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Pawlenty meets with Obama, says states should 'substantially fix their own problems'

ST. PAUL - The financial industry, retailers, car makers and the average Americans are among those hurt by what now officially is a recession, and want federal help - and many governors joined the chorus Tuesday by asking the incoming president n...

ST. PAUL - The financial industry, retailers, car makers and the average Americans are among those hurt by what now officially is a recession, and want federal help - and many governors joined the chorus Tuesday by asking the incoming president not to forget them.

Not Minnesota Gov. Tim Pawlenty.

"The states should substantially fix their own problems," the Republican governor said after most governors met with president-elect Barack Obama to discuss an economic recovery package.

Pawlenty complained that from what he knows about federal aid proposals, states would be required to maintain current spending levels if federal money comes their way.

"The bottom line is many states have spending patterns that are unsustainable and growing faster than the economy," Pawlenty said.

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Regardless of Pawlenty's position, Obama promised help.

"This administration does not intend to delay in getting you the help you really need," Obama told governors Tuesday, before shutting the doors on the media.

Obama predicted Congress will pass a $500 billion economic recovery project next month, and governors meeting with him said they want a piece of it.

Federal aid takes on new importance this year as most states face the likelihood of large budget deficits.

Minnesota officials are braced for a two-year deficit predicted to be $4 billion to $6 billion. The Minnesota Management and Budget Department on Thursday will announce the size of the deficit lawmakers and Pawlenty must battle in the two-year budget that begins July 1.

The current state budget tops $34 billion, but Pawlenty has ordered his agency heads to give him budget plans for the next two years with less money than they now spend. His full budget proposal is due next month.

"Over the next two years, $140 billion of deficits will be facing state governments and that is a conservative estimate. We believe the number could go as high as $200 billion," said Democratic Pennsylvania Gov. Ed Rendell, who heads the National Governors' Association.

Rendell stressed that states are not looking for a $200 billion bailout from the federal government, but financial help as growing unemployment increases demand for state services. But states are clearly looking for more than the $20 billion that Congress gave states in 2003 to help patch budget gaps after the 2001 downturn. Half of that amount was in federal funds to cover Medicaid costs.

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Governors also want $136 billion for infrastructure projects, such as highway construction, that are ready to begin within months.

Sen. Amy Klobuchar, D-Minn., said that should be part of an Obama economy recovery plan.

She said bipartisan support should come for Obama's state aid plan, especially from states like Minnesota and North Dakota.

Upper Midwestern states that have emerging clean energy-related industries should benefit, she said, because Obama would send billions of dollars into increasing energy production.

Also good for Minnesota is Obama's desire to pass a bill requiring raw materials such as steel and iron ore used in those projects to come from the United States, Klobuchar said.

Wheeler News Service and Stateline.org contributed to this story.

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