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MOUNT COMFORT - Gov. Mitch Daniels expressed tepid support Tuesday after meeting with President-elect Barack Obama regarding parts of an economic stimulus package aimed at helping the states weather the recession.
For instance, Daniels endorsed a proposal for the federal government to send $136 billion to states for infrastructure projects such as road construction and bridge repair, something proponents said would put people back to work quickly and strengthen the nation's economy.
But he was leery of the federal government funneling $40 billion to help states cover health care costs for the poor and those with disabilities.
Daniels said, "We are borrowing from our children. They do not have this money in Washington. They have a printing press, is what they have."
The governor met with Obama and Vice President-elect Joe Biden at the meeting of the National Governors Association in Philadelphia on Tuesday morning.
It was his first interaction with Obama, and Daniels came away impressed.
"I'm very impressed that (Obama) took the initiative to invite the governors to the conversation. It was a genuine conversation, and according to all present, nothing quite like it has happened during any previous transitions," he said at a news conference later in the day at Mount Comfort Airport. "He's a very smart guy, very thoughtful."
Daniels said the bulk of the meeting was spent discussing infrastructure, and Indiana was cited at least twice for its progress in this area. The state received $3.8 billion in 2006 as payment for a 75-year lease of the Indiana Toll Road that will fund a 10-year road improvement plan.
Still, the governor said if Obama and federal lawmakers send more money to Indiana, there are plenty of projects in need of funding.
"If they send us a check, we'll cash it," Daniels said.
He did note that he will send a letter suggesting some refinements to any infrastructure aid. This includes not using the current highway formula, which gives Indiana 92 cents back for every dollar it sends in revenue from federal gas taxes.
Daniels instead thinks the money should be apportioned according to economic need, such as areas with high unemployment rates.
And he wants the federal government to relax various rules and regulations in building roads that delay projects so people can be put to work more quickly.
"No state I know is going to go out and build an unsafe bridge or abuse a property owner," Daniels said.
Another topic was a temporary increase in federal Medicaid dollars to help states cover increased costs.
But Daniels said states need to be careful about the Medicaid idea, noting that several other governors discussed having taken the aid in the past. But when the money stopped flowing, the states had trouble trying to replace those dollars.
He said if the federal government covers all the increased costs, there is no incentive to make the hard decisions to reduce spending or become more efficient.
Indiana is one of only a handful of states not running a budget deficit.
But new revenue numbers released Tuesday show the state tax haul is running about $70 million behind projections. State budget officials have instructed agencies to hold back 7 percent of their appropriated spending; a few building projects have been postponed and hiring is being closely scrutinized.
But it's the new biennial budget legislators have to craft starting in January that will be even harder as Indiana takes in less revenue than the year before, leaving no room for inflationary growth.
"We are going to have a very austere budget," Daniels said.
Overall, the governor stayed out of the fray at the meeting, not saying a word during the discussion and choosing not to sign a letter from either the National Governors Association or Republican Governors Association requesting specifics in a stimulus package.
"I tried to limit myself to constructive suggestions around the edges," Daniels said.
nkelly@jg.netThe Associated Press contributed to this story.
