Gov. Nikki Haley on Monday rejected President Barack Obama's offer to the nation's governors to accelerate by three years their states' bids to opt out of key provisions of his signature health insurance law.
At a White House meeting with 48 state chiefs, Obama in turn dismissed Haley's request to direct the Justice Department to seek expedited U.S. Supreme Court review of the 29 Republican governors' lawsuits against the law extending medical benefits to 31 million Americans.
"I told him that the states currently are in limbo," Haley said after the meeting.
"His response was he would not expedite the process, and he would not stall it."
Two Democratic federal judges have backed the law, which Congress passed and Obama signed last March. Two Republican federal judges have deemed unconstitutional its requirement that all Americans buy health insurance or face IRS fines.
On a separate issue, Obama surprised Haley by saying - as he pitched funding for roads, bridges and other infrastructure needs - that the Charleston port is important.
Obama, though, didn't explain why he had failed in his recent budget plan to seek $400,000 for a study on deepening the Charleston port to accommodate larger cargo ships expected to arrive after the Panama Canal's widening is completed in 2014.
Looking for some goodwill from the governors, Obama said he's willing to bend a bit to help them deal with their budgetary problems stemming from health care and other costs - and the political heat rising from last year's law to expand health care.
Obama said he supports a Senate bill to let states design their own health care systems starting in 2014 with waivers from provisions of the 2010 Affordable Care Act - as long as those state systems meet his law's main goals. The existing law wouldn't allow state waivers until 2017.
"It will give you flexibility more quickly, while still guaranteeing the American people reform," Obama said.
"If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does - without increasing the deficit - you can implement that plan. And we'll work with you to do it."
Haley said after the session that Obama's offer was insufficient.
"It's not good enough," Haley said.
"He is still not letting states decide what is best for them. The bottom line is that under his plan, people will drop off private insurance plans from employers and add on to public rolls. That's not reducing heath care costs; that's increasing costs. That's not increasing the quality of health care; that's decreasing it."
Obama vowed as well to work with a bipartisan panel of governors to find ways to cut Medicaid costs without hurting services.
"If you can come up with more ways to reduce Medicaid costs while still providing quality care to those who need it, I will support those proposals as well," he said.
Obama's concessions followed weekend appeals from governors of both parties for federal help in reducing the budget-crushing costs of Medicaid, whose expenses are split between federal and state governments.
South Carolina faces an estimated $700 million state government deficit for the budget year that starts July 1, and many other states are confronting larger fiscal shortfalls.
The state executives came to Washington for the winter conference of the bipartisan National Governors Association, their chief policy, research and lobbying group.
Haley didn't attend the NGA weekend sessions because she decided South Carolina couldn't afford its annual dues of $106,000.
Haley instead participated in sessions of the Republican Governors Association, a partisan group financed by GOP campaign contributions and private donors.
After saying that she wouldn't attend the meeting of Obama and the governors Monday, Haley scrambled in order to join the White House session.
Haley said afterward that she originally had thought the meeting was an NGA event because the group had publicized it, but she realized she could attend after learning that Obama was hosting the session.
Haley and her husband, Michael, joined her counterparts from across the country Sunday evening for a black-tie ball at the White House. Both said Monday they had enjoyed the gala.
Governors gathered in Washington as lawmakers worked to avoid a federal government shutdown March 18, the day when a temporary funding bill expires.
Obama and fellow Democrats have offered spending cuts, but Republicans want deeper reductions.
Haley declined to say whether she backs GOP congressional leaders who have pledged to let the government close if their demands aren't met.
"I hope the president will work with Congress to get this done, but I will take care of my state no matter what happens," Haley said.