Following in the footsteps of financial institutions and automakers, the nation’s Governors, represented by Kansas’ Kathleen Sebelius, asked President-elect Obama today to provide a bailout of states.

Sebelius , a Democrat and vigorous Obama supporter who is rumored to be a candidate for a cabinet appointment, formally presented Obama with a request on behalf of the National Governors Association for $40 billion to help fund health care assistance for the poor.

“President-Elect Obama made it clear that he wanted input and ideas from governors about the focus and size of the stimulus package which he plans to propose to help get the economy back on track,” Sebelius said in a statement issued after the meeting.

Presenting a separate request – for $136 billion to fund infrastructure projects – was California Gov. Arnold Schwarzenegger.

Sebelius said she was optimistic that the Governors’ proposals would help “frame the president-elect’s proposals and will be very helpful to Kansas as we cope with continuing to deliver essential services in a declining economy.”

Alan Cobb, executive director of the Kansas chapter of Americans for Prosperity, said it was disingeneous to attribute the financial condition of Kansas to the faltering economy, though the state of the economy has worsened Kansas’ budget woes.

“Bailouts reward irresponsible behavior,” Cobb said. “The fact is if Kansas had simply held spending to the rate of inflation or even slightly higher over the past few years, today instead of looking at a budget shortfall, we’d have money in the bank.”

If no corrective action is taken, Kansas will face a budget shortfall of $147 million at the end of the current fiscal year. That deficit could grow to over $1 billion in the following fiscal year.

Not all Governors are on board with the bailout plan. Writing in the Wall Street Journal recently, Texas Governor Rick Perry and South Carolina Governor Mark Sanford, both Republicans, said the largess being dispensed by the federal government was creating a “bailout mentality, where we look to government rather than ourselves for solutions.”

Perry and Sanford claimed that the government has signaled a willingness to spend as much as $7.7 trillion that it does not have to stimulate the economy and bail out struggling industries.

“That trillion-dollar figure is the tip of the iceberg when it comes to checks written by the federal government that it can't cash. Former U.S. Comptroller General David Walker puts our nation's total debt and unpaid promises, like Social Security, at roughly $52 trillion -- an invisible mortgage of $450,000 on every American household,” Perry and Sanford wrote.

Perry and Sanford said their states were coping with economic conditions on their own, by providing targeted tax cuts whose costs were offset by spending decreases, by reforming the legal systems in their states, and by improving the states’ workers compensation programs.

“In the rush to do ‘something’ to help,” Perry and Sanford concluded, “federal leaders would be wise to take a line from the Hippocratic Oath, and pledge to do no (more) harm to our country's finances. We can weather this storm if we commit to fiscal prudence and hold true to the values of individual freedom and responsibility that made our nation great.”

- Phil LaCerte

The week in Review