Breaking the logjam: governors to the rescue

WASHINGTON — WASHINGTON -- Have the nation's governors become a "surrogate summit" to reach middle-ground accords beyond the reach of Capitol Hill Republicans and the Clinton White House?

So it seemed as the governors completed their winter meeting last week.


In a demonstration of policy acumen and political compromise, they not only crafted solutions to the welfare and Medicaid dilemmas but did it by a unanimous, bipartisan vote.

For a quarter-century, the governors have been sharpening their national policy-making skills, helping for example to hammer out the ground-breaking 1988 welfare-reform bill and 1989 national education goals.


What's more, if you count vice presidents and chiefs of staff, there have been former governors serving in the White House for 26 years, from Spiro Agnew and Nelson Rockefeller to Ronald Reagan and Jimmy Carter, John Sununu and Bill Clinton.

Until now, the country's toughest legislative and budget compromises have been hammered out by seven to 11 key Washington figures. They have included White House chiefs of staff and budget directors, the House speaker, Senate and House minority and majority leaders, and sometimes budget committee chairs and others.

The combination of a Democratic president and the Republican takeover of the House of Representatives raised the political stakes so high that the familiar legislative-executive negotiators -- even when President Clinton finally came to the table -- couldn't reach agreement.

Astronomical rises

Enter the governors, who are responsible for making welfare and Medicaid work in their own states. Astronomical rises in Medicaid costs have ravaged their budgets.

In December, as official Washington stewed in stalled budget talks and even closed down the government, the lead negotiators of the National Governors' Association -- Chairman Tommy Thompson, R-Wis., Roy Romer, D-Colo., John Engler, R-Mich., Lawton Chiles, D-Fla., Mike Levitt, R-Utah, and Robert J. Miller, D-Nev. -- began some 50 hours of discussions to craft a compromise.

When the full governors' association assembled in Washington February 3, the gubernatorial "gang of six" continued around-the-clock negotiations. Tentative agreements, Mr. Thompson later recalled, kept falling apart. Except for Mr. Miller of Nevada, each governor in the group walked away from the table in anger at least once.

Finally, Governor Thompson recalled, "the governors forgot for a time whether they were Republicans or Democrats. They knew they had a job to do. And they did it."


And while the compromise they crafted has won general commendation from President Clinton, House Speaker Newt Gingrich and Senate Majority Leader Bob Dole, it is fragile. It might be blown out of the water if the Congressional Budget Office finds its estimates of costs out of whack.

The compromise fulfills the Republicans' (and most governors') dream of turning welfare and Medicaid into block grants to the states -- a process already in motion through the 50 welfare waivers for 35 states, and 12 major Medicaid waivers, all granted on ex-Governor Clinton's watch.

Welfare, under the governors' compromise, becomes a fundamentally state-directed program. States will also have full power to reshape health services for Medicaid.

The governors' draft also makes it much harder for disgruntled recipients to sue states for alleged infringement of federal Medicaid law. (With some 8,000 cases nationwide, the suits have been a huge thorn in the states' side.)

But the Democrats won critical concessions to protect vulnerable populations.

An extra $4 billion was added for child care for people trying to leave the welfare rolls. A $1 billion contingency fund will buffer states and preserve welfare benefits in times of hardship.


For Medicaid, continued benefits are guaranteed for pregnant women and children living in poverty, the impoverished elderly and other imperiled populations. Significant ongoing federal funding is guaranteed, and there's an "insurance umbrella" for unexpected interstate migration or economic downturns.

The compromise, if Congress approves and President Clinton signs, will let the nation start the block-grant era with some federal protections built in.

The Republicans' big priority -- the shift to block grants -- gets realized. Republican governors control virtually all the large states save Florida. Seventy-two percent of federal aid flows through GOP governors.

What happens in the states is critical to the Republican revolution -- a fact that the freshman House Republicans, who might block a compromise, are likely to be hearing in no uncertain terms from Speaker Gingrich.

"Liberal" Republicans

One can argue -- oddly enough -- that the governors' association has a "liberal Republican" cast. But why? Don't primary-election returns suggest liberal Republicans are virtually extinct?


The answer: Liberal or moderate Republicanism often defines American middle ground. And when governors, operating pragmatists by necessity, have to agree on policy, that's where they end up.

Now their agreement on the critically difficult Medicaid and welfare issues will create powerful pressure on President Clinton and Congress to reach a full-scale budget agreement. For governors with 50 states to manage at the same time, it's no mean achievement.

Neal R. Peirce writes a column on state and urban affairs.