The recession has had a huge impact on state budgets, and one area public officials are struggling with is in meeting costs in the Medicaid program for the poor. The program is underwritten jointly by states and the federal government.
Speaking to state chief executives at the close of the three-day winter session of the National Governors Association, Obama also addressed concerns about the stimulus plan raised by a handful of Republican governors who have called the plan overly large and wasteful .
At issue is a proposed expansion of state unemployment benefits for part-time workers and others who where previously ineligible to receive the funding. Some GOP governors - several with an eye on the 2012 presidential contest including Mark Sanford of South Carolina and Bobby Jindal of Louisiana - say they may not accept that funding because it will require a tax increase on employers once the stimulus money runs out.
Obama addressed that critique directly, and warned against allowing political considerations to cloud a discussion of the stimulus program.
"I think there are some very legitimate concerns on the part of some about the sustainability of expanding unemployment insurance. What hasn't been noted is that that is $7 billion of a $787 billion program. And it's not even the majority of the expansion of unemployment insurance," Obama said.
He added, "If we agree on 90 percent of this stuff, and we're spending all our time on television arguing about 1, 2, 3 percent of the spending in this thing, and somehow it's being characterized in broad brush as wasteful spending, that starts sounding more like politics. And that's what right now we don't have time to do."
Speaking to reporters after the meeting, Jindal said he appreciated Obama's willingness to engage in "honest disagreements of philosophy and opinions." But the Louisiana governor said his misgivings about the stimulus plan had not changed.
"There certainly could have been a very different stimulus bill written ... focused on infrastructure, focused on the kinds of tax credits that could have gotten investments moving in the private sector," Jindal said.
Obama also stressed the need for accountability and transparency in how the governors spend the stimulus funds.
He named Earl Devaney, a former Secret Service agent who helped expose lobbyists' corruption at the Interior Department, to head the new Recovery Act Transparency and Accountability Board. Vice President Joe Biden also will be given a role coordinating oversight of stimulus spending, Obama said.
Obama created the board as an at-large body to oversee how the government spends the $787 billion stimulus package.
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