Obama, governors to talk about state aid

Governors, arguing that state governments are good recovery engines, say they want to ensure they'll get a hunk of the next U.S. economic stimulus package.

President-elect Barack Obama was scheduled to meet Tuesday with the majority of the nation's governors meeting in Philadelphia where they're expected to press for a goodly amount of the multibillion-dollar package his advisers and Democratic congressional leaders are fleshing out, the Philadelphia Inquirer reported.

State governments can help revitalize the nation's economy, leaders say, because they're capable of quickly delivering increased federal spending on infrastructure projects and social programs.

By no means are we looking for the federal government to relieve us of our responsibilities, said National Governors Association Chairman and Pennsylvania Gov. Ed Rendell, but we do need help.

Organizers said they expect 45 governors to attend the bipartisan meeting.

Among the wish-list items, governors say they want a two-year increase in the federal share of the cost of Medicaid, federal investments in highway construction and other infrastructure projects, an extension of unemployment benefits and more funds for federal food stamps.

Last week, Obama directed his economic advisers to develop a stimulus plan that would save or create 2.5 million jobs during the next two years, which analysts estimate could cost up to $700 billion -- the same amount Congress committed to rescuing U.S. financial institutions and markets. The president-elect said he wanted to target some of the new aid to state and local governments, but hasn't assigned a dollar figure.