- Associated Press - Tuesday, April 8, 2014

RICHMOND, Va. (AP) - The Virginia Senate approved its version of a roughly $96 billion two-year budget Tuesday as Republicans and Democrats pointed fingers over who is responsible for a potential state government shutdown.

Two weeks after the start of a special session devoted to passing a state budget, the Democratically controlled Senate approved a spending plan that includes accepting federal Medicaid funds to provide new health insurance to as many as 400,000 low-income residents.

But the measure was quickly rejected by leaders of the GOP-controlled House of Delegates, which stanchly opposes expanding Medicaid.

The General Assembly adjourned from its regular session last month without passing a budget because of the fight over Medicaid expansion. If a spending plan isn’t in place by July 1, state government could shut down.

There was no sign Tuesday that the two sides have gotten any closer to a potential compromise and both sides claimed public opinion was strongly in their favor. Both chambers left Richmond Tuesday with no set plans to return and resume work on a budget.

Expanding the Medicaid eligible population to include more low-income adults is a key part of President Barack Obama’s health care overhaul, a provision the U.S. Supreme Court ruled states could opt out of. Democratic Gov. Terry McAuliffe has made Medicaid expansion his top legislative priority, saying the state’s hospitals and working poor desperately need those federal funds.

Republicans have argued that the federal government’s promise to cover the future costs of expanding Medicaid eligibility can’t be trusted and Virginia can’t afford the long-term costs of expansion.

The Senate voted Tuesday to approve most of the budget amendments suggested by McAuliffe last month, including a 2 percent pay raise for most state employees, teachers and faculty. But the upper chamber replaced a proposed expansion of the current Medicaid program with “Marketplace Virginia.” Supporters of the plan said Marketplace Virginia was a bipartisan compromise which would use federal funds to provide private insurance to low-income residents.

The majority of Virginia’s current Medicaid population is currently enrolled in private plans and those newly enrolled would be as well. Both Medicaid expansion and Marketplace Virginia would use federal funds to purchase private health insurance for more low-income residents.

But supporters of the Senate plan insist Marketplace Virginia is not an expansion of Medicaid, and say a Marketplace Virginia provision requiring new enrollees to put up to 5 percent of their household income toward the cost of the new insurance is a key difference.

Republicans want the General Assembly to pass a budget without expansion and then revisit the issue later.

House Speaker William J. Howell said a prolonged budget delay hurts local governments trying to plan their own budgets. Howell accused Democrats of being oblivious to those concerns.

“It’s clear that we want to get this thing done. And it’s clear that the Democrats in the Senate and the governor are the ones that are stalling,” Howell said.

Senate Democratic Leader Richard L. Saslaw said Republicans are the ones at fault.

“These are the people who campaign against government. … and they’ve got the chutzpah to accuse us of wanting to shut down government,” Saslaw said. “I find that just a little bit ironic.”