The Pew Charitable Trusts

The Bush administration has begun seeking compromise in two contentious disputes with states--over Medicaid and education--in a sign that the White House in this election year prefers to avoid confrontation with governors, the majority of whom are Republican.

As the nation's governors convened in Washington, D.C., for a National Governors Association meeting Feb. 21-24, the administration announced it will drop plans to crack down on states that use creative but questionable strategies to boost their federal reimbursements for Medicaid, the federal-state health plan for poor people.

"I intend to enter into consultations on the proposal with the states .... I can assure you that this proposal will not be implemented until this process is completed, and look forward to our consultations," Tommy G. Thompson, secretary of the U.S. Department of Health and Human Services, wrote in a Feb. 20 letter to the NGA.

The HHS action on Medicaid comes on the heels of a major announcement from the administration on the No Child Left Behind education law, the sweeping Bush plan that requires states to test and monitor students' academic progress. On Feb. 19, U.S. Department of Education Secretary Rod Paige announced new policies giving states "greater flexibility" in testing immigrant students who don't yet speak English well.

Both Medicaid and the No Child Left Behind law have drawn fire from governors, particularly Democrats, who have complained that the federal government is not giving states enough money or flexibility to carry out those laws. Both issues were expected to come up when governors meet President Bush and his Cabinet at the White House on Monday (Feb. 23).

The administration's offer to consult more on Medicaid reimbursements "was reassuring to a point that at least we're going to be listened to," said Iowa Gov. Tom Vilsack (D), who heads the Democratic Governors' Association. "The concern is whether or not there will be a real willingness or whether this is just simply delaying a decision that's already been made," he told Stateline.org.

Governors also praised the relaxation of one of the most criticized rules under No Child Left Behind. "We're glad to see that Secretary Paige this past week addressed the concerns we had about students who speak English as a second language," said Virginia Gov. Mark Warner (D), vice chairman of the NGA. NGA Chairman Gov. Dirk Kempthorne, an Idaho Republican, said: "The administration is responding to the suggestions coming from the states."

The nation's governors, numbering 28 Republicans and 22 Democrats, kicked off their annual winter meeting with dueling accounts of the economy and partisan bickering over the Bush administration's willingness to help states.

Democratic governors said they plan to focus on the U.S. jobs picture when they visit the White House. New Mexico Gov. Bill Richardson (D) said the meeting would be "respectful" but could get testy.

Vilsack faulted the president's economic team for backpedaling on its recent prediction of job growth and for suggesting that outsourcing U.S. jobs is good for the economy.

"The fact the National Governors Association is spending a part of its plenary session ... on a discussion of manufacturing job losses suggests to me that there is an understanding on the part of all governors that jobs are an issue," Vilsack told Stateline.org.

Republican governors insisted that the president's economic plan is creating more jobs, making the U.S. economy more competitive and improving workers' skills through education reforms. "If they [Democrats] unfairly attack the president, we're going to defend him," Gov. Bob Taft (R-Ohio), head of the Republican Governors Association, told Stateline.org after an RGA press conference.

The parties also, not surprisingly, offered disparate views of the states' relationship with the White House. Gov. Richardson, the Democrat from New Mexico, said states are frustrated that Congress passes expensive laws that states then must enforce without enough federal money. The administration is essentially telling states "You're on your own," Richardson said.

Republicans, however, praised the administration for responding to states' feedback on key issues, including No Child Left Behind. "This administration is very receptive" to states' ideas, Nevada Gov. Kenny C. Guinin (R) said. He predicted that the sweeping education law "will be massaged" and that the states will have an active role in improving plans for its enforcement.

Several governors told Stateline.org that despite the election-year rhetoric, governors of both parties hope to join forces to lobby the White House and Congress to pass legislation important to states. These key measures include a six-year extension of a highway program, increased funds for special education and more clarity on the issue of taxing Internet access.

Gov. Linda Lingle (R-Hawaii) credited the new NGA leadership of Kempthorne and Warner for mending fences among governors after a bitter spat last year. "Last year there was a tremendous partisan tension in the air with the NGA ... just bashing the president as opposed to dealing with policy issues," Lingle told Stateline.org. She said Hawaii stopped paying dues to the NGA last year, but this year plans to pay the full tab.

Gay marriage is not on the official NGA agenda because Kempthorne said it is an issue for states individually to tackle. Republican Colorado Gov. Bill Owens, however, spoke in favor of an amendment to the U.S. Constitution to make clear that marriage is between a man and a woman. "We're in the situation where the supreme court in one state might be able to have an impact on all of our laws," Owens said. 

Stateline.org's Erin Madigan contributed to this report.