House Version of Stimulus Package Would Have ‘Noticeable Impact,’ CBO Report Finds

The Congressional Budget Office on Monday released a report that found the House version of the economic stimulus package would have a "noticeable impact on economic growth and employment in the next few years," with much of the mandatory spending for Medicaid and other programs likely to occur in the next 19 to 20 months, CQ Today reports (Krawzak/Clarke, CQ Today, 1/26). According to the report, the stimulus package would cost $815 billion over the next 10 years, with about 65% of spending likely to occur by September 2010.

The report raised concerns about potential delays in some spending as a result of several factors. "Frequently in the past, in all types of federal programs, a noticeable lag has occurred between sharp increases in budget authority and the resulting increase" in spending, and delays in spending can result "because some activities are by their nature seasonal," the report states. The report adds, "Throughout the federal government, spending for new programs has frequently been slower than expected and rarely been faster" because of the time required to implement them (Montgomery, Washington Post, 1/27).

The House plans to vote on the stimulus package on Wednesday. The Senate Appropriations Committee and the Senate Finance Committee plan to mark up the Senate version of the stimulus package on Tuesday (CQ Today, 1/26).

The report is available online (.pdf).

Lobbyists Call for Revisions to Stimulus Package
AARP lobbyists have asked lawmakers for changes to provisions in the House and Senate versions of the economic stimulus package that they maintain could cause some Medicaid beneficiaries to lose access to home- and community-based care, CQ HealthBeat reports. Both versions of the stimulus package require states to maintain current Medicaid eligibility requirements and coverage for mandatory services but not coverage for optional services, such as home- and community-based care. According to AARP Vice President Elaine Ryan, states could end coverage for optional Medicaid services to address their budget deficits.

A congressional aide on Monday said that the provisions do not "change anything" about the current flexibility of states to provide coverage for optional Medicaid services. The aide added, "In a perfect world, we would hope that states would not make cuts," but "under the program, states can cut optional benefits" (Carey, CQ HealthBeat, 1/26).

Meanwhile, U.S. Chamber of Commerce lobbyists, among other requests, have asked the Senate Finance Committee to repeal a requirement in the Senate version of the stimulus package under which health care and other companies that contract with federal, state and local governments in 2011 would begin to have to forfeit 3% of government payments (Cohn, CongressDaily, 1/26).

Stimulus Package To Help States, Recently Unemployed Workers
USA Today on Tuesday published articles that examined how the House version of the economic stimulus package would help states and recently unemployed workers. Summaries appear below.

• States: The House version of the stimulus package includes more than $200 billion that "could spare states from politically painful program cuts, tax increases or both," with two-thirds of the funds "aimed directly at states' biggest spending items," such as health care, USA Today reports. Under the stimulus package, states with high rates of unemployment would receive an additional $45 billion for health care. Michelle Blackston, a spokesperson for the National Conference of State Legislatures, said, "This will supplement, not supplant, state spending" (Cauchon, USA Today, 1/27).
  
  
• Unemployed workers: The stimulus package would allow states to extend Medicaid eligibility to recently unemployed workers and provide federal subsidies for 65% of the health insurance premiums under COBRA, USA Today reports. The House version of the stimulus package would provide the COBRA subsidies for one year, and the Senate version would provide them for nine months. In addition, the House version of the stimulus package would allow recently unemployed workers ages 55 and older or those with at least 10 years of tenure at their jobs to continue to receive health insurance through COBRA until they find a new job that offers coverage or reach age 65, when they can enroll in Medicare (Appleby, USA Today, 1/27).