House To Return After Senate Approves Extension Of Enhanced Medicaid Funds

House Speaker Nancy Pelosi will bring the House back from its recess next week to vote on an extension of enhanced state Medicaid funds the Senate is poised to approve as soon as Thursday afternoon, Politico reports. "The sudden turnaround followed twin 61-38 Senate votes in which Maine Republican Sens. Susan Collins and Olympia Snowe joined in support" of the proposal, which also includes $10 billion to preserve teacher jobs. "House Minority Leader John Boehner (R-Ohio) ridiculed the package as a 'stunning display of tone-deafness.' But with the costs now paid for, Democrats feel bolder in selling the initiative to voters as a boost for jobs - and education."

The measure extends enhanced payments to states' Medicaid programs - by boosting the so-called Federal Medical Assistance Percentage - that were first authorized using stimulus funds last year. The greater FMAP money "boosted the base federal [Medicaid] payment by 6.2 percent and made further adjustments depending on a state's unemployment. This program is due to run out in December, and the new bill would extend the aid for six months but reduce the bonus to 3.2 percent in the first quarter of 2011 and then to 1.2 percent for the second" (Rogers, 8/4).

CongressDaily: "Snowe and Collins were the focus of intense lobbying, given their past support for extending the FMAP funding, but Snowe said the pressure she'd been receiving was nothing out of the ordinary. 'It's not different from any other day of the week; you're going to have conversations on these issues with a number of individuals, and I did,' she said. Snowe said she voted for cloture on the bill because states' needs were significant. But she warned that this was the last time she wanted to extend extra assistance" (Sanchez, 8/5).

The Wall Street Journal: "To win the Maine senators' support, Democrats dropped plans to cut $107 million in funds expected to go largely to Bath Iron Works, a General Dynamics Corp. facility that builds Navy ships in Maine. The Iron Works is one of the biggest private employers in the state with 5,000 workers. Republicans warned that states were becoming too dependent on federal aid. 'For the first time in our history, the federal government is the single largest source of revenue for the states,' Senate Minority Leader Mitch McConnell (R., Ky.) said on the Senate floor. 'When does it end?'" (Bendavid, 8/5).

The Fiscal Times: "The aid to states was fully offset with cuts and tax hikes elsewhere - a key Democratic move to counter the GOP charge that their spending would add to the deficit. This bill was offset in part by rolling back food stamp benefits. Without the additional aid, many states would be facing immediate budget crises this summer and fall. Some 30 states counted on Congress continuing aid to Medicaid in their budgets, money that makes up an average of 4 percent of states' general funds" (Pianin and Graham-Silverman, 8/5).

The Hill: "The House will hold its vote on the package Tuesday. The decision by Pelosi seems to have caught lawmakers by surprise. A House leadership aide said that, while members were aware of the possibility that the Senate could act on the aid package and force their early return, 'no one counts on the Senate.'" During the session, Republicans plan to offer a resolution pledging that the House will not take up major legislation during the lame-duck session after the November elections (Berman, Bolton and Pecquet, 8/4).

The Washington Post: "The aid package would not entirely close [state] budget gaps. Hampered by election-year anxiety over the mounting national debt, congressional Democrats were forced to slash Obama's original request for state aid nearly in half and come up with a plan to pay for it. Meanwhile, lawmakers in both parties signaled that the measure probably marks the end for spending bills aimed at boosting economic activity." Aides say a final Senate vote on the legislation is likely Thursday afternoon (Montgomery and Johnson, 8/5).

The New York Times: "Republican leaders said that the aid had too many strings attached, and that what Democrats called a tax 'loophole' [used to pay for the bill] would amount to a nearly $10 billion tax increase on multinational corporations." In the unusual move of announcing the decision via a Twitter message, Pelosi said, "I will be calling the House back into session early next week to save teachers' jobs and help seniors & children" (Herszenhorn, 8/4).

Los Angeles Times: "Governors from nearly every state had pressed for help in the face of falling revenues and state budgets broken by the recession and lagging economic recovery. Many states had already counted on the extra federal aid in their spending calculations - raising the possibility of new budget crunches if the measure failed" (Mascaro, 8/5).

ABC News: "The House started their six-week summer recess last Friday. The Senate's break does not begin until this Friday. Both houses of Congress are set to return to work on Capitol Hill in mid-September. However, governors such as Pennsylvania's Ed Rendell have warned that their states would be forced to make 'massive layoffs' in the first weeks of September if states do not get the fiscal aid soon" (Jaffe, 8/4).