difficult times. It's

51

percentages within the reach of almost anybodythat changes government. In fact, Governors,contrary to all the talk about how Draconianthis balanced budget is, your nationalgovernment will continue to grow at 3.2percent. It was growing at 5.2 or 5.3, so overthe next seven years it will grow annually at,let's just use round numbers, at 3 percentinstead of 5. Now, I would think that if wewere just to ask Governors to get to a balancedbudget in seven years, we've got to say to ourbig $1.5 Trillion government, you've got togrow the next seven years at 3 percent insteadof 5, and we said to you all, is thatreasonable, I wouldn't think a single one ofyou would say it's unreasonable. But the pointis the entitlement programs of the country arethe programs that are spending us intobankruptcy, and if we want to fix the futurefor our kids, we've got to decide as grown upadult leaders that we can't buy so much morethan we can afford; that we can't continue topromise to Americans what we really can'tafford.

(Applause)

52

(

Now, you can help us in a lot of otherways. Why don't you wait until the end andthen really do it up.

Now, let me close because some of you I'msure are saying, well, why can't we work thingsout, huh? Well, let me say you're going to behearing from the President, you're going to behearing from Senator Dole. Obviously, I speakfor neither of them, but let me suggest, thePresident of the United states said to thepeople of this country and the Congressunequivocally and forcefully, no more smoke andmirrors in budgets, paraphrasing. No moresmoke and mirrors in budgets. Use theCongressional Budget Office to determine thestatus of the federal budget today and theprediction for the future. Independentccnqress Icnat Budget Office. No more use ofthe White House, no more use of outsideeconomists; use the Congressional BudgetOffice.

Now, friends and Governors, that was onlytwo years ago. In June, the President hastilysaid he was giving us a balanced budget. Thetruth of the matter is he abandoned his own

53

rule. I'm just being honest and truthful toyou. If we were to have done that with aRepublican President and said you use OMB andtell us how to put our budget together so it'sin balance, in years past when it waspredominantly Democrat in terms of Governors,you probably would have sent us a resolutionsaying what are you up to? Well, the Presidentsent us a budget that isn't in balance thatuses the Congressional Budget Office, and ifyou ask me how do we get started in gettingthis thing together and working it out, Isubmit the President of the united states mustproduce his budget off the congressional budgetstarting points, not one that the White House'sOMB puts on the table. For how can wenegotiate when we're negotiating off ofdifferent numbers, when one set of numbers isfrom the agency and entity he told us to useand now he chooses another? Now, is itimportant? Of course it's important.

The President gets about 30 percent of hisMedicaid savings without a policy change,merely assuming that things are going to getbetter. Let me repeat. About 30 percent of

•

54

the President's Medicaid savings comes from anassumption that things will get better and wewon't spend as much, but no policy change. ThePresident does the same on Medicare; that wedon't need so much reform because about 30percent of the savings come from just using anew starting point with no policy changes.

This budget, the fundamentals of whichcame out of my committee that a dedicated,diligent staff put together, is true, honest,forthright, and no smoke and mirrors. Now,frankly, if you're talking to the President,you ought to tell him, Mr. President, -startwith the same starting point, let the chipsfall where they may, but go to the Congress ofthe United states without a phony budget thatOMB did instead of the Congressional BudgetOffice.

Point number two. This will probablyshock you, but the President has now threatenedto veto every appropriation bill. Just as anaside, I say to some of you, I don't know thatI remember every appropriation bill in my 22years, I say to my friend, Governor Thompson,but I don't remember a President threatening to

•

55

veto appropriation bills because they didn'tspend enough money.

Now, that's the case and that's hisprivilege, but let me tell you the dimension ofthe nondefense domestic appropriation argument,will you? Let me tell you how big the argumentis. For the President threatens to veto everyappropriation bill. Guess how much thedomestic appropriation bills, how many dollarsunder the Republican buaget resolution, howmany dollars are they less than 1995? Guess.$8 Billion. In other words, if you were togive the President exactly the same amount ofmoney as he had in 1995, you would give him $8Billion. Would you have guessed that? Wouldyou have guessed that this whole argument isover $8 Billion in a $179 Billion domesticappropriated account~?

So, rather than talk about vetoing everybill, why don't we talk about the $8 Billiondifference? Now, essentially the President maysay I wanted an increase, but that isn't what Iheard him say when he produced the budget. Hedidn't say it was being increased; in fact, Ithink he said it was being cut. NOW, those two

(

56

things are very important.Unless we want to end up with a train

wreck, no appropriations, a continuingresolution, and worst of all throwing away thereal opportunity to address this issue of theunbalanced budget, then we have left the statusquo on the table for the future. And, frankly,you are all good politicians, you might evenbe, each and everyone of you, better than I.You might be as good as the President, maybebetter, but I'm not sure it helps the Presidentof the United states to have to veto every billand let the government close down. I suggestthat some of you might ask him to think aboutit along the lines we've just discussed, butthe most important thing, Governors, is that wehave a real chance to change our country forthe better and to do that in a rarher permanentway. And, most interesting, talking here toyou, this whole idea is a vote of confidence inthe Governors of our sovereign states. Thewhole notion is a vote of confidence in theGovernors of our sovereign states. You've kindof asked for it. You've sort of been tellingus you want it, and it's just not easy to do it

57

unless you're willing to change some things.In conclusion, I guess it's fair to say

that some people wonder why I feel so strongabout this issue, and I must say to you all,it's not an easy one to give this kind ofspeech about. Who can give a speech on thebudget and keep the 43 Governors listening thislong unless you really believe it, and Ibelieve it because I think every now and thenin the course of political leadership andhistory you've just got to do some importantthings, and this one is for adult politicians,this issue; for grown up men and women, to lookright in the face of the absurdity that thiscountry is so powerful that it need not worryabout whether it can afford what it tells itscitizens it will buy for them. I think thetime is now. Thank you very much.

(Applause)GOVERNOR DEAN: As the Chair, I'm going to

use my prerogative to ask the first question,and that is this. We all accept the spirit inwhich you come because we have a seriousproblem, and I admire very much the passion,Senator, that you show on the issue of the

58

balanced budget and we are as an organizationin favor of a balanced budget, and I am notknowledgeable enough about the federal budgetto debate the CBO versus OMB debate, but thequestion that I have, and let me just be veryfrank and this is, again, in the spirit of thecriticisms that you gave which I believe arenonpartisan criticisms; I believe they'redeeply felt, compassionate criticisms, but Ithink one of the reasons the President hasthreatened to veto the appropriations bill hasnot so much to do with spending, in some casesit clearly does, but in some cases it has to dowith a social agenda which does upset a numberof us. In fact, frankly, one of the reasons Ihave said that I admire your work so much isbecause that social agenda was absent from thebudget mark which you put forward. So, Iwondered if you would comment on a way that youcan see clear because I believe thisdisagreement that we have between the partiesover the budget could be resolved more easilyif, in fact, we were concentrating more onbalancing the budget and less on pushingthrough a certain social agenda. And maybe you

59

could comment on that.SENATOR DOMENICI: Sure. Sure, Governor.

First of all, let me try to put this so-calledsocial agenda into perspective. , I wouldassume, Governor Dean, you're not speakingabout whether we reform Medicare or Medicaidbut, rather, some of the things that the Househas been putting on appropriation bills.

First, I would think maybe thePresident is he speaking tomorrow or thenext day? I would assume he too would talkabout the appropriation bills having an EPA,substantial reductions in EPA, maybe 20 riderson about regulatory form, but let me make itclear. That's a relatively new issue becausthey've only been putting those things on forthe last week or so. So, I think thePresiQent's basic objection that he would vetothe appropriation bills have little to do withthat, it may have more to do with it now andthat's fine, but I think it really had to dowith the President wanting more spending incertain programs that we seemed we were goingto give him, but let me suggest this attachingto the appropriation bill. Major changes in a

60

regulatory system of the country or in a wayanagency is supposed to do business, in theSenate they are the exception rather than therule. I would not think that many of thosewould get through the Senate, but I have greatdeference to the House and how they've donethings. They're hard working and, frankly,they're trying to achieve some goals andthey're setting some real high goals forthemselves, but I believe many of those can beworked out, let me just put it that way.without any question in my mind, many of thoscan be worked out. Anybody else have aquestion? Senator Lawton Chiles, did you getmy note there?

GOVERNOR CHILES: I got it.SENATOR DOMENICI: I told him he should be

here to listen si.....ce I used to listen to himwhen he was chairman. But I'm so pleasedyou're feeling great. You look wonderful.

GOVERNOR CHILES: Thank you.SENATOR DOMENICI: Anything else? Yes.

Governor of Colorado.GOVERNOR ROMER: Senator, you and I have a

state that's next to each other, and I join in

61

the commitment to balance the budget. I alsojoin in the commitment to share a part of thecost of the Medicaid reform and reduction. Iknow, however, that health care is somethingthat transcends state boundaries. As we talkedabout the national ultimate reform of thissystem, portability is important.

I am aiming at an issue of maintenance ofeffort here on Medicaid. I don't want to get acondition where if the federal government endsthe partnership and says this is ourcontribution, it's now yours and you can dowhatever you want with it, we don't carewhether you continue to maintain an effort orcontribute, I don't want to have your state andmy state playing games with each other aboutracing for the bottom so that we can attractjobs but have all the poor float.over the nextborder.

Do you have any suggestion as to how wecan avoid this race to the bottom problem andavoid one state competing on job creation withgetting the least cost to care for thedisfortunate, the misfortunate? I just believethat somehow in the end of this we've got to

62

have a way in which the states maintain someform of partnership with you so that we can'ttotally be irresponsible and start sendingpeople over the lines with bus tickets. Isthat a problem and, if so, what is thesolution?

SENATOR DOMENICI: Well, if it's aproblem, it's a problem right now and it's ahuge problem right now. State of New Yorkdecided in the area of Medicaid, in the area ofWelfare reform, Medicaid -- Welfare andMedicaid, the State of New York decided thatthey want a very big program. They tookadvantage of every option.

GOVERNOR PATAKI: Harvested.SENATOR DOMENICI: And more. The Governor

said my words good. They've harvested theprogram well. I don't know that that's been ~nadvantage or a disadvantage to New York withreference to jobs. My guess is a disadvantage.

GOVERNOR PATAKI: Disadvantage.SENATOR DOMENICI: But I don't know that

you could have told Colorado or New Mexico inorder to inhibit that you ought to do what NewYork's doing. First of all, you couldn't have

63

afforded it. I believe they've had a taxincrease for almost every year, for how long?

GOVERNOR PATAKI: Not this year.SENATOR DOMENICI: Except this year. I

didn't want to say that. So, Governor, I don'tthink that we can have a similar Medicaidprogram in each and every state. What I wasworried about is that some states, and I saythis about Florida even though I'm not fromFlorida, and Texas, frankly, if you tookMedicaid and Welfare and just apply a formula,let's give them what they're getting now,frankly, that's not a very good deal for themin block grants. They'd be put in the positionof going to the bottom and people might bemoving there for that reason. I don't know,but we will probably give them more under thenew formulas. Do you all want a maintenance ofeffort on Medicaid? I guess that's a questionfor you all. There is no maintenance of effortin the Welfare reform. Do you want one inMedicaid? I'll put that on the table and youall discuss it. If you keep a maintenance ofeffort, it keeps you kind of in the game to arelatively similar amount that you're putting

64

in now. That might be something good. I thinkwe should have it, Governor, but I might not bein predominance in the Senate. okay? Yes,Senator, Lawton.

GOVERNOR CHILES: Pete, you and I used towork on the balanced budget proposals for manyyears, and at times we had two or three plans,and I think you were in agreement, only that wecouldn't get passed at all. It seems to methat in those days -- and, of course, we weretrying to balance it within three years, Ibelieve, but the deficit weren't anywhere nearas big at that time as it is now, but it seemedlike there were a couple quotients in therethat I see missing now a little bit. We usedto talk about part of the money would come outof the discretionary programs and theentitlement programs, and part of the moneywould come out of cuts in defense and part ofthe money would come out of tax increases. AsI look at it now, I don't see anything comingout of defense. Maybe we're in a more periloustime than we were back then. Russia was stillthe evil empire at that time, but we were goingto nick defense and we were talking about

65

increasing taxes. NOw, we're taking it all outof the discretionary entitlement program,nothing out of defense, and we're going toincrease or give a tax decrease. Looks likethings have changed a little bit.

SENATOR DOMENICI: Yes, except thingshaven't all been status quo since you left andsince you debated. First of all, thePresident's first budget had a very large taxincrease. I would assume that tax increase iswhat you and I would have been using to put abalanced budget together, very big taxincrease. Some think it was okay because ofwhere it fell, but it's still a very large taxincrease, so I think we've had the taxincrease. What we haven't had is we haven'thad the fiscal restraint side. We did verylittle, if anything, of a permanent nature i~entitlements in that first round that thePresident put together and won on a partisanbasis, and we didn't do an awful lot withdiscretionary either. What happened is overthe last six years or seven the only programthat's appropriated that got any significantcuts has been defense. Now, how far do you cut

66

it? Some would say cut it another Five or SixBillion, but essentially it's about 40 percentless than it was eight years ago, and maybe itshould be more, but we surely haven't even cut15 percent out of the rest of the programsduring that same period of time. So, I thinkthat's a change.

And let me just take two minutes toexplain the difference in the tax cuts. Firstof all, I think it's inevitable that theRepublicans will be accused of trying to reformMedicare and Medicaid and give the rich ofAmerica a tax cut, but the truth of the matteris in the United States Senate there still is aresolution saying that if we do tax cuts andthey are not binding, the Finance Committee cando them after they balance the budget. We holda bill in abeyance, cut a bill in abeyance, andsend them the tax money. They don't have to doit. But if they do it, we have said 90 percentof the tax reductions should go to $100,000wage earners and less. But we are committed tocapital gains, and we'll have to defendourselves on capital gains somewhat falling inthe hands of those who have money, but I

67

belLeve capital gains can stand on its own assomething that really is good for the Americaneconomy. And you ought to be doing 'a budgetthat is growth oriented. And I'm not a supplysider who feels that you can cut taxes all theway to zero and still have a thriving economy.You'll have a great economy, but you won't haveany money for programs. So, I think you've gotto take care of the deficit, too, at.the sametime, but I do think capital gains ought to bepassed, and this is the rare opportunity to getit done. Yes, Governor.

GOVERNOR ENGLER: I'm interested in theMedicaid formula fight that's going to I guesscome along after the Welfare bill. And itstrikes me, if the math I've looked at iscorrect, we're going to have about, over thefive-::.'aarperiod from '96 to the year 2000,about $773 Billion in new spending in Medicaid.So, when we look at it from that standpoint,what we're trying to do, if we take every stateas sort of where we find them today and moveforward, we've got to solve the spending issueswith about three-quarters of a trilliondollars.

68

SENATOR DOMENICI: That's right.GOVERNOR ENGLER: It seems to me that th

model that has been worked out on the Welfarbill, which I support and which you alluded totoday, does sort of serve as a starting pointfor resolving the Medicaid debate. It seems tome it's a lot easier to do that almost withthree-quarters of a trillion dollars in hand ofnew spending over the next five years than itwould be if we were talking about holding itharmless, and it does mean growth rates have tochange, but I think it works. And so I justwant to compliment you on the leadership andperhaps address that question and related toit, the reference specifically to Florida andTexas, I guess Arizona would be one,california, the alien problem, in fairness,that has to be pull~d out of this in the sensethat it really isn't the ability to control theborders in those states primarily, and Irealize there are other states as well, but itisn't really fair to say to Oklahoma, let'ssay, that you've got to pitch in to pay for thealien problem of the federal government notcontrolling its borders.

69

SENATOR DOMENICI: I don't think we'vedone that, Governor. You might have a betteridea than the people putting it together. Atleast what we put together so far is Welfare,and maybe we have to put something like thattogether, more so on Medicaid.

GOVERNOR ENGLER: Yeah.SENATOR DOMENICI: Okay. I don't know if

anybody's doing that, but that's a good idea.It ought to be discussed. You all ought tokick that around too.

GOVERNOR ENGLER: It seems to me it is aseparate question. I mean, there is a cost toit, but to say that cost is somehow covered inwhat would have been the economics of thesystem I think is a dubious proposition.

SENATOR DOMENICI: Yes, Governor?GOVERNOR TUCKER: Senator, just to help m

get back up to date on the budget, what is thesize of the budget that your committee hasproposed, how much of it is for interest, howmuch is for defense, how much is for tax cuts,and do I understand that Social Security andMedicare are all in the budget? Do Iunderstand that correctly?

70

GOVERNOR DOMENICI: Let me first say, by acommitment that seems to be bipartisan, SocialSecurity is not only off budget but is notbeing changed.

GOVERNOR TUCKER: And that includesMedicare?

SENATOR DOMENICI: No, sir.GOVERNOR TUCKER: okay.SENATOR DOMENICI: Social Security is

Social Security, and Medicare is Medicare, andI understand some would like to tie themtogether and some will, but here's the budgetat this point. Defense is 270; nondefenseappropriated, 278, for a total that'sappropriated every year of 548. On themandatory or entitlement programs, SocialSecurity, which is not only off the table butnot touched, is 334; Medicare is 158, that'sboth Part A, which is a trust fund and, Part B,which is a taxpayer funding of insurancepolicies for seniors; Medicaid is 89; and allthe other mandataries, including commoditycrops, pensions and the like is 166; the netinterest is 235. The total outlays to all ofthat is $1.5 Trillion. The revenues are 1.355.

•

71

So, that's it. I don't have those inpercentages, but I think you get a picture ofit.

GOVERNOR TUCKER:SENATOR DOMENICI:

Thank you.Thank you all very

much.(Applause)GOVERNOR DEAN: Senator Domenici, we

deeply appreciate the time that you took tocome and talk to us, and you leave us as youcame. I don't agree with everything thatyou've said today, but you certainly retain myimmense respect for what you're doing for thunited States of America. Thank you very much.

SENATOR DOMENICI: Thank you, Governor.(Applause)GOVERNOR DEAN: The National Governors'

Association has had since 1976 an awardsprogram that has been a tradition, and itrecognizes distinguished service. We havetoday three people in the state officialcategory, three in the private citizen categoryand one each in the artistic production andarts supports category. I want to thank theGovernors who submitted nominations for these

72

awards. The nominees were outstanding. Iwould also like to thank Jeannie Van Blanderenwho chaired the Selection committee as well asother members of the committee. I would ask asI announce each award winner if they and theirGovernor would come forward so that we canpresent them with the award. The Governor ofhis home state will do the presentation. Wewill have the photographer off here.

The first in the state official awardcategory is from North Dakota, and if GovernorSchafer and Leon Osborne, Jr., could come up.Leon Osborne is the director of the Universityof North Dakota's Regional Weather InformationCenter. Mr. Osborne has devoted his life toeducating students about atmospheric science,developing forecasting systems that benefit thecommun~ty at large. He established theRegional Weather Information center as a way toaccurately inform the public of danger on a24-hour basis. Governor Ed Schafer has said,"Leon Osborne has made North Dakota a betterplace to live and to work in many ways." LeonOsborne.

(Applause)

73

From the state of Utah, if GovernorLeavitt and Janina Chilton could come forward.Janina Chilton is the legislative liaison withthe Utah Department of Human Services. For 30years Ms. Chilton has played many differentroles as an advocate for the mental healthcommunity. Ms. Chilton has educated thegeneral public, produced media campaigns,developed a library for use by the mentally illat the Utah State Hospital and consistentlysecured funding for it. Governor Leavitt hassaid that, "Janina has been a key player inbreaking down barriers and stigma surroundingthose with mental illness." Let us all welcomeand recognize Janina F. Chilton.

(Applause)Next from the great State of Vermont, and

if then Howard Dean "~uld come forward with ConHogan, Cornelius Hogan, the Secretary of theVermont Agency of Human service. When statehealth care reform efforts stalled in 1994, Constepped in as the acting Chair of the VermontHealth Care Authority, continued the struggle,engaged all parties in working discussions. Igive credit to Con for helping to advance

74

Vermont's landmark health care reform which,when implemented, will elevate Vermont secondonly to Hawaii in the percentage of residentscovered by health insurance. Con has had adistinguished career in the Human Servicesfield and, in addition, for years excelled inthe private sector as a Chief Executive Officerhere in Vermont. I'm fortunate and proud tohave Con Hogan heading one of my largest stateagencies, and I'm personally thankful for hisefforts to assist me in the advancement of mypriorities. I would describe Con as a giantamong his peers.

(Applause)The National Governors' Association also

honors private citizens who give of their veryspecial talents and resources to serve theirstates. Almost always their servirgs arevoluntary and without pay.

The first of these awards is to Peter B.Bensinger, Chair of the Illinois CriminalJustice Information Authority, and if he andGovernor Edgar could come forward.

Mr. Bensinger has contributed countlesshours and efforts towards better criminal

75

justice, including summer camps, fund raising,research, juvenile protection and Illinois Billof Rights for Prisoners. Governor Edgar hassaid, "Illinois citizens have benefitedtremendously from Peter's unselfish donation ofhis time and expertise." Let us welcome andcompliment Mr. Peter Bensinger.

(Applause)From Indiana, if Governor Bayh and Linda

Ann Wallace could come forward. Linda AnnWallace is a community activist and founder ofSecurity Dads Program. Ms. Wallace created theSecurity Dads Program as a wpy of combatingviolence in her neighborhood's high schools andinvolving parents in their children's lives.In the program fathers don black and goldSecurity Dads T-shirts and attend dances,athletic events and other school functions asmonitors. Governor Bayh has said, "Linda AnnWallace and the Security Dads Program are idealexamples of local citizens who are taking theinitiative to improve their schools,neighborhoods and communities with parentalinvolvement, hard work and commitment." Let usplease recognize Linda Ann Wallace.

•

76

(Applause)From Ohio we have Robert Wehling, the

co-founder and co-chair of BEST, BuildingExcellent Schools for Today. And if he andGovernor Voinovich could come forward.Although his full-time job is in business,Mr. Wehling has devoted much of his life tochildren's advocacy. He is a member of theGovernor's Education Management Council, OhioFamily and Children's First Initiative andco-founder of BEST which enlists business,education, labor, religious and politicalorganizations to help in the grass-roots levelof education reform. Governor Voinovich hassaid, "Bob Wehling is always ready to stepforward and lend a helping hand, a hand thathas no strings attached and it is always largerthan one would ever expect." In addition, Ipersonally want to thank Mr. wehling for allhis work with the National Governors'Association.

(Applause)Every year the National Governors'

Association gives awards for distinguishedservice to the arts, both for artistic

77

production and for support of the arts, and I'dlike the thank Susan Bayh for chairing the ArtsReview Panel this year. The ArtisticProduction Award goes to Ms. Ann Chotard -- Ihope that's pronounced properly, is that right?She is the founder and artistic director ofArkansas wildwood Park for the Performing Arts.Ms. Chotard possessed the creativity andinspiration needed to develop wildwood Park forthe Performing Arts. Governor Jim Guy Tuckerhas said, "Without Ann's enormous devotion tothe promotion and advancement of the arts,Arkansas likely would not have such a facilityfor the Performing Arts. We would still haveour share of writers, actors and musicians, butArkansasans have Ann Chotard to thank forinspiring and educating us about the beauty ofbecoming p~trons of our state's creative and .talented artistic community."

(Applause)And, finally, we have the Arts Support

Award to go to Mary Duke Biddle Trent Semans,philanthropist and supporter of the arts, andif she and Governor Hunt could step forward.

Since 1965 Mrs. Semans has been the

•

78

Chairman of the North Carolina ExecutiveMansion Fine Arts committee, a group dedicatedto preserving the legacy of the Governors ofNorth Carolina. Mrs. Semans was instrumentalin establishing the North Carolina School ofthe Arts and the first permanent art galleryfor the blind in the North Carolina Museum ofArt. Governor Hunt has said that, "In everystage of her life Mary Duke Biddle Trent Semanshas chosen public and private paths to supportand nourish the arts. Her stewardship,philanthropy and commitment to excellence haveinfluenced the arts in North Carolina. and inour nation." And I might add parentheticallythat Mrs. Semans and her husband have taken agroup of North Carolina student musicians totour Europe every summer and perform concerts.She was on such a tou~ when she received newsof this award and has left that tour early tobe with us tOday. And we thank andcongratulate her.

(Applause)We now have a Governors-only discussion of

Medicaid and that is a closed session, so theif the spectators and guests would like to step

79

outside and enjoy the unbelievable Vermontweather, we would appreciate that, and we willthen convene immediately the Governors-onlysession on Medicaid and other topics. Thankyou very, very much.

•

80

CERTIFICATEI, Cindy B. Hall, Court Reporter and

Notary Public, certify that the foregoing pages3 - 79, inclusive, comprise a full, true andcorrect transcript taken from my stenographicnotes taken in the Opening Plenary Sessiontaken before me as Notary Public on sunday,July 30, 1995, 12:00 noon, at the SheratonBurlington Hotel & Conference Center,Burlington, vermont.

Cindy B. Hall


NATIONAL GOVERNORS' ASSOCIATION87TH ANNUAL MEETING

JULY 30, 1995 - AUGUST 1, 1995BURLINGTON, VERMONT

PLENARY SESSION/EXECUTIVE COMMITTEE MEETINGMONDAY, JULY 31, 1995

9:30 A.M.


COURT REPORTER: Lisa M. Hallstrom, RPR, CP


Montpelier, VT 05601(802) 229-9873

2

INDEXPAGE

SPEAKERS:Howard Dean, M.D., Governor, Vermont, Chair, •••.••••• 3

IntroductionTommy G. Thompson, Governor, Wisconsin, ••..••....•.•• 5

IntroductionSenator Bob Dole, Kansas, Majority Leader, united ••.• 7

States SenateExecutive Committee Business ..••.•.••.••••••.•••••••• 30

3

GOVERNOR DEAN: Good morning. I trusteverybody enjoyed the typical Vermont weatherthat we had last night at Shelburne Farms. Whave that every day in the summer. In thewinter it's about 30 degrees cooler with snowon the ground, but perfectly clear and noclouds.

I want to take a moment before we start tothank the corporate fellows. NGA has 100corporate fellows who support the work of theNational Governors' Association on a yearlybasis, and we deeply appreciate their support,their help in this event and their ongoingsupport of NGA. And I'd like a round ofapplause for the corporate fellows for theNational Governors' Association.

(Applause)We have a busy Jay today. We have the

Majority Leader of the United States Senate whowe're going to hear from in a moment. We havethe President of the United States. We willhave a Governors-only discussion to continueour deliberations on Welfare and Medicaid, andthe NGA standing committees will meet shortlyafter the Majority Leader's address at the

•

4

Radisson to discuss the various issues beforethem and the resolutions. I do want to justwarn the chairs of those committees thatsessions really do need to start on time andend on time in order to make the logistics worktoday; otherwise, we're going to end up cuttinginto probably the Governors-only session. Ithink we had an excellent session yesterday.We'd like not to cut into that any more than weabsolutely have to. I also want to say howvery important it is for us to be on time hereat the Sheraton when the President is scheduledto speak. Because we have had to move thataddress because of the heat, it's going to beextraordinarily important that people are ontime because there are going to be specialseating restrictions, and in order to get thatsorted out by the time the Presi~ant is hereand ready to give his address, we need to be ontime.

I would now like to calIon the ViceChairman, soon to be Chairman of the NationalGovernors' Association, Governor Tommy Thompsonof Wisconsin, to introduce our very specialguest, the Majority Leader, this morning.

•

5

Governor Thompson.(Applause)GOVERNOR THOMPSON: Thank you very much,

Chairman Howard. It's really a distinct honorfor me to have this privilege to introduce afriend of all of ours, Senator Bob Dole. BobDole's record of leadership and statesmanshipis well known to most of us in this room. Hisrecord in the Senate once inspired RonaldReagan to say, "His title of leader is not justa job title, it is a description of the man."And today he's helping to lead the way insending more responsibility and more power backto the states.

The Founding Fathers understood that thestates have to be and we are, certainly, thelaboratories of democracy constantly innovatingand seeking new solutions to local needs.Senator Dole is determined to breathe life backinto the 10th Amendment which declaresunequivocally that those powers not assigned toWashington are reserved to the states or to thepeople.

Senator Dole knows that the stategovernments are as committed as anyone in

6

Washington to the health, the prosperity andthe security of our citizens. This faith inthe states is the source of his commitment toend unfunded mandates and to block grantprograms back to the states. And he has notbeen a Johnny-come-lately to this particularposition because in 1979 Senator Bob Doleauthored legislation to block grant manyprograms back to the states. Take Welfare forexample. No federal bureaucrat will everdesign a Welfare system that works equally wellin each of our 50 states. Why not tap the bestour states have to offer, tap their years ofexperience and come up with the best solutionsto suit different situations. That's a radicaldeparture from the way Washington has runthings up until now.

Senator Dole is also playing a leadingrole in setting the federal government's fiscalhouse in order. He led the way towards passingthis year's historic balanced budgetresolution. Governors have to balance theirbooks each and every year. Bob Dole is workingto make sure the federal government has to dothe same.

7

Helping to guide this revolution throughturbulent political waters we're very lucky tohave him in Washington right now, and maybesome day we'll see him on the other end ofPennsylvania Avenue. Ladies and gentlemen, itis my honor and distinct privilege to introduceto you our friend, the great Senator, Bob Dole.

(Applause)SENATOR DOLE: Thank you very much. Thank

you. I didn't quite understand. Governor Deansaid it was going to be hot when the Presid,ntwas here, but I'm glad I'm here in the coolerpart of the day. And I'm sorry I cannot behere when the President comes, but I'll be inWashington. I'll cover that for him while he'sup here.

I want to thank Governor Thompson for thatintrodu~tion which we worked out last evening,and he got it right the first time. Iappreciate that very much. And thank GovernorDean. Remember we had a plane ride back, gotwell acquainted here a few years ago, from avery tragic event in South Dakota. And Iwatched Governor Thompson and Governor Dean onC-SPAN yesterday and thought they did very

8

well. They had the Medicaid formula worked outand all those other things that probably won'tbe any problem at all with a group like this.

So, I'm very honored to be here and tospeak to you not as a presidential candidate,but that's how it will be reported, but as theMajority Leader in the united States Senateabout a very important problem. And I wouldsay, first of all, that I think it was RobertFrost who once wrote that the two best statesin the union were Vermont and New Hampshire,and the interesting thing is that he made thestatement even though he w~s not a candidatefor President.

So, let me begin as Tommy Thompson'salready said, to thank you again, Republicansand Democrats alike, for your assistance onunfunded mandates. :t started here a long timeago. It's never been a partisan issue. It wasnot a partisan issue in the Senate. It passedby an overwhelming vote. And, again, I wouldthank all of you. I worked closely withGovernor Voinovich and many others during thattime, and I would just say, as the Governorsaid, it sort of helps us take a look at the

9

10th Amendment which I carry around in mypocket. Newt Gingrich carries around theContract with America; I carry around the 10thAmendment. It's only 28 words in length,something I can handle, and it's not verycomplicated. It says precisely as the Governorindicated. If it's not reserved to the federalgovernment, the power should go to the statesand to the people. Whether you're DemocraticGovernors, Republican Governors or Democraticlegislatures, there's no distinction. In myview you're a lot closer to the people, and webelieve you can make better decisions orcertainly decisions as good as we can make asfar removed as we are. And I don't say that incriticism of Congress, but it just seems to methat we've lost track for the past 30 to 40years. We have had the power comir.~toWashington, and now we believe it's time toshift it back where we think it should be. So,I think we all agree regardless of party.

And I might say right up front that I'vetalked to President Clinton_privately aboutWelfare reform to see if there isn't some wayto bridge the gap, probably can't do that, but

10

there may be some areas we can find some commonground, but we have tried to replace inWashington now a paternalism of partnership.And let me say to every Governor, this is notjust lip service. We believe there is apartnership.

I met this morning with the RepublicanGovernors, had a good meeting for about 45minutes on an issue I'll talk about in amoment. And it's very important to us, whetheryou're a Democrat or Republican, if we can findsome common ground, it's going to make our joba lot easier and we believe it's going to makeyour job a lot easier. So, we listen toGovernors. I listen to my Governor, BillGraves, who's in his first term and long-timefriend from Kansas. But on issues likeWelfare, and crime and education we hope ~o domore. But it will not be easy. And PresidentClinton has said that giving you control wouldincite, "A race to the bottom." NOw, I wonderwhich states he thinks would participate insuch a race. Which states does he believecannot be trusted with Welfare, education andprotection of their people?

11

The truth is that only our states can betrusted with these things. Federal controljust hasn't worked. And the federal governmentdoes a lot of good things. And I've beeninvolved in a lot of it over the years, theChairman of the Finance Committee which dealswith all the health care, and trade, andMedicaid, Medicare, all the issues that I knowhave troubled Governors and troubled others.But we've experimented now for about threedecades at the federal level. Do our poorpeople have more hope after three decades? Arethe streets safer after three decades? Areschools providing better education for ourchildren after three decades of this federalpush?

If there's anyone who excels at findingbetter ways, I believe very honestly it's you,our nation's Governors, again, regardless ofparty. You know that every problem and everychallenge will eventually land on your deskbecause you're there. People know how to findyou, and they know that you'll respond, whichmeans you have to lead with innovation andimagination. It requires that you fight for

12

change and not just stay with the status quo.And I've seen that leadership at work in stateafter state, Democrat or Republican, whetherit's fighting crime in New York, or returningfact-based education in Virginia classrooms ormaking Wisconsin a national trailblazer inWelfare reform. And that's what I want to talkabout is Welfare reform.

Many people expected us to talk aboutWelfare reform. It's an issue that we're goingto take up in the united states Senatehopefully next Friday or next Saturday. TheAugust recess will occur sometime in August inthe united States Senate. Not going to giveany definite date, but we have to catch up alittle bit with the House. They have differentrules, and they move very quickly. And I'vetold the ~tory many times. I'll just digressfor a moment. When we were on the BalancedBudget Amendment, which we lost by one vote,Senator Robert Bird, if you watch C-SPAN,speaks frequently, and I say this withadmiration because Robert Bird knows more about-the rules and more about the Senate than all ofus combined, and more about Roman history than

13

most Romans. And I remember during thebalanced budget debate he was all wound upabout how bad this amendment was, what it woulddo to America. It was shortly after one of ourTuesday luncheons, and he went back to thefloor to talk about it, and he was sort ofgoing back from how bad the amendment was toRoman history. At one point he said, "IfCicero were alive today, he would be opposed tothe Balanced Budget Amendment." At which timSenator Thurmond arose and said, "I knewCicero, and he was for the Balanced BudgetAmendment."

So, we debate a lot in the Senate. OurFounding Fathers said we should be a moredeliberate body and, believe me, we've kept thefaith. We deliberate everything. We spendnine days on a bill th~~ passed the House inthree hours. But as many of you will be comingto the Senate probably, I don't want todiscourage you at all.

I think for many Americans, as we alltravel around our own states or around thecountry, the most graphic failure of thefederal government is Welfare. It is a point

14

where liberal rhetoric meets reality, and for along, long time, and I've been there, maybeI've voted that way from time to time, if youspend a little more money on Welfare, start anew program and waited a few more years, ourWelfare system would start to work. But ourWelfare system doesn't work, and the Americanpeople know it. It doesn't work because it'snot based on the classic proven Americanformula for escaping poverty: A job, a strongfamily, a good education, saving money to buy ahome.

Instead, our Welfare system underminesalmost every value and virtue that leads toself-reliance and success. It discourageswork, it penalizes marriage and traps people ingovernment-owned housing. The fact is thatthere are more people living in poverty todaythan before the great society was started.There can be no escaping the conclusions thatthe current system has failed. It's failed.It doesn't work. It will keep failing until wechange it, and change does not-mean justtinkering at the edges. And to quote someonewe've all heard about, Ross Perot, "It means

15

opening up the hood and totally overhauling theengine." And that's just what Congress, Ihope, will do.

And let there be no doubt about it, Ispeak now for Republicans. I can't speak forall the Democrats in the Congress, butRepublicans are committed unanimously toreforming Welfare. And I must say, and maybethe President's going to change all of thattoday, there is not a Democrat plan. There isan outline in the Senate, but not a plan.There has been, as you might have already read,vigorous debate among Senate Republicans. Wehave our differences too. This is a very toughissue. And we've tried to further strengthenour proposal, and I would just say to thisgroup that I think that we're now prepared togo forward. And we would hope that theDemocrats, maybe after I've left town andPresident Clinton has left town, that all theGovernors would sit down and talk about it asyou do in a nonpartisan, objective way and giveus your verdict on whether or not you thinkwe're headed in the right direction.

And let me just talk about our plan. The

16

President will talk about what he plans to do,but it's based on three guiding principles.

I think first the first principle thatought to strike home is that Welfare reformshould be designed and run by those closest tothe problem, the states. The states, theGovernors, the legislatures. The answer is notmore waivers. Governors should not have toplaya game of, "Mother, may I." The waiverprocess only perpetuates a flawed system. Yes,waivers have led us in the right direction, butnow let's finish the job. Real change onlywill occur when we are released from the burdenof federal rules and regulations. And onething about Welfare, as Governor Thompsonmentioned in his introduction, there is nobureaucrat, and I say that without criticismbecause they're good people, men and women, byand large, no bureaucrat or group ofbureaucrats are ever going to work out ablanket program which works equally well forall the 50 states because America is toodiverse to do that. And through block grantsto the states, not waivers, block grants to thstates, the federal government can provide

17

resources to fight poverty without imposingrules and regulations that ban innovation.

I believe it's time that we revive yourlaboratories of democracy. Give states theopportunity, wherever that state may be. Andthat's why we support changing this one sizefits all Washington Welfare into flexible blockgrants to the state level. Our proposal willcombine AFDC, child care programs under AFDCand job training programs under AFDC into oneblock grant. It will permit the states to optfor a food stamp block grant giving you evengreater discretion. The Governor makes thatdetermination under our language, not thelegislature but the Governor decides if youwant the cash.

As a result of the work of the SenateLabor Committee, we also consolidate and putinto another single program 88, and I've gotthe list of the 88 different programs, jobtraining and related educational programs,including the Job Training Partnership Act andthe Carl Pe:!_~~_lls__Voca_tJonal T:rainingand _Education Program, all into one block grant.Here is a list of 88 programs. I bet nobody

18

here can cite them all. That's how manyfederal programs, one after another, afteranother we think ought to be block granted togive the states' discretion.

Our second principle is that real Welfarereform must include a real, a real workrequirement which in no uncertain termsrequires able bodied Welfare recipients to finda job, not stay at home and not stay in atraining program forever, but to go to work ina job, hopefully in a real job in the privatesector.

When it comes to escaping poverty, we knowthat the old American work ethic was truebecause work works, but no longer will weburden you with the rules and requirements thataccompany the old JOBS Program. We have heardyour message from Democr~tic and RepublicanGovernors alike. We will repeal the JOBSProgram and let you design real work programs.You might choose to cash out a percentage ofyour food stamp benefits and supplementsomeone's wages. Under our proposal you willbe able to do that without a waiver fromWashington. You make the decision. You don't

19

wait months, and months and months for somebodyelse to do that.

Then our final principle is that noprogram with an unlimited budget will ever bemade to work effectively and efficiently;therefore, we must put a cap on Welfarespending, and we do that in our proposal. Forexample, our proposal will include a fixedamount for the former AFDC Program based onfiscal year 1994 expenditure levels, but incapping spending we will give you the neededflexibility to run the programs your way. Notour way but your way, Democrat or Republican.

Thousands of government regulations wouldbe wiped off the books with the repeal of theAFDC Program and the JOBS Program. We willgive you explicit authority for determiningeligibility and benefits. And traditi~nally,additionally, we also recognize there arestates, who through no fault of their own, willexperience population growth above the average,who will have benefits far below the nationalaverage. We will provide additional-funds forthese states without taking anything away fromthe rest of you. It looks now under our

20

formula about 18 or 19 states will do better,but nobody gets less. These funds will beavailable to all the states should you confrontsome unexpected circumstance that dramaticallyincreases your case load and your costs.

The bill Republicans will fight for and wehope Democrats will join us, and I think somwill, will end Welfare as we know it, andthat's what this is all about. But all of ourefforts to reform these programs willaccomplish very little if we fail to addresssome of our disturbing societal problems,problems like the astounding increase in thenumber of children born out of wedlock, and thenumber of children having children. And ourbill, again, will give you, the states, theflexibility you have asked for to address theseproblems with solutions that strengthenfamilies, discourage illegitimacy, encouragepersonal responsibility and perhaps, mostimportantly, do nothing to encourage abortions.And however you feel about that issue, let msay that there is a division when it comes tocash payments or ending cash payments toteenage mothers. We have one group that says

21

that's what ought to happen. We have theCatholic Bishops and the Catholic Charities,the other segment, that say that shouldn'thappen. Keep in mind the Catholic Charitiesare the one group that provide service toteenage mothers.

The solution to the tragedy ofout-of-wedlock births among young people hasbeen much debated. And among those who feelmost strongly and perhaps the greatestexperienced providing guidance to these youngpeople, as I said, are the Catholic Charitiesalong with the u.s. Conference of CatholicBishops. The Catholic Charities and othergroups have urged us not to put the unborn atrisk in our important efforts to remove anyincentives for illegitimacy. And I will do all

~in my power to ensure that our reforms will notincrease the tragedy of abortions in Americaregardless of your position on that issue.We're not out there trying to encourageabortion.

So, we're going to meet with theGovernors, we're going to meet with your staffand we're going to need your help. And I trust

22

you'll not be shy if you believe that we canmake further improvements in our proposal. Andwe're going to start it this weekend. Unlesssomething happens, we'll start it this weekend.We'll try to complete it the following week, orthe following week or the following week. Inthe Senate you need 60 votes to shut offdebate. If we can't shut off debate after acertain'time, we'll probably have to decide itcannot pass, but we believe we responded to theconcerns that Governors have been telling meabout for years. As Governor Thompson said, Iintroduced, along with Senator Long back in1979, the block grant concept, so we've thoughtabout it for a long, long time. It didn't popup in 1994, 1995.

Let me just touch very quickly on twoother issues ~nd then I want to leave becaus Iknow they're going to shut down the airport andI want to get out before that happens. Nooffense, Governor. They didn't do that when Icame in last night.

The principle innovation and wisdom flowfrom the states up, not from Washington down,must also guide our efforts to improve

\ I

23

Medicaid. Here again, I don't think tinkeringis going to work. Major reform is needed.oppressive federal control has not madeMedicaid a better program. To the contrary,it's built a system that constantly favors themost expensive institutional care whilediscouraging innovative service delivery. Andthese problems cannot be fixed by tinkeringaround the edges or by liberalizing changeswhich in the hands of an aggressive federalbureaucracy will be used as an opportunity toimpose more federal control.

We've got to repeal the existing program.That's how we start dealing with Medicaid; werepeal the existing program and start with aclean slate to design a sensible program tomeet today's needs. The states, notWashington; let me underscc~e that, the stat s,not Washington, should be given the freedom todesign a Medicaid system that results in moreinnovative delivery systems and benefitpackages. And rules like the Boren Rule, mygood friend David Boren from Oklahoma, which isan attempt by the federal government tomicromanage how much you pay providers and in

24

doing so makes it easier for groups to haul youinto court, should be repealed. We need toeliminate the so-called Boren Rule.

(Applause)And if the Governors today, as I said

earlier, can come together on a formula, we'llgo to work on Medicaid. There's going to be alot of activity on Medicaid in September ofthis year, and that's not very far away. Andwe need your help. We can't do it without you.Let's be very honest about it. If you're onthe other side, if there's a big split with theGovernors, it makes it more and more difficult.

And, finally, let me say a word aboutMedicare. There's been a lot of statementsabout Medicare. A lot of things are wrong withMedicare. We know that according to theTrustee's report it's going to be in rea:trouble in six or seven years. I harken back,and I'm certain Lawton remembers, back in 1983we had the same problem with Social Security.At that time a Republican President namedRonald Reagan and a Democratic Speaker namedTip O'Neill, and Howard Baker was the MajorityLeader in the Senate, put together a

25

commission. Claude Pepper was on thatcommission, Bob Dole was on that commission,Pat Moynahan was on that commission, LaneKirkman was on that commission. Business,labor, Democrats, Republicans were on theSocial Security Commission, and we fixed it.We fixed it. Wasn't easy, but it wasbipartisan or nonpartisan. And Social Securityis going to be in good shape, according to theTrustee's report, at least until the year 2017and probably beyond. So, we need to take alook at Medicare and we need to start to workon it.

I know last week was the 30th anniversaryof Medicare, and I'll give the President andhis advisors credit. They know a mediaopportunity when they see one, but I don'tthink singing "Happy Birthday, Medicare," isgoing to solve the problems as everybody wassaying, wherever it was, in Missouri yesterday.We have to deal with it. And don't go aroundfrightening senior citizens. That's all somepeople have is their Social Security check andMedicare. That's all my mother had. And everytime I would go home she would say, "Don't

26

touch my Social Security, don't touch my SocialSecurity." But she did want to preserve,improve and protect it, and that's preciselywhat we hope to do with Medicare, and it's notgoing to be easy again. So, what we'd like todo is work with the President, work with theGovernors again. And we're not out to takeaway anybody's Medicare. There's this effortout there to say, "Oh, Republicans want to putall this in a tax cut." That's not ourobjective at all. If you read it carefully,it's not going to happen.

Seems to me that when three members ofyour own cabinet say Medicare is about to gobelly up, we can't pay Part A or Part B,hospitals or doctors unless something's done,that ought to be an alarm bell that gets us tog0 to work. And I'm ready to go to work justas we did in '83 on a bipartisan basis, and itwasn't easy. It almost went down the drain. Iremember a conversation I had on the Senatefloor with Senator Pat Moynahan. When wethought it was allover, we talked to eachother, Democrat, Republican, let's try it onemore time to get this group back together. We

27

did it. We finally put together a package.So, we don't want Medicare to be bankrupt

by the time it reaches 37. It's 30 years ofage now, fairly young by my standards and allthe other things I've been reading about. But,in any event, my cholesterol is lower thanClinton's and my weight's lower than Clinton's,my blood pressure. I'm not going to makehealth an issue in 1996.

(Applause)What I would like to do, and I hope the

President will redo that today while he's here,I'd like to send a copy of the Trustee's reportwithout any editing to every senior citizen inAmerica so they know precisely. Don't take itfrom Bob Dole, don't take it from PresidentClinton, but send them a copy of the Trustee'sreport and let ~hem find out for themselves.It will be about 37 million copies, it willcost about $8 Million, but it would be worth itso every senior citizen, regardless of theirparty, regardless of where they live will say,"Oh, the Trustee's report." Take a look at itand find out about Medicare. NOw, I think ifwe did that, there would be a big bipartisan

28

effort to protect, and preserve and improveMedicare just as we did Social Security back in1983. And we're willing to do this on anonpartisan basis.

And I would conclude by saying that a lotof these things that we're doing now percolatedup from the states. We didn't think of all ofthese things. Newt Gingrich didn't think ofthem; Bob Dole didn't think of them. You'vehad these ideas. You've been the laboratoriesfor democracy. Democrats and Republicansalike, you've been the innovators, you've donthe experimenting and we don't want to stopnow. And we think it's very, very importantthat we work together. You know, we've lit afire now, and as far as I'm concerned, it's notgoing to be extinguished. And I believeAmerica's historical detour ).ntobureaucracyand centralization is over. We're moving inyour direction if you'll let us. If you don'twant us to move in your direction, if you don'twant the responsibility, then we can't forceyou to take it. We believe it!~ an opportunityyou've been asking us for. Do it. Let's bepartners. And we'll disagree from time to

29

time, and we'll disagree hopefully not onpartisan lines but just because we havedifferent views because I think Welfare reformand I think Medicare, Medicaid are veryimportant issues we have to deal with. They'reimportant to us as we look at the budget;they're certainly important to you.

And I would just pledge again as theMajority Leader of the United states Senate,and I think my record would indicate that I'mwilling to work with people on both sides ofthe aisle, and I would pledge to you now, we'rewilling to go to work. We're willing to worktogether because what we're talking about isnot partisan politics; about the future of thiscountry, and the shape of this country and howwe treat senior citizens, how we treat unwedmothers, all of these big issues that are ~utthere. In my view, we can do a better jobworking together. Working together withGovernors, Congress, state legislators, mayors.That's what it's all about. And I believe ifwe do that, our best years are still-ahead.Thank you very much.

(Applause)

30

GOVERNOR DEAN: We thank Senator Dolevery, very much for his very helpful remarks,and I want to thank him for his wit. We oftenhave an awful lot of seriousness, and hecertainly was very, very serious about a veryserious subject, but I think wit always helps.And laughter always makes bipartisan agreementsmore easy to come to and, Senator Dole, weappreciate your forthrightness very much.

We're now going to convene the Executivecommittee. All Governors are invited toparticipate in the meetings and the discussionof the Executive committee, but only the ninemembers of the Executive Committee may vote,although hopefully that won't be a problembecause I don't think we have anything terriblycontroversial on here. The policies that theExecutive Committee may adopt would be notadopted by the NGA until tomorrow at which timeall Governors will have an opportunity to voteon these policies.

The first motion that I will calIonGovernor Thompson to make is a motion toapprove the minutes of the May 18th ExecutiveCommittee meeting. Governor Thompson.

31

GOVERNOR THOMPSON: Mr. Chairman, I somove.

GOVERNOR DEAN: Is there a second?GOVERNOR WHITMAN: Second.GOVERNOR DEAN: Governor Whitman. All

those in favor signify by saying aye.(Aye)GOVERNOR DEAN: All those opposed by

saying no. The ayes have it. We have approvedthe minutes of the May 18th meeting.

Let me just say that I know there are alot of people who are going to be moving out asa result of the Majority Leader's speech nowbeing over, but if you could move out quietlybecause we do need to conduct this business,I'd appreciate that. Thank you.

We have a series of motions' or policiesnow submitted by the Executive Committee, andI'm going to calIon Governor Thompson for thefirst which is incentives for states to achievefederal savings. Governor Thompson.

GOVERNOR THOMPSON: Thank you,Mr. Chairman. I would move. This policy wasbrought to my attention by Governor Pataki fromNew York who believes very strongly, as I do,

32

that when we go down this road to grants fromthe federal government and if we can savedollars in the meantime, we should be able tomaintain and be able to allow for some kind ofsavings to cumulate.to the states. So, this isa policy that expands our existing policy,Mr. Chairman. It's incentives for states toachieve federal savings and so that stateswould be permitted to retain a portion of anysavings. And I think that is good government,and I think it would be good for our NGA to goon record on this particular policy and,therefore, I would so move, Mr. Chairman.

GOVERNOR DEAN: Thank you, GovernorThompson. Is there a second?

GOVERNOR WHITMAN: Yes.GOVERNOR DEAN: Governor Whitman. All


no. The ayes have it.The second is a resolution commending the

3000 year anniversary of the City of Jerusalem.Incidentally, the texts of all of these are inthis green booklet that are on your table in

33

front of you. CalIon Governor Caperton. IsGovernor Caperton here?

GOVERNOR CAPERTON: I move the resolution.GOVERNOR DEAN: This is to move the

resolution commending the City of Jerusalem forthe 3000th anniversary.

GOVERNOR THOMPSON: I'll second that,Mr. Chairman.

GOVERNOR DEAN: Governor Thompson seconds.All those in favor signify by saying aye.

(Aye)GOVERNOR DEAN: Those opposed by saying

no. The ayes have it. The resolution has beenadopted by the Executive Committee.

The third is a clarification of the NGA'ssunsetting policy, and I calIon GovernorLeavitt to move this resolution.

GOVERNOR LEl'VITT: Governor, the proposalis as outlined in the summary. I make a motionthat the resolution be adopted.

GOVERNOR DEAN: Governor Thompson.GOVERNOR THOMPSON: I'll second it.GOVERNOR DEAN: All those in favor signify

by saying aye.(Aye)

34

GOVERNOR DEAN: Those opposed by sayingno. The ayes have it.

Finally, we have a motion and a second onthe reaffirmation of the NGA line item vetopower. Governor Thompson.

GOVERNOR THOMPSON: Thank you,Mr. Chairman. This is a policy that both youand I are co-authors of, Mr. Chairman. Thisreaffirms the position the NGA has takenseveral times before, and it allows for thePresident of the United States to have the samepower and line item veto that 43 of thenation's Governors have which is the line itemveto.

I think it is a bipartisan position thatthe President of the united States, whoeverthat person is, because we've brought this upunder Republican Presidents a~ well as DemocratPresidents and it's always been a standingpolicy, and I would like to move on behalf ofChairman Dean and myself on this line item vetoresolution.

GOVERNOR DEAN: Now, this is arecommendation to the NGA as a whole to suspendthe rules. This will require a three-quarters

•

35

rule suspension tomorrow, but we can adopt itby Executive Committee today. Is there asecond?

GOVERNOR WHITMAN: Yes.GOVERNOR DEAN: Governor Whitman. All

those in favor signify by say aye.(Aye)GOVERNOR DEAN: Opposed by saying no. The

ayes have it. You have adopted the resolution.I'm going to call now on Ray Scheppach to

summarize legislative issues, and then I'mgoing to turn the session over to GovernorThompson because I must go unclog the airportand pick up the President. Ray Scheppach.

MR. SCHEPPACH: Thank you, Governor. Veryquickly, in terms of the budget, the Congresshas adopted the budget resolution that will getto a zero deficit over seven years. They h~vemade instructions to the various committees toreport back their recommendations now byseptember 22nd for the so-called ReconciliationBill which will probably be enacted sometimebetween mid october and before the Christmasrecess.

The House has now indicated that they will

36

complete all of the 13 appropriations billsbefore they recess the end of next week, andthe senate is beginning to pick those up. So,the hope is that the appropriations bills willall be in place by the beginning of the fiscalyear, October 1, although there is somesuspicion that the President will veto a numberof those and, therefore, will be intocontinuing resolutions for several months.

On Medicaid, on the House side, they arein the process of drafting a fairly flexibleblock grant proposal that is being discussed.On the Senate side, they have essentially notbegun to move yet.

On Welfare, as senator Dole mentioned,they do have some tentative agreements and theywill begin to go to the floor on the Senateside IG~er this week, and I think his hope, ofcourse, is to keep them in session until such atime as he is able to get a bill.

A number of environmental issues. Cleanwater passed the House. It is a good bill fromthe NGA standpoint with the exception ofwetlands provisions. No bills yet on safedrinking water, although we are negotiating

37

with both sides, and no bills yet on the wholesuperfund, although the committees arepreparing to move forward on those issues.

On the employment and training, both thHouse and Senate side have adopted at thecommittee level block grants, although we dounderstand now that the employment and trainingblock grants will end up as part of Welfarereform in the bill that Senator Dole wastalking about. That completes the quicklegislative update.

GOVERNOR DEAN: Little quicker than Ithought. Thank you. I am going to askGovernor Thompson to take over at this point.We have a very good presentation from GovernorRomer updating the Pfizer Sharing for CareProgram. So, I will recognize Governor Romer,and I deeply appreci~~e Governor Thompsontaking over the Chair. Thank you.

GOVERNOR ROMER: Mr. Chairman, verybriefly. We began this in 1993. It was acooperative effort between Pfizer and theNational Association -of Community Healthcenters, and the essence of it is we've hadvoluntary assistance in providing over $21

38

Million worth of free medicines to 200,000needy patients. And this medicine has beendonated at no charge to either the patient ormore than 335 health centers throughout thecountry. It's been no charge to the taxpayer.And through this partnership Pfizer's entireline of advanced medicines is available topatients living below the federal poverty lineand who do not have prescription drug coverage.

This is a model-type program. It'sprecisely the sort of programs I think theGovernors need to look at in the challengingyears ahead. It's an example of, I think, whatcan be achieved between the public and privatesectors. And it's a pleasure for me tointroduce the Sharing for Care partners fromPfizer, Mr. Chuck Hardwick, the vice president.I'd like to have you stand, Chuck. And fromthe National Association of Community HealthCenters, Carol Morris. I'd like to have youstand. And I'd like to have us give you a handof applause for this $21 Million.

(Applause)You all have in front of you a booklet

that describes it, and I just hope that this

39

will continue and we can continue thiscooperative effort to help meet some of theseneeds. Thank you very much, Mr. Chairman.

GOVERNOR THOMPSON: Thank you very much,Governor Romer, and we appreciate very muchyour work in this as well as the generosity ofPfizer. And we appreciate that and thank you.

The next thing we go to is the federalismsummit. I'd like to calIon Governor MikeLeavitt from utah to explain that, and then I'mgoing to call upon Governor Allen who has anaddition to that. Mike.

GOVERNOR LEAVITT: Thank you, Governor.The subject of the states' relationship withthe national government is a matter that hasdominated a great deal of our discussion duringthis conference and will for years to come.There is substantial progress being discussed Ithink right now in Congress with respect to ourat least short-term relationship, but it'simportant, I believe, to recognize that ourlong-term position still remains weak andtenuous. ~ -- - ---.

This summit is a joint activity taken byfive organizations, the NGA, the National

40

Conference of state Legislatures, the Councilof state Governments, the American LegislativeExchange Council and the state LegislativeLeaders Foundation. It is an effort tocontinue to form states into a more effectiveunit in maintaining our stewardship as acounterbalance to the national government. Itis of some consequence, I think, and somesignificance that these organizations havenever met together to examine this topic.Therefore, it has been proposed and approved bythe Executive Committee that on October the22nd through the 24th that NGA, its ExecutiveCommittee, would join with the other executivecommittees of these organizations to engage ina formal assessment of our current situationand to inventory a group of options that wouldallow us possible action to continue to be thecounterbalance that we need to and then toidentify actions upon which we can all agree.

I'd like to yield just one moment toGovernor Ben Nelson from Nebraska who has beena participant in these discussions prior togoing to Governor Allen.

GOVERNOR THOMPSON: Governor, Ben.

41

GOVERNOR NELSON: Thank you, Mr. Chairman,Governor Leavitt. Many of the things that wehear coming from Washington today will talkabout a devolution of responsibility, and veryoften that means a downloading ofresponsibility to the states. What we'relooking for, I believe, is not only adownloading of responsibility but also asharing of the authority to determine what kindof downloading will occur.

So, the balance of power issue, I think,will help the states have a relationship withthe federal government that's appropriate underthe circumstances in accordance with the 10thAmendment and will cease the relationship thathas grown over the years to the point where thstates have become in many respects the branchmanagers ~f the federal government orsubcontractors of responsibility.

So, I think that this summit will help usachieve, I think, a sense of balance that isnecessary for the future. And I appreciate theopportunity for my views as well. Thank you.

GOVERNOR THOMPSON: Thank you, GovernorNelson. I'd like to now calIon Governor Allen

42

who has some additional discussion on thissUbject. George.

GOVERNOR ALLEN: Thank you, Mr. Chairman.I'm pleased to have this opportunity to speakfor a few minutes about a specificconstitutional reform that I think isimportant. I want to first commend GovernorLeavitt and Governor Nelson for theirleadership. I think the summit is a good idea.It's something that is needed to bring everyonetogether from across the country to see what wecan do to make sure that we get the reform, notjust the discussion, but also moving forward.And I think one of the structural reforms thatwe certainly should look at very closely issomething called the states' veto. I have acommission or council in Virginia onself-determination an~ federalism, and thatdocument has been put before you all and why weneed the states' veto.

NOw, being a Virginian, we naturally careabout these issues. We had those debates wayback when with Madison and Patrick Henry, butit really is an issue that has been carrying onfor many years. It was something that we

43

discussed at great length in Williamsburg lastNovember. NOw, all Governors, regardless ofparty, understand that our states are notexercising our rights, our ownself-determination. Instead, we're beingallowed to act at the sufferance of the federaljudge, or the federal Congress or federalbureaucrat. And I certainly do appreciate thnew spirit of Congress. It's great to hear thenew ideas coming as far as unfunded mandates,and I'm glad that's passed. I'm certainly gladthat Senator Dole's Welfare reform proposal isone that gives us greater prerogatives andgreater flexibility as far as fashioning ourown Welfare reforms in our states, but our goalshould not just be to have a conference or asummit and just talk about how awful things areand do nothing about it. What we need to do istake this opportunity to make the structuralreforms, the long-term reforms that will makesure that we are co-equal partners.

NOw, how do we do that? I believe theanswer is the states' initiative is one way.That's an NGA policy. That's where you'd amendArticle 5 of the Constitution so that a super

44

majority of the states could initiate aconstitutional amendment, and that has beenformally endorsed by the National Governors'Association, and that would be action withoutthe necessity of congressional action orconstitutional convention. And the othercrucial complement to this reform, I believe,is the states' veto. This would give us, asthe people of our states, a means of their owndefense. It would give us a tool that is notdependent on enforcement by federal judges, orthe generosity of Congress or the President butsimply what it would require is if you actuallycould get three-quarters or maybe two-thirds ofthe states, a specific federal legislative orregulatory action, if that exceeds federalauthority or if it's objectionable, then thestates acting in concert, three-quarters ofthem, could repeal or veto that law.

NOw, I realize it's pretty hard and veryrare that you're actually going to getthree-quarters of the states, three-quarters ofus Governors to agree on anything, but if youever did reach that consensus, thatthree-quarters of us thought that this law was

45

objectionable, it was not desirable for thepeople of our states, I think that this wouldbe a good measure rather than us going beggingand pleading for the Congress or wastingmillions of dollars on litigation and attorneystrying to get some federal judge to somehowgive us relief in defense of our rights.

Now, in truth, this tool, I don't think,would be used very often. It would be veryrarely used, but it would provide us asGovernors, and our legislators and our peoplein our states with some real constitutionalleverage. It would be the kind of leverage youhave when you're a partner, a true partner inan enterprise and not just a serf in somefederal kingdom.

Now, this is not a partisan issue. It'snot a political issue. It's an issue about thefuture of our federal system and how we canmake it work in the method by which our framersenvisioned it. And I know we can make thesystem work in such a way that the owners, theowners of the government, the people have somecontrol over it.

The frustration and the disillusionment of

46

the people across our states and across thisland are because too many decisions are beingmade in a far away place by people who don'tknow their particular concerns, who are notresponsive to them. They may be unelected orthey may be elected by some other people insome other state. And so this is a way to getthe decisions closest to the people. Thepeople's legislative branch is in the statecapitols and, in fact, it's also in their localgovernments. So, I think this effort toovercome the disillusionment of the people canbe effectuated with the states' veto. It is agood deterrent. It is a good check and, again,it would be rarely used but, nevertheless, itdoes give us that tool. And I think it willhelp. The people get back in control of theirgovernment and at the state and the locallevel. And so I think this is the sort offreedom the framers envisioned, and I thinkit's up to us, up to us to be the framers ofour Constitution and our freedoms for the nexttwo centurieSeJlot just for us but for ourchildren and our grandchildren.

So, I look forward to working with you all

47

on this. There are a lot of questions anddetails to be worked out, but I think it's aconcept that I think that we have to strikenow. To just think that it's just great forthese next two years because of the new viewsup in Congress, I think we might miss it. Andit's, again, not a partisan issue, but I'm gladthey have those views now in Congress. But thpoint is, is we need to strike now. And I alsothink it needs to be part of the debates nextyear for the presidency as to what are yougoing to do. What are you prepared to do tomake sure that these freedoms and theseliberties for the people in our states andcommunities are preserved. And I think thatthis is a worthy thing and look forward toworking with each and everyone of you to seeif we can fashion this, complement the states'veto to the states' initiative which theGovernors' Association has already endorsed.Thank you, Mr. Chairman.

GOVERNOR THOMPSON: Thank you very much,Governor Allen/--and-~overnors-Leavitt""and--------- --- --Nelson for your effort on this. Since there isnot a motion, it was just discussion, we won't

48

take any further action on this unless there'sanybody on the Executive committee that wouldlike to further elaborate or discuss it. Ihear none, so I'm going to turn to RayScheppach now. We've got to approve ourbudget. It's on Tab E, Page 1, and RayScheppach will quickly go over it and thenwe'll ask for a motion.

MR. SCHEPPACH: NOw, this is essentiallyjust an update. As of May 31st we were stilloperating with a surplUS of about $460,000.Most of that was timing differences. We've gotsome more recent information. The end of ourfiscal year is the end of June, and it lookslike we will have a slight surplus of around$15,000 to $20,000 for the year. So, it lookslike we have, in fact, ended up in the blackfor that period.

The second issue is that there are aboutfive grants and contracts listed.

GOVERNOR THOMPSON: Let's take a motion onthis one first, Ray. Governor Whitman, couldyou make a motion on the approval of thebudget? We have a surplus of $463,000 as ofright now.

49

GOVERNOR WHITMAN: I move approval.GOVERNOR THOMPSON: Move. Governor

Voinovich, will you seco~d it?GOVERNOR VOINOVICH: Second.GOVERNOR THOMPSON: Second. Any further

discussion, Executive committee, on theapproval of the budget? Hearing none, allthose in favor signify by saying aye.

(Aye)GOVERNOR THOMPSON: Opposed signify by

saying nay. Ayes have it. Motion carries.Ray?

MR. SCHEPPACH: Okay. The second issue ison the same tab, E, Pages 7 through 11. Therare five grants and contracts that need to beapproved. A number of these have to do withChildren for Governor Dean, some in theenvironmental area and then some in theeducation area. We will need a motion toapprove those grants and contracts.

GOVERNOR THOMPSON: Motion? GovernorVoinovich, have you had a chance to look overthese? ~~~----- -~-~-- --~-

GOVERNOR VOINOVICH: I move to approvethem.

50

GOVERNOR THOMPSON: Governor Voinovichmoves approval. Governor Whitman seconds it.Any further discussion? Hearing none, allthose in favor of approving the grants asoutlined on Pages 7 through 12 signify bysaying aye.

(Aye)GOVERNOR THOMPSON: Opposed signify by

saying nay. Ayes have it. Motion carries.The final thing to come before our

Executive committee is the operations review,and I'm glad there's still some Governorsaround. Peat Marwick is in Room 154, and Ikeep asking them and we still don't have thatmany Governors going in. And Governor Branstadand Governor Fordice, and Governor Voinovichand Governor Whitman, could you get in and,

- Governor Rowland, would you please go in andgive them an interview on what you think of theNGA? And the rest of you. I believe you'vebeen in, Roy.

GOVERNOR ROMER: I will be.GOVERNOR THOMPSON: Okay. We are going to

have a report that I will be sending out to allof the members of the NGA and would appreciate

51

your comments. Those reports will be sent toyou sometime during the month of October. Thenwe will be making some recommendations to thefull plenary session in February on changes inNGA. So, I would hope that you would availyourself of the opportunity to give youropinions to Peat Marwick this morning or thisafternoon. Yes, Governor Voinovich.

GOVERNOR VOINOVICH: Mr. Chairman, one ofthe things that I think that I noticed from thematerial that you sent out to us that Ireviewed, and I thought it was a goodpresentation of what the priorities were lasttime and the proposed priorities this time, Iwas kind of surprised that only 60 percent ofthe Governors responded to that. And I wouldsuggest that those that haven't should respond.And we ough~ to send that out to those peopleso that that information can be available toPeat Marwick and Mitchell. I'd like tocongratulate you on requesting that because Ithink it's good for an organization toperiodically look at itself and find out whatits membership really wants from theorganization, and I think that out of that will

52

come a blueprint for a new direction perhapsfor this organization.

GOVERNOR THOMPSON: Thank you, George.You make a very valid suggestion, and I thinkwe should. I believe we can still do that inthe month of August. Thank you, George.

Anything else to come in front of theExecutive Committee before we adjourn? Motionto adjourn is in order. Roy?

GOVERNOR ROMER: I move we adjourn.GOVERNOR THOMPSON: Governor Romer has

moved we adjourn, and a second by GovernorWhitman. Any further discussion? Hearingnone, all those in favor signify by saying aye.

(Aye)GOVERNOR THOMPSON: We are adjourned.

53

CERTIFICATEI, Lisa M. Hallstrom, Court Reporter and

Notary Public, certify that the foregoing pages3 - 52, inclusive, comprise a full, true andcorrect transcript taken from my stenographicnotes taken in the Plenary Session/ExecutiveCommittee Meeting taken before me as NotaryPublic on Monday, July 31, 1995, 9:30 a.m., atthe Sheraton Burlington Hotel & ConferenceCenter, Burlington, Vermont .

• Lisa M. Hallstrom


NATIONAL GOVERNORS' ASSOCIATION

87TH ANNUAL MEETING

JULY 30, 1995 - AUGUST 1, 1995

BURLINGTON, VERMONT

SPECIAL PLENARY SESSIONMONDAY, JULY 31, 1995

2:00 P.M.


COURT REPORTER: cindy B. Hall, RPR, CP, CM


Montpelier, VT 05601(802) 229-9873

2

INDEXPAGE

Howard Dean, M.D., Governor, Vermont, Chair, 3Introduction

Bill Clinton, President of the united states 5

3

Ladies and gentlemen, the President of theunited states, accompanied by NationalGovernors' Association Chairman, GovernorHoward Dean; and Vice Chairman, Governor TommyThompson.

GOVERNOR DEAN: Before I formallyintroduce the President, I want to present himwith a book which was given to me by aVermonter who found this in an antique bookshop in Lyndonville, Vermont. And what it wasdoing there I do not know. It is the minutesof the conference of the Governors' May 13th to14th under the presidency of TheodoreRoosevelt, the first Governors' conference in1908 and, as I say, what it was doing inLyndonville I do not know, Mr. President, but Iwill tell you that I have read this. Ofcourse, when the guy called me up and told mehe wanted to give it to you, I tried to see ifhe could give it to me instead. I have readthis and I can tell you that no matter how longwinded we are, my colleagues, it does notcompare to what is found in this. Theproceedings here run 439 pages, and I know ifthe President was the Chairman of this

4

organization, I'd venture under hisChairmanship it would not have been 439 pageseither. So, let me present this to you,Mr. President, before our formal introduction.

(Applause)The President was fortunate enough to meet

the man who found that book at the airport thismorning. President Clinton has been with usmany times before. A former colleague, he hasstood tall for a partnership between the statesand the federal government on behalf of allAmericans. As President he has repeatedlysought our advice and counsel. He haspersonally led the fight on issues that mean agreat deal to us. By far the most importantissue in federalism is sustained nationaleconomic growth. The nation is on a path ofsustained economic recovery, Mr. President, andfor that we are extremely grateful for yourleadership, and we thank you.

The President has been on our side onEducation Goals 2000; emergency disasterassistance; Welfare and health care waivers,which he has granted more of than anyPresident; mandate relief; paperwork reduction;

5

Welfare reform; regulatory relief; and mostimportantly to me is the theme of thisconference, he has made sure that in all thesethings we take care of children as we changethe social systems of America.

You're a good friend of state government,Mr. President, and the Governors in particular.We deeply appreciate your leadership and yourcooperation. The Governors look forward tocontinuing our work together over the comingmonths on state/federal agendas, Welfarereform, Medicaid, the budget.

Mr. President, I'm very, very proud tohave you in Vermont.

(Applause)PRESIDENT CLINTON: Thank you very much,

Governor Dean, and thank you for the gift ofthose proceedings. I discovered two thingslooking through that book very quickly whichwill be interesting, perhaps, to some of you.And one is that the first Governors' conference-- there's one thing I knew and one I didn't.The first Governors' conference was called byPresident Theodore Roosevelt to bring all theGovernors together to develop a plan to

6

conserve our nation's resources. It was anenvironmental Governors' conference. Thesecond thing was that they really set the toneof bipartisanship which has endured through allthese years. Something I didn't know, I sawthat the two special guests at the Governors'conference were William Jennings Bryan andAndrew Carnegie, so they were expanding thewaterfront even then.

I've really looked forward to this, but Ikind of got my feelings hurt. I understandSenator Dole came here and told you mycholesterol was higher than his. I came toVermont determined to get my cholesterol downwith lowfat Ben and Jerry's Cherry Garcia. Ido want you to know that my standing heartrate, however, pulse rate, is much lower thanSenator Dole's, but that's really not hisfault. I don't have to deal with Phil Grammevery day.

(Applause)I think on matters of health, age and

political anxiety we have come to a draw. Ithank you very much for having me here. I lovelooking around the table and seeing old friends

7

and new faces, and I thank Governor Dean forhis leadership of the Governors' conferenceand, Governor Thompson, I wish you well and Ithank you for the work that we have donetogether over so many years. I thank all thestate officials from Vermont who came out tothe airport to say hello, and the Mayor here inBurlington, I know that your former Governor,Madeleine Kunin, is here, the Deputy Secretaryof Education. She has done a very great jobfor us, and I thank her for that.

I want to talk to you today primarilyabout Welfare reform, but I'd like to put it inthe context of the other things that we areattempting to do in Washington. I see SenatorLeahy and Congressman Sanders back there.Senator Jeffords may be here. I think I'mtaking him back to Washington in a couple ofhours. I ran for President because I wasgenuinely concerned about whether our countrywas ready for the 21st Century because of theslow rate of job growth, 20 years of stagnantincomes, 30 years of social problems. I knewthat we were still better than any othercountry in the world in so many things, but we

8

seem to be coming apart when clearly we'vealways done better when we went forwardtogether as a nation. I have this vision ofwhat our country will look like 20, or 30 or 40years from now. I want America to be a highopportunity, smart-work country; not a hardwork, low-wage country. I want America to be acountry with strong families and strongcommunities where people have the ability tomake the most of their own lives, and familiesand communities have the ability to solve theirown problems; where we have good schools, and aclean environment, and decent health care andsafe streets.

I think the strategy to achieve that isclear. We have to create more opportunity anddemand more responsibility from our people, andwe have to do it together. I have concluded,having worked at this job now for two and ahalf years, that we cannot achieve the specificstrategies of creating opportunity or providingfor more responsibility unless we find a way todo more together.

In the last two and a half years, asGovernor Dean said, I have spent most of my

9

time working on trying to make sure we had asound economic policy; to bring the deficitdown; and increase trade and investment intechnology, and research, and development andeducation; to open up new educationalopportunities; and to work with you to achievestandards of excellence with less directionfrom the national government.

We also have tried to put some morespecific responsibilities into the programsthat benefit the American people. That's whatthe National Service Program was all about.We'll help you go to college but you need toserve your country at the grass-roots level.We reformed the college loan program to cut thecosts and make the repayment terms better, butwe toughened dramatically the collection ofdelinquent college loans so that the taxpayerswouldn't be out more money. We passed a familyleave law, but we've also tried to strengthenchild support enforcement, as so many of youhave.

I want to help people on Welfare, but Ialso want to reward people who, on their own,are off of Welfare, on modest incomes, which is

10

why we have dramatically expanded the earnedincome tax credit, the program that PresidentReagan said was the most pro-family, pro-workinitiative undertaken by the united states inthe last generation. Now, this year familieswith children with incomes of under $28,000will pay about $1300 less in income tax thanthey would have if the laws hadn't been changedin 1993.

We also tried to change the way thegovernment works. It's smaller than it used tobe. There are 150,000 fewer people working forthe federal government than there were the dayI became President. We have dramaticallyreduced government regulations in many areas.We're on the way to reducing the regulatoryburden of the Department of Education by 40percent, with the Small Business Administrationby 50 percent. We are reducing this year thetime it takes to comply with the EPA rules andregulations by 25 percent, and establishing aprogram in which anybody, any small businessperson who calls the EPA and honestly asks forhelp in dealing with a problem, cannot be finedas a result of any discovery arising from the

11

phone call while the person is trying to meetthe requirements of federal law.

We have also tried to solve problems thathave been ignored. We reformed the pensionsystem in the country to save 8.5 milliontroubled pensions and stabilized 40 millionmore. Secretary Cisneros has formed anunbelievable partnership to expand homeownership with no new tax dollars, which willget us by the end of this decade more thantwo-thirds of Americans in their own homes forthe first time in the history of the republic.

The results of all this are overwhelminglypositive but still somewhat troubling. On theeconomic front we have 7 million more jobs; 1.5million more small businesses, the largest rateof small business formation in history, 2.4million new homeowners; record stock markets;low inflation; record profits; and yet -- and arecord number of new millionaires, which issomething to be proud of in this country,people who work their way into becomingmillionaires. They didn't inherit the money.But still, the median income is about where itwas two and a half years ago, which means most

12

wage-earning Americans are still working harderfor the same or lower wages. And the level ofanxiety is quite high.

On the social front you see the samethings, the number of people on food stamps isdown, the number of people on Welfare is down,the divorce rate is down, the crime rate isdown in almost every major metropolitan area inthe country, the rate of serious drug use isdown, but the rate of random violence amongvery young people is up. The continuinggnawing sense of insecurity is up, the rate ofcasual marijuana smoking among very youngpeople is up, even as serious drug use goesdown.

So, what we have is a sense in Americathat we're kind of drifting apart, and thisfuture that I visualize that I think all of youshare is being rapidly embraced by tens ofmillions of Americans and achieved withstunning success, but we are still being heldback in fulfilling our real destiny as acountry because so many people are kind of shutoff from that American dream.

I am convinced that the American people

13

want us to go forward together. I'm convincedthat there really is a common ground out thereon most of these issues that seem so divisivewhen we read about them in the newspaper or seethem on the evening news. I think if justordinary Americans could get in a room likethis and sit around a table, two-thirds of themor more would come to the same answer on mostof these questions.

And I believe that we cannot bring thecountry together and move the country forwardunless we deal with some issues that we stillhaven't faced. I've tried to find a way totalk about really controversial issues in a waythat would promote a discussion instead ofanother word combat. I've given talks in thelast few days about family and media, aboutaffirmative action, about the relationship ofreligion and prayer to schools in the hope thatwe can have genuine conversations about thesethings. But I am convinced that almost morethan any other issue in American life, thisWelfare issue sort of stands as a sYmbol ofwhat divides us because most Americans knowthat there are people who are trapped in a

14

cycle of dependency that takes their taxdollars but doesn't achieve the goals designedthat they have, which is to have people onWelfare become successful parents andsuccessful workers, and to have parents who canpay, pay for their children so the taxpayersdon't have to do it. I am convinced thatunless we do this and until we do it, therewill still be a sort of wedge that will be veryhard to get out of the spirit in the life ofAmerica.

There is here, maybe more than on anyother issue that we're dealing with that'scontroversial, a huge common ground in America.Maybe not in Washington yet, but out in thecountry there is a common ground. Not so verylong ago there were liberals who opposedrequiring all people on Welfare to go to work,but now almost nobody does and as far as Iknow, every Democrat in both houses of Congressis signed onto one version of a bill or anotherthat would do exactly that.

Not so long ago there were conservativeswho thought the government shouldn't spendmoney on child care to give Welfare mothers a

15

chance to go to work, but now nearly everybodyrecognizes that the single most significantfailure of the Welfare Reform Act of '88, whichI worked very hard on and which I missed, wasthat when we decided we couldn't fund at all,we should have put more money into child careeven if it meant less money in job trainingbecause there were states that had programs forthat. And that you can't expect someone toleave their children and go to work if theyhave to worry about the safety of the childrenor if they'll actually fall behind economicallyfor doing it because they don't have childcare. We now have a broad consensus on that.

When Governor Thompson, and Governor Deanand others came to the White House the WelfareReform Conference in January, I was very movedat the broad consensus that while we neededmore state flexibility in one area, we had tohave more national action, and that was onstandards for child support enforcement for thesimple reason that over a third of alldelinquent child support cases are multi-statecases, and there was no practical way toresolve that in the absence of having some

16

national standards. If everybody who could paytheir child support and who's under an order todo it did it, we could lift 800,000 people offthe Welfare rolls tomorrow. That is still ourgreatest short-term opportunity, and we allneed to do what we can to seize it.

There's also a pretty good consensus onwhat we shouldn't do. I think most Americansbelieve that while we should promote work andwe should fight premature and certainly fightout-of-wedlock pregnancy, it is a mistake todeny people benefits, children benefits becausetheir parents are under age and unmarried, justfor example, and I think most Americans areconcerned that the long-term trend in Americathat's now about ten years long toward dramaticdecline in the abortion rate might turn aroundand go up again, at least among some classes ofpeople, if we pass that kind of rule everywherein the country.

So, I think there is a common ground to behad on Welfare reform. I proposed a WelfareReform Bill in 1994 which I thought achievedthe objectives we all needed. I thought itwould do what the states need to do. I thought

17

it would set up time limits; it would haverequirements for responsible behavior for youngpeople, requiring them to stay at home and stayin school; it would have supported the effortsof states through greater investments in childcare and would have given much greaterflexibility. It didn't pass.

In the state of the Union this year Iasked the new Congress to join me in passing aWelfare Reform Bill. still hasn't passedbecause, unfortunately, in 1995 there have beenideological and political in-fights that havestalled progress on Welfare reform and itprevented the majority, particularly in theSenate, from taking a position on it.

Some of the people on the extreme rightwing of the Republican majority have held thisissue hostage because they want to force thestates to implement requirements that woulddeny benefits to young unmarried mothers andtheir children. But I believe it's better torequire young people to stay at home, stay inschool and turn their lives around because theobjective is to make good workers, goodparents, good citizens and successful children.

18

That's what we're all trying to do. So, I'magainst giving the states more mandates andless money, whether the mandates come from theright or the left. I'm also opposed to theefforts in Congress now to cut child carebecause I say again, the biggest mistake wemade in the Welfare Reform Act of ~88 was notdoing more in child care. We would have hadfar greater success if we invested more moneythen in child care for people on Welfare.

Now, I believe that it would be a mistakeif we cut child care and do all this otherstuff, we could have more latchkey children, wecould have more neglected children. And thereare all kind of new studies coming out againsaying that the worst thing in the world we cando is not to take the first four years of achild's life and make sure that those years arespent in personal contact with caring adults,where children can develop the kind ofcapacities they need. So, this is a very bigissue if your objective for Welfare reform isindependence work, good parenting andsuccessful children.

Now, you know I believe all of this.

19

That's why we've worked so hard to grant allthese waivers, more in two and a half yearsthan the past 12 years combined, but I alsohave to tell you that I'm opposed to Welfarereform that is really just a mask forcongressional budget cutting which would sendyou a check with no incentives or requirementson states to maintain your own funding supportfor poor children, and child care and work.And I do believe honestly that there is adanger that some states will get involved inthe race to the bottom, but not as some hasimplied because I don't have confidence in you,not because I think you want to do that, notbecause I think you would do it in any way ifyou could avoid it, but because I have been aGovernor for 12 years in all different kinds oftimes, and I know what kind of decisions youare about to face if the range of alternativesI see coming toward you develop.

I know with the big cuts now being talkedabout in Congress in Medicaid, in other healthand human services area, in education and theenvironment, that you will have a lot ofpressure in the first legislative session after

20

this budget comes down, and I know thatsomewhere down the road in the next few yearswe'll have another recession again, and it'sall right to have a fund set aside for thehigh-gross states, I like that, that's a goodidea, but what happens when we're not allgrowing like we are now and we were last year?What happens the next time a recession comesdown? How will you deal with the interplay inyour own legislature? If you just get a blockgrant for Welfare with no requirement to doanything on your own and the peoplerepresenting the good folks in nursing homesshow up, and the people representing theteachers show up, and the people representingthe colleges and universities show up, and thepeople representing the cities and counties whohave lost money they used to get forenvironmental investments show up, I don't knowwhat your experience is, but my experience isthat the poor children's lobby is a poor matchfor most of those forces in most statelegislatures in the country, not becauseanybody wants to do the wrong thing but becausethose people are deserving, too, and they will

21

have a very strong case to make. They willhave a very strong case to make.

So, I believe we ought to have acontinuing partnership, not for the federalgovernment to tell you how to do Welfare reformbut because any money we wind up saving throughtoday's neglect will cost us a ton more intomorrow's consequences. And this partnershippermits you to say, at least as a first line ofdefense, we must do this for the poor childrenof our state.

I also believe there is a better way todeal with this, and I'd like to say today Icome to you with essentially two messages, oneof what I hope we will all do in Congress andone that we can do without regard to Congress.

First, we do need to pass a Welfare ReformBill that demands work and responsibilities andgives you the tools you need to succeed: Toughchild support enforcement, time limits in workrequirements, child care, requiring youngmothers to live at home and stay in school andgreater state flexibility.

The work plan proposed by SenatorsDaschle, Breaux and Mikulski ends the current

22

Welfare system as we know it and replaces itwith a work base system. I will say again thebiggest shortcoming I believe of the bill thatI help write, the Family Support Act of 1988 onyour behalf or your predecessors, was that wedid not do enough in the child care area.

The Work First Bill gives states theresources to provide child care for people whogo to work and stay there. It rewards statesfor moving people from Welfare to work, notsimply for cutting people off Welfare rolls.It is in that sense real Welfare reform. Ithink a lot of you think it has too manyprescriptions, and I want to give you themaximum amount of flexibility, but it certainlyis a good place to start to work on bipartisanefforts to solve this problem. And I will sayagain, to get the job done, we've got to have abipartisan effort to do it.

I want to compliment Senator Dole for whathe said here today. I made a personal plea toSenator Dole not very long ago to try to find away to make a break from those who were tryingto hold the Republican conference and Senatehostage on this Welfare reform issue so that we

23

could work together, and today, if I understandhis remarks and I've read the best account ofthem I can, he proposed getting rid ofideological strings in requirements on states,and giving states more say in their programs.And that is a very good start for us to worktogether. Some of you may agree with himinstead of me on that, but as I understand it,he also proposes a flat block grant with norequirement for states maintaining theirpresent level of effort or no maintenance ofeffort requirement of any kind. As I said,maybe it's just because I have been a Governor,I think this is a very bad idea. I don't thinkwe should do this because this program, afterall, is called Aid to Families with DependentChildren, not aid to states with terriblebudget problems created by Congress.

(Applause)But while we have differences, Senator

Dole's speech today, given what's been going onup there, offers real hope that the Congresscan go beyond partisan and ideologicalbickering and pass a strong bipartisan Welfarereform bill. The American people have waited

24

for it long enough. We ought to do it. I amready to go to work on it, and I consider thisa very positive opening step.

I hope, again I would say, that you willconsider the great strengths of theDaschle-Breaux-Mikulski Bill, which I alsobelieve is a very positive opening step andshows you where the entire Democratic caucus inthe Senate is. They presently all supportthat.

My second message to you is we don't haveto wait for Congress to go a long way towardending Welfare as we know it. We can build onwhat we've already done. Already you are andwe are collecting child support at recordlevels.

Earlier this year I signed an executiveorder to crack down on federal employeedelinquency in child support and it isbeginning to be felt. Already in the last twoand a half years our administration hasapproved waivers for 29 states to reformWelfare your way.

The first experiment we approved was forGovernor Dean to make it clear that Welfare in

25

Vermont would become a second chance, not a wayof life. Governor Thompson's aggressiveefforts in Wisconsin, which have been widelynoted, send the same strong mess,age.

NOw, we can and we should do more, and weshouldn't just wait around for thecongressional process to work its way through.We can do more based on what states alreadyknow will work to promote work and to protectchildren. Therefore, today I am directing theSecretary of Health and Human Services toapprove reforms for any state on a fast trackthat incorporate one or more of the followingfive strategies.

First, requiring people on Welfare to workand providing adequate child care to permitthem to do it. Delaware recently got anapproval to do this, so have several otherstates, why not all 50?

Second, limiting Welfare to a set numberof years and cutting people off if they turndown jobs. Florida got approval to limitWelfare, provided jobs for those who can't findone and cut off those who refused to work. Sodid 14 other states, why not all 50?

26

Third, requiring fathers to pay childsupport or go to work to payoff what they owe.Michigan got approval to do this, so did 13other states. Taxpayers should not pay whatfathers owe and can pay. Why not all 50states?

Fourth, requiring under age mothers tolive at home and stay in school. Teenmotherhood should not lead to prematureindependence unless the home is a destructiveand dangerous environment. The baby should notbring the right and the money to leave school,stop working, set up a new household andlengthen the period of dependence instead ofshortening it. Vermont got approval to stopdoing this, so did five other states, why notall 50?

And, finally, permitting states to pay thecash value of Welfare and food stamps toprivate employers as wage subsidies when theyhire people to leave Welfare and go to work.Oregon just got approval to do this, so didOhio and Mississippi, Arizona and Virginia cando it as well. Why not all 50 states? Thisso-called privatizing of Welfare reform helps

27

businesses to create jobs, saves taxpayersmoney, moves people from Welfare to work andrecognizes that in the real world of thisdeficit we're not going to be able to have alot of public service jobs to people who can'tgo to work when their time limits run out. Ithink this has real promise.

So, I say to you today, if you pass lawslike these or come up with plans like thesethat require people on Welfare to work, thatcut off benefits after a time certain for thosewho won't work, that make teen mothers stay athome and stay in school, that make parents paychild support or go to work to earn the moneyto do it, or that use Welfare benefits as awage supplement for private employers who givejobs to people on Welfare, if you do that, yousign them, you send them to me and we willapprove them within 30 days. Then we will havereal Welfare reform even as Congress considersit.

(Applause)To further support your actions, I am

directing the Office of Management and Budgetto approve a change in federal regulations so

28

that states can impose tougher sanctions onpeople who refuse to work. Right now when astate reduces someone's Welfare check forfailing to hold up their end of the bargain,the person's food stamp benefit goes up, so itturns out not to be much of a sanction. We'regoing to change that. If your Welfare checkgoes down for refusal to work, your food stamppaYment won't go up any more.

Finally, as another down paYment on ourcommitment to our partnership with you onWelfare reform, today our administration hasreached agreement on Welfare reform experimentsfor West Virginia, utah, Texas and California.Massachusetts has a sweeping proposal on whichagreement has been reached on every issue butone. As I understand it, we're getting muchcloser there. The West Virginia proposal helpstwo-parent families go to work. Utah providesgreater work incentives, but tougher sanctionsfor those who turn down work. California hasadopted the New Jersey system of the familycap. Texas has a very interesting proposal torequire parents on Welfare to prove that theirchildren have been immunized to continue to

29

draw the benefits, and I would say just inresponse to this, this will now obviously bringus to 32 states and I think soon to be 33states with these kinds of experiments.

We also are announcing food stampexperiments today as applied for by Delawareand Virginia. All of these are designed topromote work and responsibility without beingstifled by Washington's one size fits allrules, but I think we need to accelerate thisprocess. I don't like the so-called, "Mother,may I" aspect of the waiver system either.That's why I say, if you act in these fiveareas under the law you have to file anapplication for an experiment, but it will beapproved within 30 days.

And I want to identify other areas likethis. This Texas immunization idea is veryimportant. We have lower immunization ratesthan any advanced country in the world. We aremoving hard at the national level to make surethat the vaccines are affordable. Texas wasthe first state to use national serviceworkers, AmeriCorps volunteers, in the summerof '93 to immunize over 100,000 children and

30

since then they've immunized another 50,000,but if you were to require it of people onpublic assistance, it would have a big impacton getting those numbers up, I bel~eve.

So, as we begin to get more informationabout this and other things, we will be issuingother reforms that if you just ask for them,we'll say yes within 30 days. This is veryimportant.

NOw, let me be clear. Congress still doesneed to pass national legislation. Why?Because I don't think you ought to have to filefor permission every time you do something thatwe already know has worked and that otherstates are doing because we do need nationalchild support standards, time limits, workrequirements and protections for children, andwe do need more national support for childcare.

I hope these efforts that I'm announcingtoday will spur the Congress to act, but wedon't have to wait for them, and we shouldn't.We can do much more. If every state did thefive things that I mentioned here today, everystate, we would change Welfare fundamentally

31

and for the better, and we ought to begin itand we shouldn't wait for Congress to pass alaw. There is common ground on Welfare. Wewant something that's good for children, that'sgood for the Welfare recipients, that's goodfor the taxpayers and that's good for America.We have got to grow the middle class and shrinkthe under class in this country. We cannotpermit this country to split apart. We cannotpermit these income trends which are developingto continue. We have to change it. You willnot recognize this country in anothergeneration if we have 50 years instead of 20years in which half of the middle class nevergets a raise and most of the poor people areyoung folks and their little kids. We have tochange it, and we can do it, but we have toremember what we're trying to do. We're tryingto make the people on Welfare really successfulas workers and parents, and most important,we're trying to make sure this new generationof children does better.

A few months ago I was down in Dallasvisiting one of our AmeriCorps projects and Isaw two pictures that illustrate why I think

32

this issue is so important. One, I was walkingwith a young woman who was my tour guide onthis project. She was a teen mother, had achild out of wedlock, thought she had done thewrong thing, went back and got her GED, and wasin the Americorps Program because she wanted towork in this poor community to help them andearn money to go to college. But the secondperson I met was the real reason we ought to beworking for Welfare reform. I met a youngwoman who was very well spoken, she told me shehad just graduated from a university in thesoutheast, but she was working on this anywayeven though she really didn't have to go on tocollege anymore. And I said, "Why are youdoing this?" She said, "Because I was borninto a family of a Welfare mother, but I had achance to get a good education. I got acollege degree and I want these young people tocome out like I did." Now, that's the kind ofcitizen we want in this country. Those are thekind of people that will turn these disturbingtrends around. Those are the kind of peoplethat will enable us to come together and goforward into the future. We owe them that and

33

we can do it. You and I can.do it now,

Congress can do it this year, and everyone of

us ought to do our part.

Thank you, and God bless you.

(Applause)

34

CERTIFICATEI, Cindy B. Hall, Court Reporter and

Notary Public, certify that the foregoing pages3 - 33, inclusive, comprise a full, true andcorrect transcript taken from my stenographicnotes taken in the Special Plenary Sessiontaken before me as Notary Public on Monday,July 31, 1995, 2:00 p.m., at the SheratonBurlington Hotel & Conference Center,Burlington, Vermont.

Cindy B. Hall


NATIONAL GOVERNORS' ASSOCIATION 87TH ANNUAL MEETING ...

Documents

Transcript of NATIONAL GOVERNORS' ASSOCIATION 87TH ANNUAL MEETING ...