WASHINGTON – Rhode Island and 30 other U.S. states face new gaps in budgets for the fiscal year that starts July 1, after the U.S. Senate failed to move forward a $16 billion boost in Medicaid assistance.
Senate Republicans wouldn’t support the measure on Thursday, after it had been cut from $24 billion, citing concern over adding to the federal deficit, which is forecast to reach $1.6 trillion this fiscal year.
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Thirty-one U.S. states included a total of $11.6 billion worth of additional Medicaid payments in their spending plans for the 2011 budget year, data compiled by Bloomberg shows. Rhode Island’s budget for fiscal 2011 included an expected $108 million that failed to get approved.
Senate sponsors of legislation that included the Medicaid assistance, H.R. 4213, reduced the level of assistance after failing two times last week to attract the 60 votes needed to end debate and move the bill to a final vote. The Senate fell three short Thursday, at 57-41. Pa. Gov. Edward Rendell said in a statement he’s trying to get another vote.
Coast to Coast
In Rhode Island, lawmakers included a provision in next year’s budget allowing the governor to institute across-the-board cuts to make up the difference if the Medicaid money was not approved. The General Assembly could make changes to the proposed cuts.
Gov. Donald L. Carcieri said June 11 he would allow the budget to become law without his signature, warning that “having this gaping hole in the budget [because of the Medicaid payments] is ill-advised.”
California, the most populous U.S. state, counted on $1.7 billion from the Medicaid extension, more than any other state, according to an outline of the budget Gov. Arnold Schwarzenegger proposed last month. The $123 billion budget projects a $19.1 billion deficit even with the additional Medicaid money. New York Gov. David Paterson included $1.1 billion of the funds in his proposed budget for the year that started April 1, according to budget documents.
In Pennsylvania, the U.S.’s sixth most-populous state, Rendell said the loss of the $850 million in extra Medicaid funds included in his proposed $28 billion budget would force the dismissal of up to 20,000 state workers.
Set to End
Rendell tried to rally other governors Thursday to put pressure on the Senate to take the matter up again, according to a statement from Gary Tuma, a spokesman. “It is critical to the economy of Pennsylvania and many other states, and therefore to the entire national economic recovery,” Rendell said.
The larger Medicaid payments were included in last year’s $787 billion economic-stimulus plan, and are scheduled to expire Dec. 31. The Senate bill would have extended the extra aid at a reduced rate by an additional six months.
Some states have already begun reworking their budgets in anticipation that Congress would decline the extra Medicaid assistance.
“Balancing a budget merely on the hope of Congressional action is unwise in the best of times and simply unacceptable in today’s economic climate,” S.C. Gov. Mark Sanford, a Republican in his last year in office, said in a June 9 veto message to lawmakers in which he struck the entire $213 million in extra Medicaid funding they had banked on.
Using Reserves
In Massachusetts, lawmakers late Thursday approved a $28 billion budget that includes provisions to draw on reserves and cut spending to $27.6 billion in the event the $687 million in extra Medicaid assistance they counted on is not delivered, said Kara Keefe, a spokeswoman for Senate Ways and Means Committee Chairman Steven Panagiotakos, D-Lowell.
Without the extra federal assistance, the U.S. economy may slip back into recession as state and local governments dismiss more than 200,000 workers, Mark Zandi, chief economist at Moody’s Analytics in West Chester, Pa., said in a June 9 conference call with reporters and four Democratic governors.
“There’s actually going to be shock waves sent throughout the states,” N.C. Gov. Beverly Perdue, a Democrat, said in a second conference call on June 15. Perdue’s proposed $19 billion budget for the fiscal year that starts July 1 includes $499 million from the additional Medicaid payments, according to state legislative documents.
PBN Web Editor Ted Nesi contributed to this report.
