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Governors urge Congress not to kill their states' recovery

WASHINGTON — Their states on the brink of financial catastrophe, governors pleaded Saturday for the divided federal government to avoid doing anything that would hamper the tenuous economic recovery back home.

Their message to Washington: prevent a government shutdown, abstain from spending cuts that dramatically will affect states, and end even preliminary discussions about allowing states to declare bankruptcy.

"Anything that Congress does that will undermine our recovery is quite troublesome to us," said Washington Gov. Christine Gregoire, head of the National Governors Association, as she opened the bipartisan group's winter meeting. "We're asking for cooperation."

"We don't need a hiccup now in our recovery," she added. "We are fragile."

States have made $75 billion in budget cuts and raised taxes by $33 billion over the past two years to make up for budget shortfalls caused by the recession. Governors drained reserve cash funds and oversaw several rounds of severe budget cuts, so much so that Republicans and Democrats alike now are focused on how to remake state governments.

The overall economic situation in states is improving.

"Recovering, not recovered," as Massachusetts Gov. Deval Patrick, a Democrat, put it.

High unemployment persists. Even more dire budget situations are to come.

Over the next 21/2 years, states face an estimated $175 billion more in budget gaps that they have no choice but to fill. The hole is caused partly because an initial infusion of cash from President Barack Obama's economic stimulus law, as well as extensions of that money, will dry up in June.

Buffett sees better future for the U.S.

Billionaire Warren Buffett wants Americans to be optimistic about the country's future but wary about borrowing money and the profits figures reported by public companies. Buffett said in his annual letter to Berkshire Hathaway shareholders Saturday that he still believes America's best days are ahead. "Commentators today often talk of 'great uncertainty.' But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001," Buffett wrote, referring to the days before the Pearl Harbor attack, a stock market crash and terrorist attacks in the United States. "No matter how serene today may be, tomorrow is always uncertain. Don't let that reality spook you." He said a housing recovery will likely begin within the next year.

Governors urge Congress not to kill their states' recovery 02/26/11 [Last modified: Saturday, February 26, 2011 9:13pm]

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