House Democratic leaders yesterday said they will have an economic recovery package ready for Congress to consider when it begins its new session on Jan. 6 that includes billions of dollars for infrastructure projects and other initiatives to spur job growth, as well as proposals from President-elect Barack Obama.

"I think we will be coming to some agreement today," House Speaker Nancy Pelosi told reporters yesterday before meeting with state officials including Pennsylvania Gov. Edward Rendell and Vermont Gov. Jim Douglas.

"We have heard the governors ... I'll meet with our members next week," she said. "I've already asked [Rep. David Obey, D-Wis.], chairman of the Appropriations Committee, to expand the package that we have. I've talked to the chairmen of various committees ... We hope to be ready when Congress comes into session as the president-elect makes his imprint that we all invite and look forward to incorporating."

Meanwhile, Obama and Vice President-elect Joe Biden will talk to governors about the stimulus package and the relationship between the federal and state governments as they attend at National Governors Association meeting this morning in Philadelphia.

Obama said last week he will work closely with state and local officials to craft a two-year, multibillion-dollar stimulus plan that provides funding for transportation and infrastructure projects that are already underway or ready to go.

At their meeting yesterday with Pelosi and Rep. George Miller, D-Calif., chairman of the House Democratic Policy Committee, Rendell and Douglas said the economic recovery package should include increased infrastructure spending with a focus on renewable energy projects.

States have at least $136 billion of ready-to-go infrastructure projects that could spur job growth and stabilize state economies as they deal with mounting budget shortfalls, the two governors said.

Rendell suggested Congress include in the plan a "use it or lose it" function so that states with ready-to-go infrastructure projects would use the funds to immediately stimulate the economy.

The House passed a stimulus bill in September that included billions of dollars for states for infrastructure projects, but it did not make it through the Senate.

At a press conference following the meeting, Rendell and Douglas, chairman and vice chairman of NGA, joined by Joe Hackney, president of the National Council of State Legislatures, called on Congress to act "as soon as possible" to craft the package because critical state spending needs, including growing Medicaid costs, may not be met because of expanding budget shortfalls.

NCSL and NGA officials said that states could face more than $140 billion of shortfalls, but Rendell told reporters that number is "conservative" and could grow to as much as $200 billion over fiscal 2009 and 2010.

The NCSL said that 20 states have already cut about $7.6 billion from their budgets for fiscal 2009, 30 states expect additional shortfalls of about $30 billion, and 25 states expect $60 billion of shortfalls for fiscal 2010.

"We do need federal help ... or we will face cuts and/or raise taxes," Rendell said, adding that states have done as much cutting to their budgets as they can without cutting necessary services.

NGA and NCSL officials urged Congress to include in the package a two-year enhancement of federal funds for Medicaid, along with increased support for unemployment benefits and food stamps.

Douglas suggested during the press conference that the federal government should provide states with a significantly larger amount of funds for Medicaid than the $20 billion Congress approved in 2003 after the economic downturn earlier this decade.

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