PHILADELPHIA – The nation's governors on Tuesday took their case to President-elect Barack Obama for a $136 billion infrastructure spending program they hope will funnel immediate government money toward bridges, roads and rail lines with the goal of creating jobs and spurring the economy out of recession.

It's not a handout or a bailout, insisted the host of the economic forum, Democratic Gov. Ed Rendell of Pennsylvania, president of the National Governors Association. Rather, it's the "best remedy for getting America back to work," Rendell said.

"We think that we can create literally millions of new jobs and at the same time lots of orders for concrete and steel companies and asphalt companies and lumber companies and the like," Rendell said.

At least 41 states are expected to face budget shortfalls this year, in part because the slowing economy has decreased tax revenue states depend on for their annual spending plans. Those shrinking state coffers come even as hard times and layoffs force more people to apply for unemployment and other state benefits, including Medicaid. And declining property tax revenue in states with high foreclosure rates has hurt local governments, which depend on that money to provide local services.

Obama on Tuesday pledged to move as quickly as possible on a stimulus package that could hasten an economic turnaround, beginning at the state level.

"I recognize that every single one of you is struggling to come up with a budget at a time when you're facing great and growing needs," said Obama, who asked the governors for the meeting. "More and more people are turning to you for help for health care, for affordable housing, to prevent foreclosures even as the credit markets are tightening and tax revenues are making it more difficult to provide that help."

The president-elect has set a goal of saving or creating 2.5 million jobs to boost the economy, which experts say has been in recession for the past year. His aides and congressional leaders have been discussing the outlines of a measure that could exceed $500 billion over two years. Congress wants to have it ready for his signature shortly after his Jan. 20 inauguration.

Incoming White House chief of staff Rahm Emanuel, told reporters that in a private portion of the meeting, Obama and Republican and Democratic governors agreed that the measure must focus heavily on money for infrastructure as well as bureaucratic reforms to make it easier to complete programs without having to cut through piles of red tape.

"The top priority is to invest in these areas," Emanuel said, listing roads, bridges, high-speed rail, water-treatment systems, schools, medical information technology, broadband networks, transportation systems and green technology.

The country's economic woes require a bipartisan approach, Obama said, and he told the Republican governors at the meeting that he was offering "the same hand of friendship and cooperation that I offer our Democratic governors. We have a strong and vibrant democracy. We compete vigorously during an election. But with the end of that season comes the time to govern together – and that time is now."

Most governors were on board with the infrastructure spending proposal, including high-profile Republicans such as Arnold Schwarzenegger of California.

The economic summit at historic Congress Hall in Philadelphia came just a day after Schwarzenegger declared a fiscal crisis in California and called for what he described as "hundreds of billions" in spending on ready-to-go infrastructure projects, including $28 billion alone in California over the next several years.

Schwarzenegger said he came away impressed with Obama's "intellectual curiosity" and willingness to listen to ideas that have worked in the states – where governors are prohibited from running up deficits, unlike in federal spending.

Governors stand ready to speed up the process of economic recovery, Schwarzenegger said, and "not just talk about infrastructure but actually put shovels into the dirt and pour cement and lay steel and get to work and really stimulate the economy."

The Associated Press contributed to this report.