- The Washington Times - Thursday, August 5, 2010

State lawmakers from across the country breathed a collective sigh of relief on Thursday after the Democrat-controlled Senate voted to send them billions of emergency Medicaid dollars from last year’s stimulus bill - ending what had been a months-long, filibuster-fueled challenge to the deficit-spending.

More than two dozen cash-strapped states were already banking on the additional money to balance their respective budgets and to avoid unpopular cuts to state services, including K-12 public education and programs for the elderly.

“At a time when lot of people thought these funds were dead on arrival … these are critical funds to staving off further dramatic cuts in state budgets,” said H.D. Palmer, spokesman for the California Department of Finance.

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The Senate passed the bill on a 61-39 vote, gaining the support of Maine Sens. Olympia J. Snowe and Susan Collins, both Republicans. Mrs. Snowe and Miss Collins also allowed the bill to clear a big hurdle on Wednesday, when they broke with their party to defeat a GOP-led filibuster and advance the plan to the Senate floor.

Now, House Speaker Nancy Pelosi, California Democrat, says members of the House will return to Washington for a special session to vote on the plan Tuesday and send the bill to President Obama for his signature.

Democrats on Thursday billed the vote as a victory after months of trying to pour more money into states in an attempt to avoid public-employee layoffs and cuts to safety-net programs.

“The legislation we fought for is about our teachers, the families they need to feed and the children they inspire every day. And it’s about our civil servants, the paychecks they need to make ends meet and the communities they keep moving,” said Senate Majority Leader Harry Reid, Nevada Democrat. “The other side has come to work every day trying to kill jobs and make sure our economic recovery doesn’t interfere with their campaign message. But these public servants have always been there for us. The least we can do is be there for them.”

Republicans countered by casting it as a handout to public-employee unions and another example of Democrats dumping more debt on future generations and putting off tough choices at the state level.

“The American people don’t want more Washington ‘stimulus’ spending, especially a payoff to union bosses and liberal special interests attached to a job-killing tax hike on job-creators here in the United States,” said Michael Steel, spokesman for House Minority Leader John A. Boehner, Ohio Republican. “This is a stunningly tone-deaf move by Democrats, who can’t kick their addiction to more government spending.”

As it stands, the pot of money set aside for Federal Medicaid Assistance Program (FMAP) payments is set to run out Dec. 31, 2010. The Senate plan provides an additional taxpayer-funded lifeline to help cover Medicaid expenses through June 30, 2011 - the end of the fiscal year in most states.

The Senate bill includes $16.1 billion in increased funding for Medicaid, the federal-state health care program for people with lower incomes. The bill also includes an additional $10 billion that Democrats said will help retain teachers, firefighters and police. The spending was paid for by redirecting some taxes and cutting existing spending, including more than $2 billion from last year’s $862 billion stimulus bill.

In the wake of the recession, states have been financially squeezed and have scrambled for solutions to slower-than-usual revenue streams, high unemployment rates and an increase in Medicaid enrollees. In response, state lawmakers have reduced services, drained money from reserve funds and, in many cases, delayed contributions to their state retirement systems. They also have looked to Congress for a financial boost.

While the $16.1 billion FMAP extension that passed the Senate on Thursday is a scaled-back version of the $23 billion plan floated earlier this year by Senate Democrats, state officials said that the new money will keep state programs afloat and jobs off the chopping block.

Gary Tuma, spokesman for Pennsylvania Gov. Edward G. Rendell, said the Keystone State is projected to receive $600 million in FMAP funds and $387 million in education funds. Without the new money, Mr. Tuma said, the Democratic governor and legislative leaders would have been forced to find money for Medicaid mandates by cutting money from schools districts, counties and state agencies, which would have resulted in thousands of layoffs.

“We have cut $3 billion out of the state budget the last two years during the recession,” he said. “So we’ve already laid off employees and eliminated programs. As the governor has said, ‘We would have been cutting into the bone at this point.’ “

The additional FMAP money was especially good news for states battling well-documented budget woes. New York received $1.5 billion; California, $1.25 billion; and Illinois, $550 million.

“These funds will allow Illinois to continue to provide health care services and other human service programs that so many people have come to rely on,” said Kelly Kraft, a spokeswoman for Illinois Gov. Pat Quinn, a Democrat. “The bill also includes about $415 million in education funding, which will save an estimated 5,000 teachers jobs.”

Arguably the biggest winners were states such as Virginia, where state lawmakers inked a budget deal that did not count on additional funds coming down the pipeline. Virginia is projected to receive $289 million in FMAP funds and $250 million for schools.

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