Democrat governors push US health, energy subsidies

WASHINGTON (Reuters) – Democratic state governors on
Tuesday urged President George W. Bush to adopt their proposal
for $51 billion in annual federal subsidies for health care,
alternative energy and education, saying it would improve
America’s global economic competitiveness.

Joining a chorus of Democrats highlighting alternative
agendas ahead of Bush’s State of the Union speech next week,
Pennsylvania Gov. Ed Rendell said the United States is falling
behind other nations in trade and education while it increases
its dependence on foreign oil.

“Unless we do something, we will become less competitive
with the rest of the world. We will no longer be the economic
leader,” Rendell told reporters in Washington.

The Democratic Governors Association is proposing that
companies who provide employees with health insurance receive a
17 percent federal tax credit for these costs to encourage more
firms to contribute toward coverage.

States have been hit in recent years with rising costs for
Medicaid, the state-federal health care program for the poor,
which has a growing roster of lower-paid workers with no
company health plans.

The governors argue that the credit would help reduce costs
for U.S. companies that must compete against foreign
manufacturers in countries with full government-paid health
care systems.

In addition, the Democratic governors proposed that the
existing State Children’s Health Insurance Program for
low-income families be expanded to include all children.

On the energy front, the Democratic governors’ plan would
divert $2.6 billion in U.S. subsidies to oil companies to
develop alternative energy sources such as coal gasification,
wind and solar power. Rendell called for a “Manhattan Project”
effort to develop such technologies, a reference to the massive
U.S. effort to produce an atomic bomb during World War II.

It also would require that 25 percent of the federal
government’s 600,000 vehicles be equipped with hybrid
technology — which it estimates would cut oil imports by 1
million barrels a year and help make fuel-efficient hybrid
gasoline-electric cars more affordable.

The Democratic governors argued that more federal
investment was needed in early childhood education to keep up
with efforts being made in China, Japan, the United Kingdom,
France, Germany and Italy.

At the high school level, $12.2 billion in additional
tutoring funds is needed to help students improve their math
and problem solving skills, where American 15-year-olds rank
24th among counterparts in 29 major industrialized nations.

The Democratic Governors Association also urged Bush to put
more pressure on the Chinese government to allow the yuan to
appreciate against the dollar and other currencies.

Rendell said the wish list was not proposed “in a partisan
vein” and would be submitted to the National Governors
Association.