Governors hanging in till Jan. 20

With congressional action on a fiscal stimulus package by year's end far from certain, Gov. Martin O'Malley and other state leaders are pinning their hopes for the economy and besieged state budgets on an Obama administration that takes over in January.

Barack Obama, in the full swing of his transition to the White House, pledged yesterday that a "big" stimulus package to "jolt the economy back into shape" is a top priority. Already, O'Malley and Democratic governors around the nation are compiling wish lists that include more federal support for health care and infrastructure and more resources for National Guard units stretched thin by Iraq deployments.


With Obama's platform recognizing the Chesapeake Bay as a "national treasure," O'Malley's administration plans to seek more federal funding for cleanup and stringent regulatory action against polluters by the Environmental Protection Agency.

Congressional Democrats could put the package on Obama's desk on his first day on the job, crafted with the assistance of the incoming administration's economic team that was unveiled yesterday.


Democratic governors have been talking about the possibilities for months.

At a Philadelphia fundraiser where politicians hobnobbed with rocker Jon Bon Jovi last month, O'Malley says, Obama pulled him aside to pepper him with questions about how Maryland was faring in the economic doldrums and what he could do as president to help.

It is a well-worn story O'Malley has repeated to imply that the fortunes of Maryland - and the nation - would improve under Obama. After raising taxes, making steep budget cuts and persuading voters to approve slot machine gambling, the Democratic governor is turning to the federal government.

"Virtually all the years I served as mayor, and then these years as governor, part of my assumption every day was that ... there would be absolutely no help coming from my national government to the important work done by cities and by states," a visibly emotional O'Malley said the night of Obama's election. "And now we get to breathe deep and look forward to a new tomorrow."

Expectations are sure to be tempered in the coming months, as Obama takes office during a spreading financial crisis that's straining the federal budget. Obama already has conceded he will have to prioritize his own agenda until the economy recovers.

Nonetheless, as political favors are invariably sought from a new administration, governors are hoping to call in their chits after campaigning for Obama.

Despite being an early backer of Hillary Clinton for the Democratic nomination, O'Malley has made a point of saying he fell solidly behind Obama's candidacy. He took the lead in raising $1 million for the Obama-Biden ticket and other Democratic races, an effort that included a fundraiser at Baltimore's new Hilton hotel a week before the election. He also made several swings through the key states of Virginia and Pennsylvania in the final weeks of the campaign, in part to help bring Clinton supporters on board.

With the changeover in Washington, O'Malley may be able to capitalize on relationships he has built over his career. His labor secretary, Thomas E. Perez, has taken a high-profile role on Obama's transition team, responsible for justice, health and other agencies. And O'Malley has worked closely with Virginia Gov. Tim Kaine, an early Obama supporter.


Ties in Congress, especially in the House, might prove useful as well. Speaker Nancy Pelosi was raised in Baltimore, and her brother Thomas L.J. D'Alesandro III is a confidant and political donor to O'Malley. The chamber's second-in-charge, Rep. Steny H. Hoyer, is from Maryland.

But the states and districts most likely to get attention from an Obama administration are those where the president-elect narrowly won, said Pietro Nivola, who has studied state-federal relations at the Brookings Institution in Washington. Maryland, a solid Democratic stronghold, was a sure win for Obama, who barely campaigned in the state.

"States that tilted Democratic this time - sometimes unexpectedly in the cases of Indiana, North Carolina and Virginia - will be closely observed by politicians," Nivola said. "The party wants to try to consolidate and firm up its margins in some of these states that have just recently gone from red to purple and possibly to blue."

Democratic governors control 29 statehouses, the most since 1994, having increased their numbers through the election of O'Malley in 2006 and by winning this year in Washington, North Carolina and Missouri. The gubernatorial juggernaut adds to the Democratic power base in the nation's capital, where the party widened its majority in Congress.

States are expected to seek a share of any economic stimulus package that could include new spending on public works projects, aid to states facing a surge in Medicaid enrollment, an extension of unemployment benefits as some exhaust state benefits, and increased food stamps.

In 2003, Congress and the Bush administration directed $10 billion to stimulate state economies hurt by a recession that began in March 2001. Maryland received more than $180 million under that plan.


Republican opposition could stall action by the lame-duck Congress. Many governors also are pushing for help for failing American automakers, though that too might wait until next year.

O'Malley wrote to Treasury Secretary Henry M. Paulson Jr. this week to urge such a move, saying that while the state has lost automotive jobs in recent years, the industry still supports more than 2,400 workers here. He pointed to General Motors' transmission plant in Baltimore County.

Collectively, states have reported more than $40 billion in budget shortfalls this fiscal year as the national economic downturn eats away at tax revenue and jobs. Most, including Maryland, must raise taxes or cut spending to balance their budgets, moves that could offset the effectiveness of any federal help. Maryland officials recently cut $300 million from the operating budget.

State officials also will closely watch how the Obama administration wields its regulatory power. "State authority has been greatly undermined by the current administration with various rules," said Michael Bird, federal affairs counsel for the National Conference of State Legislatures, a bipartisan group.

Obama has said he intends to reverse the Bush administration's decision to deny a waiver to allow "clean car" laws passed by California, Maryland and other states to reduce pollution from cars and trucks. Bush argued for a national standard and signed a federal law to increase fuel-efficiency standards.

States, including Maryland, have sued the Bush administration, but an executive order from Obama could render that court fight moot.


The state legislature conference has written to Obama, expressing hope that his stint as an Illinois state lawmaker would make him an ally. Some officials said states weren't able to foster such a relationship with Bush, despite his coming from the governor's mansion in Texas.

"Even though the current president also came from state government," Bird said, "the experience has not always been very cooperative or productive."

Baltimore Sun reporter Gadi Dechter contributed to this article.