Senators Agree To Attach $10B in Additional Medicaid Funds for States to Tax Cut Bill

A bipartisan group of senators on May 14 reached an agreement to allocate $10 billion to states for their Medicaid programs as part of a 10-year, $350 billion tax cut bill, the New York Times reports (Firestone, New York Times, 5/15). The tax cut legislation approved by the Senate Finance Committee on May 13 includes $20 billion in funds for states and cities (Kaiser Daily Health Policy Report, 5/14). Under the agreement, states would also receive $6 billion in unrestricted funds; cities would receive $4 billion in unrestricted funds. Sen. Ben Nelson (D-Neb.) said, "We've got states removing kids from the health care rolls, and seniors worried that they'll lose their nursing homes. This assistance will go a long way to resolving those problems" (New York Times, 5/15). The Senate will likely pass the tax cut bill today, but the legislation faces "difficult negotiations" with House members, the Washington Post reports (Weisman, Washington Post, 5/15). The House version of the tax cut bill, passed earlier this month, does not include funds for states (Kaiser Daily Health Policy Report, 5/9). The provision of additional funds for states has "provoked little interest" from House Republicans, the Times reports. House Ways and Means Committee Chair Rep. Bill Thomas (R-Calif.) said last week that states are responsible for their financial problems because of "profligate spending during flush times" and should not expect help from the federal government, the Times reports. The Bush administration has not taken a position on the issue (New York Times, 5/15).