The executive committee of the National Governors Association decided today to start from scratch and write its plan for shifting federal programs to the states, rather than spend more time negotiating their "substantial" differences with the Reagan White House.
With the president conceding, in phone calls to key governors on Friday, that his plan will not be ready for submission to Congress until next year, the governors decided to frame their proposals independently of the administration.
The decision, reflecting the governors' impatience with five months of inconclusive negotiations since Reagan introduced the federalism initiative, was approved unanimously by the executive committee and is expected to be reaffirmed by the other governors later in the three-day session.
At the opening of their annual conference, held at a steamy lakeside resort called Shangri-La, the governors were jolted by a speech from the House Budget Committee chairman warning that the weak economy could be shattered by "a time bomb of expanding budget deficits."
Ridiculing Reagan's call for a balanced-budget constitutional amendment, Rep. James R. Jones (D-Okla.) said the nation is threatened by $1.5 trillion of deficits in the next six years.
The move by the governors to draft their federalism plan was pushed by outgoing NGA chairman Vermont Gov. Richard A. Snelling (R) and his successor, Utah Gov. Scott Matheson (D), both members of the negotiating committee that met frequently with administration officials the last five months.
Another member of that committee, Arizona Gov. Bruce Babbitt (D), pointedly said that the impasse was caused by the fact that the White House could not resolve its position.
"They were headed six different ways at once," he said, adding that Office of Management and Budget Director David A. Stockman had "tunnel vision" in trying to use the federalism initiative to shift "disproportionate" costs to the states.
He also complained that policy adviser Robert Carleson was "philosophically" opposed to any increase in federal responsibilities.
Echoing the complaint, Snelling said he concluded that "the president believes far more than some of the others in the White House" in his federalism initiative.
Reagan said in the calls he made Friday that he hopes to meet with the governors later this month, and Matheson said that if he does "we'll make much more progress" on the plan.
But Snelling emphasized that the differences were "substantial," centering on the White House refusal to accept the governors' long-held view that assuring "decent" minimum standards of health and income was a federal responsibility.
Richard S. Williamson, Reagan's assistant for intergovernmental relations, who was in the unlucky position of being the top administration official on the scene, sought to minimize the importance of the governors' revolt. He said the drafting of their plan "is not counterproductive," even though it may reduce chances of a single proposal going to Congress.
"But the bottom line," Williamson said, "is that no federalism initiative will pass Congress unless Ronald Reagan supports it. In the end, that fact will have to bring us together."
Several Republicans on the executive committee also said it might be futile for the governors to draft their plan, but they went along with Snelling and Matheson when assured that the association would continue to meet with Reagan and the White House in coming months.
The timetable suggested in the resolution would have the governors approving their plan by February for submission to Congress.
While the federalism debate held center stage, current political issues from the nuclear freeze to the budget deficits also intruded on the holiday atmosphere at this posh resort.
Maine Gov. Joseph E. Brennan (D) circulated a resolution among Democratic governors pledging them to support "such a freeze as a first step to meaningful, mutual reductions of nuclear weapons."
And Jones criticized both the president and senators for their support of the balanced-budget amendment.
Saying the amendment "both cheapens and endangers our form of government," Jones said it was no more than an "economic cover-up" for deficits that could total more than $1.5 trillion in the next six years.
Jones said these deficits are the result of Reagan's insistence on "massive defense spending and vast revenue reductions."
"Rather than face reality," he said, "the president calls for and the Senate passes an amendment which, if it is effective, could throw economic policy into the federal courts and plunge the nation into recession.
"The Senate has approved it. The House may well do the same, even though the overwhelming majority of members fully recognize the hypocrisy and folly of the proposal. The members know, and I believe the public knows, that the amendment is as bogus as a $3 bill. But if the president leads a full-scale charge, it may pass," Jones said. Jones' characterization of the balanced-budget amendment as a "cover-up" and "the economic Watergate of the 1980s" triggered a sharp partisan exchange.
Wisconsin Gov. Lee S. Dreyfus (R) told Jones that he was one of those responsible for the dangerous deficits, because Jones was chief of staff in Lyndon B. Johnson's White House when many of the expensive Great Society programs were begun.
Jones replied that Johnson was the last president to achieve a balanced budget, but Dreyfus shot back that he did that only by "refusing to pay for the Vietnam war."
The amendment is not on the governors' formal agenda, but Snelling said they would discuss it informally at a closed-door session Monday. He said the amendment is "nonsense," but host Gov. George Nigh (D) of Oklahoma, who shared the opening press conference, said he thought it should be "mandatory" for the federal government, as it is in most states. Jones warned that if the amendment went into effect, it would "transform the role of the federal government," slashing domestic programs. He said that is "the intention of the sponsors."
As an example, Jones said, a balanced budget in 1985 would require spending cuts of "at least $215 billion." Assuming that defense and major entitlement programs were protected, he said, there would have to be "an 82 percent reduction in everything else."
"If no programs were protected," he said, "an across-the-board cut of 23 percent would be needed. This would require, for starters, cuts of about $70 billion in defense, $60 billion in Social Security and Medicare, and $6 billion each in unemployment compensation and veterans programs. Is that what the American people really want?"
In the impromptu debate on the balanced budget, Williamson argued that the president knows "it is not a panacea, but it is a discipline that will help Congress make the tough choices."
The governors are meeting in a resort compound in northeast Oklahoma. Security is especially tight, with state police at all entrances and in the meeting rooms. A Saturday night rainstorm, which washed out part of a scheduled luau for early arrivals, turned the resort into a steam bath by early today.