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Govs. Markell, Walker prepare for sequestration

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    Will looming budget cuts squeeze states into recession?

  • Duration 11:09
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And headed for the sequester the nation's governors around town and they are warning those federal spending cuts may drive their states back into recession.

Here to talk about a Republican governor Scott Walker of Wisconsin and democratic governor jock mark -- of Delaware -- of the National Governors Association and gentlemen welcome.

You -- -- -- let's start with a sequester and what it will mean to your were.

His State's Governor Walker according to a study it will cost Wisconsin one point eight billion dollars and 36000.

Jobs.

And mean big cuts and health services for mothers and children in special education funding.

How worried are you about the sequester in terms of Wisconsin and do you support congressional Republicans.

Willingness to let the case -- that cuts kick again.

If the alternative is to raise taxes -- the Obama idea.

Why -- all.

Assist -- have a real concern about what the impact is going to be in a respective states both in terms of the potential the cuts if they do nothing but also in terms of what some of the alternatives might -- I mean we -- had the first wave of impact of tax increases from the last budget deal just a little bit over a month ago.

Now we're seeing in Beckham in a typical family making 50000 dollars -- -- paying a thousand dollars more more a year in terms of taxes that's money out of the economy as well.

And so if we're not careful a tax increase -- wanted to be a problem severe cuts in the other game could be a problem.

Well the biggest problems we have here in this city is too many times they kick the can doesn't matter which party down down.

The block if you will.

And I don't really solve the problems our -- is between now on March 1 to find a way to provide some better alternatives to the cuts in the sequester but you wouldn't support as the the Obama -- a mix of tax hikes and spending -- a little confused because when the president proposed to sequester back in 2011 he said the cuts are so bad in this.

The congress and administration will come back and provide a better alternative of cuts.

Not new taxes very had a tax increases that came at the end of this last year we avoided at least temporarily avoided the fiscal cliff.

The challenge now is to find better long term ways to solve the fiscal problems facing this country right here in Washington.

Governor mark -- you have a much smaller impact of the sequester in Delaware.

How worried -- you about -- were very concerned particularly the effect on the economy and I think a lot of us feel like work.

After some very difficult years were starting to come out of -- things are getting a little bit better.

And unfortunately the reset to the this sequester could put us right back where we work you know.

Least we spend so much time as governors trying to put people back to work and so one of the most frustrating conversations any governor can have.

Is with an employer who says I've got vacancies but let's say I can't find people with the right skills.

-- one of the effects of the sequester could be for example to hit workforce development training funds that's crazy.

And what one of the things we've got -- -- we've got to figure out a way to people putting people back to work.

As opposed to was -- cuts like that you literally saying that the -- could push your state other states back into recession I don't think there's any doubt about -- and I think the Congressional Budget Office estimates estimates there can be 750000.

Fewer jobs you know people talk what's the effect on the on states of the sequester the real question is what is the impact on the people that we serve states -- -- -- a vehicle for service.

And so whether it's the fact that things like head start special led.

Substance abuse training low income.

Energy assistance or work first development funds.

That all hits us it -- our budget that the real big impact there could be on the economy and jobs governor mark held.

Switching subjects Vice President Biden of course lives in the state of Delaware and recently have some advice for his wife Jill about how -- defenders -- Let's take a look.

I told my wife we live in an area that's what -- -- -- somewhat secluded.

-- -- if there's ever a problem just walk out on the balcony here walk out.

Put that double barrel shotgun and fired two blasts.

Outside the house.

You have a smile on your face what do you think of that well I think the point that he was making is that people are entitled to.

Have have weapons use and for self defense and he's obviously right about that.

In fact out wouldn't what he just suggested -- -- light.

It out it went on the blogs that in Delaware you have to have a fear of your life before you can use deadly force I think what he's really saying is that she -- if she was in danger than she's been she has a weapon and -- can use it.

But in fact it would be illegal I just shot -- -- I think maybe he doesn't live in the city -- and he does live and of fairly secure secluded area so I'd.

It's an I was not the -- the troubled by cup.

The kind.

That's a very politic answer there.

Deficits he's the most famous constituent of your state.

Governor Walker let's turn to a specific -- -- reveal the last time we talked you were battling and beating.

The public workers' unions on their collective bargaining rights.

The issue is still in the -- still being appealed but what has the effect of -- reform's been both on.

This the budget in this for the state and for localities and for the union.

Well it's been positive for the taxpayers -- taxpayers want.

Now in a recall election they want every time we've been upheld in the courts in both.

State courts and in the federal courts in the real impact we just announced last Wednesday in our state budget was we went two years ago from a three point six billion dollar budget deficit.

To nearly half a billion dollar surplus we took that money invested in tax cuts.

We increase funding based on performance for schools and invest in things like Jack talked about -- workforce development.

Those are things were able to do specifically come from the fact that the public workers' unions couldn't.

Negotiate couldn't collectively blunt terms a collective bargaining we knew two years ago unlike what they're doing here Washington we have to tackle the biggest part of our budget and Washington -- not tackling kind of missed.

We -- the biggest driver and our budget every State's different.

Was it the local governments and we knew we -- gonna reduce that the only way we could do that without crippling local services.

Was -- -- -- much as I -- and a local official for eight years was empowering local governments.

To be able to make changes not just in terms of pension and health care contributions but even things like staffing overtime abuse.

Work rule changes its schedule things that make things.

More financially be able available for schools and local governments we did that and in turn we are able to bounce -- budget our economy got better.

Let's turn to another sort of because one of the big.

Jobs -- all the governors are gonna phase over the next year is beginning to implement obamacare which kicks in officially.

The following year the beginning of 2014 governor mark -- you've agreed to expand to the expansion of Medicaid in your state.

And you're gonna work win the -- in summing up the health exchange in this day is to become a partnership between Delaware and and the federal government.

With all the spending problems here in Washington are you worried that maybe not the first year of the second here but at some point you're gonna end up footing the bill for obamacare.

Well first of -- and I think they've made it very clear that they intend to stick with the deal that was offered to the states in terms of Medicaid expansion we made that decision for reasons of math.

We get to cover additional people people who otherwise would not have had coverage would have ended up in the most expensive place -- ball which is emergency room.

The federal government's gonna pick up a 100% because for three years 90% thereafter.

In addition for us there's actually a higher reimbursement for people that were already serving for so for Delaware taxpayers that made sense.

The really exciting move about health care though is not what's happening in Washington that's what it's what's happening -- states.

Around the country some of the incredible innovations to move away from the fee for service model some great work being done and bargain in Arkansas.

And many other states and a number states including Delaware just last week received innovation grants from the Department of Health and Human Services to focus on exactly that.

Throughout I want to stay with obamacare though -- if you -- because Governor -- you made a very different decision you have.

Refuse the expanded Medicaid.

Even though the -- were talking about picking up all the bosses governor mark -- mountains for the first three years.

And 90% thereafter and you also said we're not gonna run.

That the health exchange we're gonna let Washington do it.

How come.

Well for us it every -- a little different governor mark -- I talked about this not only between Democrats Republicans but even sometimes and its members of the same party in our case.

It was a better deal for us not to take the funds.

And instead were able to do an alternative we've reduced the number of uninsured by 224580.

-- -- reduce the number of people on Medicaid.

-- 87000 people into the marketplace.

And replace them with 82000 people who currently living in poverty today but were eligible.

Under cap in the past my predecessors they get.

They're getting a little in the weeds that I want to ask you because you pointed out the fact that that there has been some difference.

Within the parties as you well know seven or Republican governors have agreed to the expansion of Medicare -- -- a 133%.

Of poverty right here they are.

Up on the screen including well -- conservatives like Rick Scott Scott of Florida this week.

John Kasich of Ohio and they say they're doing it because of this.

If you will free money the fact that they said our our taxpayers are having to pay into the system.

So they ought to get the benefits of -- and at the government's willing to pay a 100% of the cost we'd be crazy not to accept it and -- -- that your decision.

Is one gonna cost your state millions of dollars -- gonna mean a lot of people in Wisconsin are.

Uninsured -- -- but again every -- different that's why won't criticize them be -- those Republicans -- the Democrats because every state.

Is different our case we actually reduce the number of uninsured.

We reduce the number of people on Medicaid and we actually saved a little bit of money now we've been dead as part of it also that you're afraid.

That the feds aren't gonna live up to this no doubt about it federal government has a sixteen and half trillion dollar debt today.

Just for my cost to continue Medicaid and state -- Wisconsin without any expansion to cost me 644 million dollars more in this budget.

39% of that is because the federal government on an Affordable Care Act and other provisions is pulling back.

The previous commitments that's today that's without the expansion -- look at that and say.

If they can't -- if congress can't fulfill the commitments they've made.

I'm concerned about where they're going to be in the future but that's unique to Wisconsin let me but but well it doesn't -- to Wisconsin could send them but the numbers you -- what I'm saying is every State's a little bit different as -- as -- governor mark.

Now why is it that he doesn't trust Washington and you do well I think actually I -- the bigger story in the one and I think a lot of people miss is the fact that no matter what happened with -- with respect to the Affordable Care Act.

What this country has to do is move away from what has become sick care system where people get paid based on how many procedures they do.

To a health care system where people get paid based on quality when we really do have the opportunity.

To improve -- quality reduce costs simultaneously the Affordable Care Act.

Provides a foundation and I think that obamacare was supposed to do but it didn't do that but no I think guys I think -- You're taking important look at a point in time first of -- -- well first of all health care rates have not increased at the same rate that they had before.

And secondly if you're looking at some of the innovations around the country we just heard yesterday in our governors only meeting.

From some of that from some of the governors were already saying really significant improvements and reduction of cost are gonna have to leave -- -- Governor Walker governor mark -- thank you both so much for coming in.

Thank you please come back --

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