The president-elect has set a goal of saving or creating 2.5 million jobs to boost the economy, which experts say has been in recession for the past year. His aides and congressional leaders have been discussing the outlines of a measure that could exceed $500 billion over two years. Congress wants to have it ready for his signature shortly after his Jan. 20 inauguration.
Incoming White House chief of staff Rahm Emanuel, told reporters that in a private portion of the meeting, Obama and Republican and Democratic governors agreed that the measure must include money for infrastructure as well as bureaucratic reforms to make it easier to complete programs without having to cut through piles of red tape.
"The top priority is to invest in these areas," Emanuel said, listing roads, bridges, high-speed rail, water-treatment systems, schools, medical information technology, broadband networks, transportation systems and "green" technology.
"The governors see that as essential to their own economic recovery in their states, and we see it as essentiy will not criticize the incoming administration for raising the deficit as it tries to help them. "I know none of you would do that," he said jokingly. Most states have constitutions that prohibit deficit spending.
The governors, in turn, pledged their cooperation.
Pennsylvania Gov. Ed Rendell, a Democrat who chairs the National Governors Association, said: "We are here with the understanding that we have to be not only participants but to lead in dealing with the financial problems that are upsetting our states."
Obama empathized with governors struggling to craft budgets while state tax revenues fall and an increasing number of people seek state help during the downturn. The president-elect said at least 41 states likely will face budget shortfalls this year or next.
"Jobs are being cut," he said. "Programs for the needy are at risk. Libraries are being closed. Historic sites are being closed."
As he has since his Nov. 4 election, Obama gave a sobering assessment of the challenges ahead and emphasized bipartisanship in finding solutions to the country's ills.
"I don't think anybody here is viewing the situation through rose-colored glasses," he said and warned of potentially disappointing decisions he will likely have to make. "Not all of those choices are going to be popular."
He promised Republican governors "the hand of friendship, the same commitment to partnership" that Democrats receive.
"We are not going to be hampered by ideology in trying to get this country back on track. We want to figure out what works," Obama added, drawing applause that started with Mississippi Gov.
Haley Barbour, a former GOP national chairman.
Biden singled out Palin - his debate adversary from the fall campaign - and said her presence was a sign that both parties are confronting problems together. "Maybe walk outside with me later and say hello to me," he said to laughter from the crowd.
In the private meeting, according to Emanuel, there was a consensus that the Federal Emergency Management Agency was not responsive and needed to be fixed, and discussion about helping states deal with rising health care costs and increasing foreclosure rates.
