House Approves State Aid Package, Including $16 Billion In Federal Medicaid Assistance

By a vote of 247 to 161, the House approved a $26 billion funding bill for states, which includes $16 billion to continue enhanced federal Medicaid funds due to expire at the end of the year as well as $10 billion in education funding. The measure will now be sent to the President for his signature.

Politico: "[T]he House gave final approval Tuesday to a $26.1 billion fiscal aid package intended to help cash-strapped state and local governments avert a new round of layoffs this fall. ... More than past stimulus efforts, the bill pays for itself through a combination of tax reforms and often painful spending cuts, and after months of struggle, Democrats hope to have stumbled into a new 'common sense' message that will help them with voters in November." Republicans who spoke against used
"references to 'bailouts' or a big-spending 'government utopia.'"

The $16 billion in Medicaid funds are "to help states cover their Medicaid payments for the first six months of 2011" (Rogers, 8/10).

Bloomberg Businessweek: "The House, taking a one-day break from the campaign trail, returned to Washington today to approve the measure 247-161 and send it to President Barack Obama to be signed into law. ... The measure became the latest flashpoint in a debate over jobs, the economy and the deficit" (Faler, 8/10).

The Washington Post: "House Speaker Nancy Pelosi (D-Calif.), determined to show angry voters a commitment to improving the economy, summoned lawmakers back from their August break for an unusual one-day session to vote on the package, saying it would help governors facing their own budget problems avoid laying off more than 300,000 workers." Most Republicans voted against the bill. But, because the Senate has already "signed off on the package," President Obama "plans to sign the bill into law as soon as Tuesday." The legislation provides "governors with an additional six months of federal assistance: $10 billion in education aid and about $16 billion to fill gaps opened in state Medicaid budgets by increasing demand on the health program for the poor" (Montgomery and Anderson, 8/10).  

The New York Times: "Following the vote ... President Obama was to sign the measure at the White House, underscoring the importance Democrats place on the bill that they view as sign of their commitment to protecting American jobs" (Hulse, 8/10). 

Reuters: "While Republicans say the measure will add to the country's budget deficit, Democrats contend it will shave at least $1 billion off the deficit and it is fully paid for by closing international tax loopholes, cutting money for food stamps, and rescinding part of the earned income tax credit" (Lambert, 8/10).

In a story filed before the vote, The Associated Press reported that the money would "free up [other] money for states to meet other budget priorities, including keeping more than 150,000 police officers and other public workers on the payroll. Some three-fifths of states have already factored in the federal money in drawing up their budgets for the current fiscal year. The National Governors Association, in a letter to congressional leaders, said the states' estimated budget shortfall for the 2010-12 period is $116 billion, and the extended Medicaid payments are 'the best way to help states bridge the gap between their worst fiscal year and the beginning of recovery'" (Abrams, 8/10).