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Obama Presidency May Quickly Impact State and Local Governments

November 11, 2008 By Steve Towns, Editor

Barack Obama's presidency will have a large and nearly immediate impact on state and local governments, according to David Sanger, chief Washington correspondent for The New York Times.

Sanger -- who covered both the Bill Clinton and George W. Bush administrations for the newspaper -- spoke Monday, Nov. 10, at re:public, the Center for Digital Government's annual leadership retreat in Tucson, Ariz. He said he expects Obama to move quickly on issues vital to state and local officials once the president-elect takes office in January. Among the early targets: shoring up ailing U.S. automakers, providing federal backing for state and local bond issues, and launching public works infrastructure projects.

"In President Obama's first 100 days, he'll need to worry about the domestic economy, national financial markets and world financial markets," Sanger said. "He'll move quickly because within six months, the recession won't be the 'Bush Recession' anymore. It'll be the 'Obama Recession.'"

With that in mind, Sanger predicted the Obama administration's first significant economic move will be to pump money into ailing automakers GM and Ford, in an effort to preserve jobs for 2.5 million to 3 million workers employed by the domestic auto industry.

"Next will be help for state and local governments themselves," said Sanger. With the credit crisis making it difficult for governments to borrow money, the federal government may provide backing for state and local bond issues, he said, much as it did for beleaguered mortgage corporations Freddie Mac and Fannie Mae.

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