Governor urges Democrats to be pro-growth, cut taxes

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Democratic leaders must make pro-business, pro-growth tax cuts part of their party's political message, the chairman of the Democratic Governors' Association said yesterday.

New Mexico Gov. Bill Richardson, the only Democratic governor to make business and personal income-tax rate cuts a major part of his agenda in a time of tight budgets, said his party should work to foster a friendlier, pro-tax-cut image that puts more money into the pockets of ordinary taxpayers.

"I think that these issues of being pro-growth, pro-business and pro-sensible tax cuts is something the party should look at and should embrace," Mr. Richardson told The Washington Times.

"I'm not trying to convert the party. I'm just sending a message that we should not preclude the use of economic-growth initiatives," he said during a break at the annual winter meeting of the National Governors Conference.

Mr. Richardson, who has led a postelection movement to make the Democratic governors a more influential policy-making force in the party, has reduced his state's income tax from 8.2 percent to 4.9 percent and cut the capital gains tax in half.

"The message is that Democrats, too, can be associated with economic-growth issues and with sensible tax cuts and that we can be pro-business and fiscally responsible," he said.

Mr. Richardson, who opposed making Howard Dean the new chairman of the Democratic National Committee, said the former Vermont governor still "has an image issue he has to deal with."

"He is a moderate, but his image is one of being very liberal," Mr. Richardson said.

Nevertheless, he added, "He is going to be a very good chairman, and we can work with him."

The tax-cut remarks by Mr. Richardson, a former ambassador to the United Nations and energy secretary during the Clinton administration, came in the midst of two days of debate and behind-the-scenes negotiations between Democratic governors and the Bush administration about controlling Medicaid costs.

At a White House meeting with the governors yesterday, President Bush said he wanted to work with them on crafting reforms that would curb Medicaid costs, while preserving the program's mission to provide medical care to low-income people.

"We want Medicaid to work. We want poor children covered," Mr. Bush said. "But we also recognize that the system needs to be reformed."

The president said that, as a former governor, he understood the officials' concerns about being asked to shoulder higher Medicaid costs.

"We're worried about intergovernmental transfers, and so we put that on the table for discussion," he said.

But the Democratic governors said later that Mr. Bush's proposal to block-grant federal Medicaid funds to the states did not give them the waivers and flexibility they want to make the program more cost effective.

"Give us the flexibility to do the job you are asking us to perform," said Gov. Joe Manchin III of West Virginia.

Meanwhile, the Cato Institute will release its biennial fiscal scorecard today on the governors. A co-author of the report, Stephen Moore, said yesterday that Govs. Arnold Schwarzenegger of California and Bill Owens of Colorado had the highest tax-cutting scores among the Republicans.

Among the Democrats, Mr. Richardson was the high scorer, earning a B.