Senate Vote On Medicaid Help For States Delayed Because Of Cost Underestimate

Senate Democrats Monday delayed a scheduled vote on a provision to aid states and local governments after the Congressional Budget Office said the bill would increase spending. The CBO analysis further complicates efforts to extend enhanced federal Medicaid funding to states.

The Hill: "Democrats had scheduled a vote to end debate on their proposal to send $10 billion in funding to states and local governments to prevent public teacher layoffs. The package contains another $16.1 billion to help states with Medicaid obligations." Democrats were attempting to pay for the bill by reducing tax credit loopholes for foreign corporations, changing a drug formula in Medicaid and reducing federal food stamp benefits as well as cutting $8 billion in spending, but the CBO said that wasn't enough; they ended up about $5 billion short. "It was unclear Monday whether the fiscal aid measure had the necessary 60 votes to move forward, as Republican leaders have criticized the bill as a tax increase and unnecessary spending" (Alarkon and Bolton, 8/2).

Politico: In terms of the Medicaid assistance and other aid in the measure, "the funds would essentially extend relief provided under the giant economic stimulus bill enacted soon after Obama took office last year. But Democrats have pledged to fully offset the costs through a combination of tax reforms and spending cuts, about $10 billion of which came from the recovery act. … The delay, albeit embarrassing, could yet help Democrats. The timing of Monday's Senate cloture vote caught some supporters by surprise. The Democratic National Committee hastily put together a Web video to promote the cause, and Education Secretary Arne Duncan worked the telephones. But given the stakes, even prominent governors who have a stake in the Medicaid funding were slow to realize the significance of the vote" (Rogers, 8/3).

CongressDaily: "Sen. Susan Collins, R-Maine, said she supports providing states with Medicaid aid but warned that she is concerned about the offsets in the latest version of the bill. 'I am a supporter of extending [the Federal Medical Assistance Percentage] for another six months,' Collins said. 'The first version [of the bill] had cuts in Navy shipbuilding and military construction accounts that were totally unacceptable to me, so I would have to see what the new offsets are' before endorsing it. … Senate Finance ranking member Chuck Grassley said he believes the bill should use unspent stimulus funding to offset the package's cost — a move he said Republicans could vote for" (McCarthy and Sanchez, 8/3).

The Philadelphia Inquirer reports that Pennsylvania Gov. Ed Rendell — who is helping head a group of governors lobbying hard for the extended Medicaid money — is "optimistic" the Medicaid money will be approved. "The money is to cover the state's Medicaid expenditures — health coverage for Pennsylvanians living in poverty, whose ranks have been swelled by the recession. In July, Rendell and the legislature approved a $28 billion budget for the new fiscal year that relied on the federal government's kicking in the $850 million" (Couloumbis and Worden, 8/3).

The (Allentown, Pa.) Morning Call: "Rendell's spokesman, Gary Tuma, declined to talk about what steps could be taken [if the money was not approved], but did acknowledge that the administration's budget office has drawn up several scenarios in response to the loss of any federal assistance. … If the Senate can't get it passed, U.S. Sen. Bob Casey [D-Pa.] said the chamber would try again until it does. 'It's likely we'll have to keep going back to the drawing board and going back to a different way to pass it,' Casey said. … But even if the Senate does get it passed before adjourning for its August recess, the House, which has already left, still needs to take up the bill when it returns in mid-September" (Itkowitz and Micek, 8/2).

CQ: "The measure is being offered as a substitute amendment to an unrelated House-passed Federal Aviation Administration reauthorization bill (HR 1586). The Medicaid and education provisions were struck from other bills despite heavy lobbying by state and local officials" (Ethridge and Smith, 8/2).

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