As economy improves, governors debate who deserves the credit

When the nation's governors gathered in Washington a year ago, state budget pictures were dire and tough decisions loomed.

A year later, there is a broad sense among the state executives that they have stepped back from the precipice. What is being fiercely debated here in this political year is just how much credit the federal government, and President Obama in particular, deserves for the turnaround.

Emerging from a meeting with the president and his economic team at the White House on Friday, one Democratic governor called the tone of Republicans "depressing."

"Cheer up!" Vermont Gov. Peter Shumlin implored. "We've got some good news -- a great president creating jobs. And governors who are seeing job creation and, therefore, revenues."

"I'm cheerful," Virginia Gov. Bob McDonnell, a Republican, responded on Saturday. "As an American, I'm delighted to see the unemployment rate going down. But I'd suggest to you that it has more to do with Republican governors."

McDonnell and Chris Christie of New Jersey were elected in 2009, replacing Democrats. In 2010, Republicans picked up six additional governorships to claim the majority. The political gains were attributed in part to the lingering unease about the economy, and dissatisfaction with the president's response.

Fast forward to today. The Bureau of Labor Statistics reported in January that the unemployment rate had declined in 37 states during the month of January, and held steady in 10 more -- continuing a long-term improvement trend. According to the National Conference of State Legislatures, budgets enacted in states last year closed a cumulative shortfall of $91 billion, and through the fall, new gaps were "practically non-existent."

Democrats say the foundation for that improvement was laid by the aggressive federal response to the problem in the form of the economic stimulus package.

"I think it's fair to say that the president and his administration kept this country from going off the cliff," Kentucky Gov. Steve Beshear said Sunday. "We wouldn't have made it in nearly as good a shape through this recession if we had not had the stimulus money to support our education efforts, to support infrastructure efforts so that we could keep people working."

Mitch Daniels of Indiana, serving the final year of his second term, countered that the so-called recovery is the weakest ever from a serious recession.

"And his policies are manifestly part of the problem," he said of the president. "A budget and a State of the Union [address] that doesn't even mention debt. He's really left the field wide open on the issues that ... people will insist be central."

"There's a real disconnect between the states and the federal government," said McDonnell, who chairs the Republican Governors Assn. "Governors have to balance budgets on time without excuses, without delay, are held directly responsible for jobs and energy policies in their states. And yet we see, at least I see, from this president a lack of leadership on jobs, on spending, on debt, on the economy."

Governors of both parties have taken dramatic steps to balance their budgets, but Republicans triggered some of the most high-profile battles. Scott Walker of Wisconsin now faces a recall election after joining with the Republican Legislature to curtail the rights of state unions to collectively bargain. Ohio voters overturned similar legislation last fall. Christie has become a conservative sensation for the successful fight in his state to rein in the powerful teachers union.

Some of those fights will actually work to the president's benefit next fall, Democrats contend.

"All of them took a hard right turn. You've seen the people's reaction. They wanted more jobs, they didn't want unions banned. They wanted more jobs, they didn't want teachers and police officers and firefighters to lose their pensions," Gov. Martin O'Malley, who chairs the Democratic Governors Assn., said in an interview. "We've all had to make tough reforms, including on pensions, but the people aren't going to reward these guys for their right-wing ideology. And it's become so apparent, I believe, to voters."

To say the economy is improving in spite of Obama "is not a compelling message," added Delaware Gov. Jack Markell.

"They basically thought they could get away with a totally negative message. That's not a very good place to be as the economy is getting better."

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