Special Event

President Bush Addresses National Governors Association

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LEON HARRIS, CNN ANCHOR: We want to take you now to the East Room of the White House. President Bush is now about to address the National Governors Association. And you see him there entering the room.

(APPLAUSE)

And President Bush knows these people quite well, as he himself was a member of the National Governors Association. And he has said, in meetings with him in the last few days, that he expects to have quite an open and civil debate with them.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's good to see you all again. I hope everybody had as fun a time last night as Laura and I did. It was -- really enjoyed it. Thank you.

(APPLAUSE)

BUSH: When the history of this administration is written, it will be said the nation's governors had a faithful friend in the White House. I've sat where you are sitting. And I know what it's like to have a good idea and then to wait on the federal government to tell you whether or not you can try it or not.

So let me make this pledge to you all: I'm going to make respect for federalism a priority in this administration.

(APPLAUSE)

BUSH: Respect for federalism begins with an understanding of its philosophy. The framers of the Constitution did not believe in an all-knowing, all-powerful federal government. They believed that our freedom is best preserved when power is dispersed. That is why they limited and enumerated the federal government's powers and reserved the remaining functions of government to the states.

And today I am announcing a new federalism initiative. I will sign a directive creating an interagency working group on federalism. The working group will seek your opinions on the issues that governors and other leaders in local and state government believe should be addressed. The group will look for ways to speed up waivers and to streamline rigid rules and regulations.

And it will be charged with drafting a new executive order on federalism, which will require the departments and agencies to respect the rights of our states and territories.

(APPLAUSE)

BUSH: We look forward to a close relationship. You've got strong advocates in my administration, starting with four former governors: Ashcroft, Thompson, Whitman and Bush.

(LAUGHTER)

BUSH: We'll also have an intergovernmental affairs office run by Ruben Barrales of California who will be responsive to your needs and your requests.

We've just lived through a decade of the most exciting, important things done by government, have been done by governors. In seven years, you've reduced welfare rolls by more than half, improved millions of the lives of your fellow citizens by helping them find work. We've brought new meaning to crime prevention programs. You pioneered education reforms. And many of you have shown how tax relief can reenergize state economies.

In Michigan and Massachusetts, New Jersey and New York, for example, tax relief pumped adrenaline into troubling economies. I saw the same thing happen in Texas when I proposed, fought for and signed meaningful tax relief.

More than half the states have reduced taxes in each and every one of the past three years. Governors deserve more credit than you get when it comes to the prosperity of our country. The surging growth we've seen in states that have reduced taxes gives an answer to the people who say we cannot afford tax cuts. You've shown we can't afford not to cut taxes.

(APPLAUSE)

BUSH: I look forward to this discussion today to discuss how best to devolve authority back to the states. Real change comes from the bottom up, not the top down. The genius of the American system has been to let that change flow upward from neighborhoods to cities to states and then to the federal government. We need to keep that path open to give government a human face and bring decision-making closer to the people.

I'm going to rely upon my friends the governors. I look forward to being in constant contact with you. You see, you bring common sense to the political debate. You're dedicated servants. You respect the will of the people. Our country is better off for your service -- Governor Glendening.

GOV. PARRIS GLENDENING (D), MARYLAND: First of all, Mr. President, let me thank you for your time here this morning, but also a special thanks for the hospitality last night. You and the first lady were an extraordinarily gracious host and hostess. And we enjoyed ourselves very much. And I again want to express our appreciation to you.

(APPLAUSE) GLENDENING: Let me also to thank you for asking your Cabinet to be available to us. I believe we have already met with and had this dialogue with eight or nine different Cabinet members. And this has been very helpful, both for immediate issues before us, as well as establishing relationships.

And, Mr. President, you know, as you've said in your comments, but as a former governor, the states indeed have been the -- kind of the labs for democracy, where we've been able to try a number of different experiments. And we find what seems to work on a common- sense basis. We work with the concerns of our citizens and try to figure things out. And we're so pleased that your basic philosophy about how government should work comes from the perspective of a governor.

And we look forward to forming a very positive partnership with you personally and with the national government on key domestic policy issues. We share many of the same priorities that you do for America. Today, I think, many of our questions and dialogue will focus on three issues, which really has been the lead points for the National Governors Association agenda for the meeting this year: number one, obviously, education; secondly, a great concern about Medicaid and making the program work and what it's doing to our budgets; as well as third, the federal budget, including the tax cut issue.

On that last point, by the way, I might say that some may believe that it is strictly a coincidence that we have this meeting just a few hours before you announce your budget. John Engler and I worked very hard to make sure that we were here right now...

(LAUGHTER)

GLENDENING: ... put the final print on.

BUSH: Thank you.

(LAUGHTER)

GLENDENING: On a serious note, we do appreciate the opportunity to discuss some of these issues. And the education issue I think shows what a good discussion can go and what it can do. I appreciate the fact, as I know my colleagues do, that just last month, you invited 17 of us to the White House for discussion on this issue early in the stage.

We had a discussion I think that was both cordial and based on mutual concerns for education. It was also candid. It addressed those areas of agreement that we have, and some policy differences. I am sure you recall there was some concern about Title 1, of whether the children who were most in need would be protected. And working together, we have in fact been able to reach, I believe, some agreement on this so that Title 1 will be protected.

We appreciate that type of dialogue, which shows the progress we can make. You understand, obviously, as we talked about just a few moments ago, prior to this meeting, that there are still some very substantial disagreements, with most of the Democrats being opposed to vouchers. But in the big picture of the program, this is just one issue.

I am very pleased -- and the governors have all been doing this, I think, across party boundaries, as you know, in terms of your work with us in the past -- but the emphasis on education with regard to setting standards, having people tested, having children tested, and then holding people accountable for that, which is exactly what we're doing as well.

I am pleased that the NGA policy statement that is being announced will indeed cover just about all of these issues. There is one other issue on education that you'll be hearing from several of our colleagues, strong feeling, again, across party boundaries that federal funding for children with special needs, special education, must be funded at a higher level. It's just killing many of our education budgets.

I'll also tell you that we've been working on the Medicaid approach. And some of our colleagues will be talking about this morning. The most important thrust, really, is to make sure that we can continue to provide Medicaid protection to those most in need, but to give the states the flexibility. And if you asked your colleagues here, I think they'd say the single most alarming issue in most of our budgets is the growth in the Medicaid cost.

There is also a lot of discussion going on about your budget. And we appreciate the insight that you've been able to, through your staff, give to us on several of these issues. I will tell you that we all understand the importance for tax relief. Everyone here, I believe, supports some tax reduction. We are in favor of a tax reduction.

States have, of course, done this in the past. In Maryland, we have reduced or eliminated 28 taxes, returning $2.6 billion to taxpayers. I know John Engler, 30 tax reductions or eliminations as well. And just as you did in Texas.

I would emphasize, however, that some of us are very concerned that the tax cut that's being proposed is too large and will not permit funding for some key issues, such as education and prescription drug coverage. But we do look forward in the spirit of cooperation of working with you on the details of this as well.

Let me just say, in conclusion, we appreciate the opportunity to sit down early in these discussions. We look forward to working with you. We think this could be a successful partnership. Our basic priorities are about the same, it's just about how to get there, and at the same time to make sure that the country moves ahead. We wish and you Vice President Cheney Godspeed and our support to try to make this work.

BUSH: Thank you -- Engler.

GOV. JOHN ENGLER (R), MICHIGAN: Well, thank you very much. I'm, Mr. President, delighted to be here today. And the governors are very excited about your administration. We want to begin by also saying thank you to you and Mrs. Bush for last night. What a tremendous evening that was.

We also want to thank you for your cooperation, the administration, throughout this annual Washington meeting. Everyone's been very much available, and the dialogue has been excellent and the relationships are getting built.

I also want to thank you just for the Cabinet itself, a very diverse and talented group, that you've made reference to the former governors. But as we go through the experience that's represented in your Cabinet and the sort of state-friendly attitude, it appears that may have been one of the key criteria in the selection process, and I applaud that.

(LAUGHTER)

ENGLER: These are men and women that we're eager to work with.

And I also want to thank you for the tone that you've set, the tone in this town, the tone in the country. And I think it stems from that goal that you talk so much about, leaving no child behind. But clearly that's everybody's challenge regardless of our party or even those -- we got a couple of independent governors here today.

You know, everyone has an interest in dealing with that top priority that you've outlined: education. And we are grateful for the way you've reached out to all of us to involve us in that discussion. I'm delighted with the comments this morning, and I want to applaud the reference to the permanent things that...

HARRIS: We've been listening here to the opening comments here of the National Governors Association meeting in the East Room of the White House. President Bush making his comments, saying that the nation's governors have a faithful friend in the White House. And judging by the comments that we were just hearing there moments ago from Michigan Governor John Engler and from Maryland's Parris Glendening, the feeling is mutual.

But the governors' agenda this morning is going to include three different -- three main items: education, Medicaid and the federal budget and tax cuts. Tax cuts is a central part of President Bush's agenda. And he touched on that this morning, saying that the governors have proven that tax relief can energize local economies. And that's what he's going to be pushing. He's going to be talking to the governors throughout the day about that, trying to enlist their aid in pushing and building up more support across the country for his tax cut package.

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