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FROM THE TOP -- Vice President Biden begins his speech to governors with his usual joking, saying that some governors are probably "tired" of hearing him on the phone talking about the stimulus.

Speaking of the stimulus, Biden says, "I know none of you like the Recovery Act much, but I just want to start off by thanking the governors who've been here for the last two years." He says the thousands of stimulus projects had such little fraud because of their work.

"That's because of you," he says. "And it's because of the mayors."

Biden notes that "although there’s no Recovery Act" anymore, the White House will still maintain a relationship with states to work on the economy.

"The recovery is under way, although I'm sure a lot of you, having to cut your budgets, don’t feel it," he says. "It’s a very difficult time for you all. And I just want you to know that I think we can probably all agree ... we all have to do something about the long-term debt." (11:21 a.m.)

After being introduced by Vice President Biden, President Obama thanks some of the governors for their leadership with the national group.

"I hope everybody had fun last night," he says. "Joe's main function is to provide a buffer between me and them," he adds, referring to his wife and Biden's wife.

He then makes a pretty decent joke, to which some of the governors laugh heartily: "I hope, today, all of you feel free to make yourselves at home. For those of you with a particular interest in the next election, I don't mean that literally." (11:23 a.m.)

Getting serious, Obama says the question that must be asked is, "Where will the new jobs come from?" He praises his tax-cut deal with Republicans that he struck last year, saying it is already making Americans' paychecks "bigger." And he says the budget debate in Washington is "critical."

"This kind of spending -- domestic, discretionary spending, which has been the focus of complaints about out-of-control federal spending, makes up only about 12 percent of the entire budget," he says, adding that cuts need to be made in defense and other areas.

He adds a kicker: "It is undeniable that the Recovery Act helped every single state represented in this room manage their budgets, whether you admit it or not." (11:29 a.m.)


Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
eschwerin@rosemontseneca.com
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