Bush to issue order shifting power from feds to states

President Bush Monday signed a directive creating a working group of federal officials who were given the task of revamping the federal government's approach to the states.

Speaking at the White House to the nation's governors--in town for their annual mid-winter meeting--Bush said the working group will draw up a new executive order on federalism "which will require the departments and agencies to respect the rights of our states and territories."

The panel, to be comprised of White House and agency officials, will be asked to find ways "to speed up waivers" from federal requirements and to streamline rules and regulations, Bush said. Bush convened a private meeting with the governors, where he indicated that his upcoming budget will provide more spending for Medicaid.

The governors said their top priorities include securing greater funding for special education and Medicaid, while gaining for states greater flexibility in how they spend the funds.

The states also are seeking a more lenient policy on the granting of waivers from Medicaid program requirements, an issue which the governors said they pressed during an earlier "breakout" session with HHS Secretary Tommy Thompson.

Democratic Gov. Parris Glendening of Maryland, who chairs the National Governors' Association, told CongressDaily after the meeting that he was dissatisfied with Bush's plans for special education, which he said do not include a spending increase. Governors at the meeting said Bush had indicated he would instead make it easier for states to transfer funds out of other programs for use on special education. But Glendening noted the governors were pleased with Bush's general commitment to allowing states greater choice in how they use their federal education funds.

Glendening added that Bush stated "very strongly" that there will be more funding in his budget for Medicaid. Glendening and GOP Gov. Don Sundquist of Tennessee said Thompson had indicated he would be flexible in granting federal waivers from Medicaid requirements.

Glendening noted that gaining more flexibility for state use of Medicaid funds would take new legislation that was unlikely to pass anytime soon.

While happy with the increased funding and prospect of more waivers, the governors are also beginning to draw up plans to reform the Medicaid system.

However, Glendening said Bush indicated that restructuring Medicaid is "not going to be on the top of his agenda because he's focused on the tax cut [and] he's focused on education."