The Governors Come to Indy



On August 12, two days before the nation’s largest power blackout, the Washington D.C.-based Economic Policy Institute arranged a news conference call in which a half dozen leading economists discussed the Bush administration’s fiscal policies. George Akerlof, professor of economics at the University of California, Berkeley and a 2001 Nobel Prize winner in economics, delivered a devastating opening remark: “The Bush fiscal policy is the worst policy in over 200 years.” Using data from the Center on Budget and Policy Priorities, Akerlof estimated a 10-year fiscal deficit of almost $6 trillion. “Now, $6 trillion is a very large number,” he said. “It’s so large, the deficits are of such magnitude that they threaten the fiscal integrity of the United States.”

During the question and answer session that followed Akerlof’s opening remarks, I asked what the panelists would say to the nation’s governors, who are forced by state balanced budget amendments to exercise fiscally responsibility, yet bear the brunt of the effects of poor fiscal policies in Washington. Nobel Prize winner Robert M. Solow, professor emeritus at the Massachusetts Institute of Technology, deadpanned, “Complain bitterly.”


Reeling from the combined effects of a dismal U.S. economy and a costly war in Iraq, increased concerns about homeland security and vulnerable energy transmission networks, rising healthcare costs and lowered revenues, 32 governors of the American states, commonwealths and territories converged on Indianapolis Aug. 16­19 for the 95th annual meeting of the National Governors Association (NGA).

Think of the NGA as a trade association that hosts two gatherings a year where colleagues caucus to work on the group’s business agenda and get some time for socializing as well. But unlike dentists, architects, printers, journalists or other members of professional societies, members of the NGA are elected officials and the association business they conduct has an influence on public policy.

Kentucky Governor Paul Patton, chairman of the NGA, said the many “governors-only” sessions provided opportunities “to discuss and examine some of the most important issues facing the states.”

Gov. Patton added that the economy, while not specifically on the agenda, was on everybody’s mind. “I think we’re all concerned, I think the administration is concerned. … I think we’re all trying to figure out what we can do to stimulate the economy. … It’s an ongoing debate.” That’s as close to “complaining bitterly” as it got during the four day event.

Citing the loss of sales tax revenues from electronic commerce coupled with depleted state reserves, Patton said states were struggling to maintain essential services. Asked if he considered environmental remediation and protection part of those essential services, he replied, “I think protection of the environment is just as essential a government service as providing social services or providing for education. In my opinion–and I think most governors will agree–protecting our environment is one of those vital government services that states are in the front line of providing with federal partnership.”


I skipped presentations by Tom Ridge and William Cohen but couldn’t resist sitting in on the NGA’s Natural Resources Committee where Gail Norton, secretary of the U.S. Department of Interior, made a short presentation about the natural gas shortage.

DoI controls nearly one out of every five acres in the country, she said, and Interior-managed lands produce “about a third of the nation’s oil and natural gas and coal.”

The natural gas shortfall is expected to be 50 percent in 50 years, she said, noting that “while the supply remains constant, demand will increase.” Citing the “dramatic impact” of soaring natural gas prices on home utility bills and industrial users, she declared, “We have seen a sea change of use in natural gas.”

This necessitates “moving from a regulatory approach to a market approach” and quickly finding more domestic sources. She outlined the approach her department will take: removing legal obstacles (lawsuits by environmentalists), “streamlining” the permitting process (speeding up paperwork processing), “thoughtfully reviewing land-use restrictions” (opening up offshore sites to drilling) and providing utilities with “flexibility to comply with law.”

She did manage to drop a “green” bomb. “Energy production and environmental protection cannot be competing priorities,” she said. “We look at these lands to see what uses will be appropriate. And sometimes those lands are off limits and should remain off limits. Wilderness areas or national parks are not areas we consider for oil or gas leases.” Special wildlife and scenic areas are respected, she said. “Furthermore, we respect all the moratoria that exist on offshore drilling.”

Given the Bush administration’s eagerness to drill in the Arctic National Wildlife Refuge and other wild places, her statement provided a “pinch me, I’m dreaming” moment.

Afterward, at a briefing with reporters, she mentioned “streamlining” again, so I said, “Madame Secretary, the issue of streamlining is very important to the environmental constituency. It seems to mean you’re going to ramrod transmission lines or pipelines through wilderness areas.”

She didn’t skip a beat as she launched into her response. “As we looked at the way in which all kinds of different comments on rights of way or other things have been handled in the time –this also comes up as we were talking about the President’s Healthy Forest Initiative in trying to deal with treating areas to minimize fire danger. What we found is that we had these applications where one agency does for example a cultural survey to see if there are any archeological sites and then that sits on somebody’s desk for 30 days after that gets finished. Then we do the environmental analysis and that may sit on somebody’s desk for a while. Let’s say there’s an air quality question. That goes to EPA and they study that and then you have the Endangered Species. Well, Fish & Wildlife looks at Endangered Species and again there’s analysis and it goes to somebody’s desk and waits. There’s a lot of things that you can do to speed up that process without in anyway changing the environmental standards that are applied or the analyses that are done.”

“For example,” she continued in her measured, sensible-sounding way, “on the Endangered Species Act, by simply figuring out standardized kinds of questions that might arise or standardized projects–you’ve got three or four projects that affect similar species in one geographic area–handling all of those as a group; that can speed things up a lot. And by having a database for exchange of information so you don’t have different field offices each inventing the wheel when it comes to common scientific questions, there are a number of things we are able to do to really speed up the process and make it much more effective at the same time so we try to do those commonsense approaches.”

Two more questions and two prompt replies and she was gone.

The mesmerizing quality of the encounter stuck with me for hours. The key to her success, and to the success of all the Bush administration’s initiatives from Clear Skies (which are anything but) to No Child Left Behind (as long as their parents can afford private school) to Healthy Forests (genetically modified tree farms crisscrossed by superhighways) is the ability to frame the issues in light of the needs of business interests, equating commercial concerns with the public good while paying lip service to environmental stewardship.

Norton’s comments bolster the League of Conservation Voters’ recent contention that the primary beneficiaries of the administration’s environmental actions have been timber, mining, oil and gas industries and real estate development companies.

Patricio Silva, an attorney with the Natural Resources Defense Council who has worked on energy policy for the past decade, provided a much-needed jolt back to reality. Silva notes that in the last 20 years more than 60 percent of all federal public lands have been opened to leasing and that environmental regulations are routinely waived as hardships for industry.

“Environmental regulations have never hindered accessing the large natural gas deposits in the Rocky Mountains,” he said. Instead, the restrictions are economic. “The western Rockies consist of valleys, mesas, bluffs and incredibly isolated areas that will require building hundreds of miles of roads. That’s why there hasn’t been a lot of drilling,” he said. “Infrastructure is too costly.”

Silva serves as the Midwest Activities Coordinator for NRDC and asserts that no matter what the United States does, it will have to import increasing quantities of natural gas. “That’s the unfortunate reality about the natural gas shortage and not because of any particular issue regarding access to federal public lands or national parks or national monuments or sensitive offshore marine habitats.”

But this kind of talk was absent from the NGA meetings. Many of the governors in attendance made a point of voicing their support for the Bush Administration’s Clean Skies initiative. For example, Colorado Governor Bill Owens, a Republican and co-chair of NGA’s Natural Resources committee said, “There is a disconnect between the facts of what’s happening in the American environment and perception of the public.”

In another context plenty of progressives could agree with that statement. But Owens continued: “[We have] two and a half times the production of electrical generation of coal today versus 1970 and between one-third and one-fifteenth the pollution,” he said. “So it is possible to meet the needs of a growing economy with less pollution.”

It’s this kind of talk that infuriates environmentalists: Bush supporters taking credit for programs they bitterly opposed. Apparently they really can have it both ways, given compliant media and an electorate so overwhelmed by economic hardship they’re too busy trying to earn money to have any time left to complain.

Vicky A. Bailey, assistant secretary for Policy and International Affairs at the U.S. Department of Energy, told the Natural Resources Committee that worldwide electrical consumption is projected to grow at an annual rate of 2.4 percent annually between now and 2025–a 51 percent increase. “The world will need all of the energy it can find and economically bring to market,” she said.

She assured her listeners, including Committee Chair Bob Wise–a Democrat and governor of West Virginia, the nation’s number two coal-producing state–that coal would be needed to fuel increased electrical consumption (up 35 percent by 2025, according to Bailey.) “The President doesn’t believe that we have to sacrifice our coal industry” to achieve reductions in pollutants associated with coal-fired power plants.” She spoke glowingly of so-called clean coal technology.

Her most effusive praise was saved for the Bush administration’s latest techno-fix: FutureGen, a $1 billion project to create a prototype 275-megawatt coal-burning zero-emissions hydrogen power plant in 15 years. The Feds expect to cover 80 percent of the costs.

The governors were eager to hear about this latest science-fiction plan for energy independence and to formulate strategies to land the project in their respective states. Expect a serious bidding war if this project ever gets off the drawing board.


Though big-name governors such as California’s embattled Gray Davis and Florida’s Jeb Bush stayed away, keynote presenters in addition to Sec. Norton included U.S. Department of Homeland Security Secretary Tom Ridge and former U.S. Secretary of Defense William S. Cohen. Utah Governor Michael Leavitt, recently nominated by President Bush to fill the top job at the Environmental Protection Agency, was also in attendance, although he declined to talk about the nomination “in deference to the confirmation process,” according to one of his aides.

The combined presence of so many political leaders in one spot required tight security. A “green zone” surrounded the grounds around the Marriott Hotel in downtown Indianapolis and access was strictly limited.

Arriving at the front door of the Marriott with my highly visible credentials, I got stuck behind a woman in a wheelchair whose access was blocked by a large Indiana State Police trooper. “I’m sorry ma’am, we’re in lockdown,” he said.

“I’m a guest in this hotel,” she said evenly, and held up her room card. “I’m sorry,” he replied and stood firm. Behind him the doors were being pulled shut and a plainclothes security man was waiving his hand in front of the door sensor. It didn’t open. Lots of serious-looking men in suits were speaking into their wrists. The woman finally got the attention of the concierge and she was permitted to enter through a side entrance.

The woman is Teresa Torres, a member of ADAPT, a disabled citizens’ rights group that had booked a block of rooms at the Marriott and held a protest rally in the lobby earlier in the day. “All we want is a chance to talk with the governors,” she said. I told her the NGA didn’t consider the request appropriate for this meeting. “When?” she shot back. “And where? We’ll be there!” ADAPT members are proud of their mobility and want to keep it but feel that they are being pressured into assisted-living centers by Medicaid rules that issue funds to nursing homes, not individuals.

Because they were hotel guests, they had access to the main lobby. Meanwhile, across the street, a noisy group of three dozen protestors filled the police-designated “free speech zone” surrounded by concrete barricades and cops on bikes.

One masked woman holding a “Free Speech Zone” sign objected to the NGA’s policy of limited access. “They’ve closed off the convention to the public and at the same time they’re letting corporations pay to have representatives in the meetings with the governors,” she said. “The spokespeople for the corporations get to influence our public policy but we don’t. We don’t think it’s fair at all that the corporations get to push their agendas [ahead of the] people the governors are supposed to represent.”

Inside the Marriott, Christine LaPaille, director of the NGA’s office of communications, tried to explain the policy. “We’re not really conducting the public’s business, we’re conducting the business of the association,” she said. “And the business of the association is to develop bipartisan policy positions on major issues that we deal with in Washington.”

Her boss, NGA Executive Director Ray Scheppach, denied any behind-the-scenes deal making occurs at NGA events. “We have kicked out organizations that have unfairly lobbied,” he said.

“If the corporations want to lobby, they lobby directly to the state office,” he said, not at NGA meetings where policies are worked out well in advance of the actual meetings.

“I would argue that the people who come to these meetings are generally state coordinators rather than lobbyists,” he said. “It would be a rare situation where a federal lobbyist would be the representative for one of these corporations [at NGA meetings].”

It’s worth noting that presenters to the NGA’s three standing committees displayed an industry-friendly tilt. For example, a Battelle spokesman appeared before the Committee on Economic Development and Commerce in a discussion on biotechnology and the president of Energy Corporation of America urged the Committee on Natural Resources to make sure independent energy producers have “access to resources.”

This shouldn’t come as a big surprise, given that research and support to governors is provided by the NGA’s nonprofit arm, the Center for Best Practices, which is funded by foundation grants and dues from 100 “Corporate Fellows,” including Alcoa, AOL Time Warner, Bechtel, Dow Chemical, Monsanto and Wal-Mart. Several major energy companies are Fellows, too, including American Electric Power, ConocoPhillips, DTE Energy and Exelon/Peco Energy.

Though NGA staff assured me that “environmentalists’ voices are heard,” it is up to individual governors to insist that they have a seat at the table during staff meetings held throughout the year to formulate association policy and establish the agenda for the group’s two yearly meetings. “We’ve got a lot of governors from states who are pretty environmentally conscious and a lot of time their feeling is we’ve got to have these people involved–we have to bring them [environmentalists] in,” Scheppach said, “So that does happen.”

Greenpeace, NRDC and the Sierra Club, as well as ADAPT and the AFL-CIO, were absent from the list of Fellows, and Sheppach acknowledged it’s a valid concern. “Some of it is legitimate criticism. We have discussed whether associations and other groups should in fact be part of the corporate fellows–should that be expanded to other groups.” He said there had been a recent “knock-down, drag-out discussion” about whether to include organized labor. Guess who won?

“Our line is, if your main business is lobbying to try to effect public policy, we didn’t want to bring those people in,” Scheppach said.

Nevertheless, corporate industry representatives are always present during the process in which NGA policies and agendas are set, so the fact that they may not lobby at the NGA’s annual meeting doesn’t reduce the substantial impact they have on the policy making process as a whole. Whether any other constituencies will ever gain similar access is doubtful. Like Teresa Torres, they’ll find the door blocked by an armed agent of the State who merely says, “I’m sorry.”

THOMAS P. HEALY is a freelance writer in Indianapolis. He can be reached at