Today in Philadelphia

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Today at Independence Hall in Philadelphia, President-elect Obama and Vice President-Elect Biden will meet with 40 of the nation's governors. The discussion topic will be the unique challenges facing the governors. While they will be making opening statements, the meeting is closed to the press.

The meeting was organized under the auspices of the National Governors' Association, and hosted by Gov. Ed Rendell (D-PA) and Gov. Jim Douglas (R-VT), who are, respectively, the Chair and Vice-Chair of the organization.

While you may think that Philadelphia was chosen because it is the largest city in the home state of the NGA chair, there is another reason. Philadelphia is in bad financial shape. Certainly, it is not the only city in trouble, but the problems are massive. Remember, then candidate Obama had a Four Point plan for the economy, and the fourth point was:

4. RESPONDING TO THE FINANCIAL CRISIS: A Lending Facility to Address the Credit Crisis for States and Localities. Obama is calling on the Federal Reserve and the Treasury to work to establish a facility to lend to state and municipal governments, similar to the steps the Fed recently took to provide liquidity to the commercial paper market.

States cannot run at a deficit, they must balance their budgets. This is incredibly tough in the current economic environment, and their credit markets are as frozen as the private markets, perhaps more so. For example, in California, the state may run out of money by February.

Therefore, it may well be that President-elect Obama will announce plans to guarantee bond funds so that State and Local projects now on hold will be able to re-start soon after he takes office. These projects are for the most part infrastructure, including roads, bridges, school construction, etc.

As an aside, it will be the first time that President-elect Obama will be meeting Spunky. You probably remember that at the Veep debate, her first question was "May I call you Joe?", but I have to believe that she won't be repeating that thought tomorrow.

If you live in the area, be advised that traffic is going to be a disaster and plan accordingly!