State, Local Officials Call for Increase in Federal Medicaid Funding To Be Included in Economic Stimulus Package

State and local officials are calling on Congress to include in a second economic stimulus package additional federal funding for Medicaid and other programs, the Wall Street Journal reports. According to Ray Scheppach, executive director of the National Governors Association, state and local officials are concerned about how to fund Medicaid, which accounts for 23% to 30% of states' budgets -- especially if the U.S. enters into a recession. A recession could result in job losses and push more people into the program (Fields, Wall Street Journal, 9/24).

House Appropriations Committee Chair David Obey (D-Wis.) said Democrats will try to move a second stimulus package this week. CQ Today reports that the package could include federal funding for state Medicaid programs (Clarke, CQ Today, 9/23). However, according to the Journal, a plan to temporarily increase the federal medical assistance percentage for Medicaid by four percentage points "is likely off the table." Michael Bird, federal affairs counsel for the National Conference of State Legislatures, said, "We still believe that it should happen," adding that the Medicaid increase "would be an asterisk compared to the numbers we're talking about now" (Wall Street Journal, 9/24).

Democratic leaders previously estimated that the package would cost about $50 billion, "but it was not clear if that is still being discussed," according to CQ Today. Obey had considered attaching the package to a stopgap spending bill but decided against it so the package can "rise or fall on its own merits."

Continuing Resolution
In related news, Obey on Tuesday proposed a stopgap spending bill that would fund at current levels the budgets of most Cabinet departments and government agencies until March 6, CQ Today reports (Higa/Clarke, CQ Today, 9/23). The new fiscal year begins on Oct. 1, and none of the 12 annual appropriations bills has been signed into law (Clarke, CQ Today, 9/23). Under the continuing resolution nine Cabinet departments and government agencies, including Labor-HHS-Education, will be funded at FY 2008 levels, while three Cabinet departments and government agencies, including Military Construction-Veterans Affairs, will be funded at higher levels.

Obey said he hopes the bill will reach the House floor on Wednesday, CQ Today reports. He added that the proposed CR extends into the next administration to give the economy a sense of stability. The Bush administration had called for a CR that would end in November. Obey said, "I never speak for the Senate, but I wouldn't be here if I didn't think we had an agreement between both" chambers. Referring to the Bush administration, he said, "I think it's fair to say they don't want to endorse it, but I have every reason to believe they will accept" (Higa/Clarke, CQ Today, 9/23). According to CongressDaily, if President Bush signs off on the CR, Congress is not likely to hold a lame duck session (Sanchez/Bourge, CongressDaily, 9/24).