Senate Democrats Introduce Economic Stimulus Package With Additional Federal Medicaid Funds For States

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Public Health
Article Date: 19 Nov 2008 - 12:00 PST

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Senate Democrats on Monday introduced a $100.3 billion economic stimulus package (S 3689) that includes $37.8 billion in additional federal Medicaid funds for states and $1 billion in additional funds for NIH, CQ Today reports. Senate Majority Leader Harry Reid (D-Nev.) said that he hopes to hold a vote on the stimulus package on Wednesday. However, opposition by Republicans likely will delay passage of the stimulus package until January 2009, according to CQ Today (Schatz/Clarke, CQ Today, 11/17).

Groups Seek Funds for Medicaid, Safety-Net Hospitals
The National Conference of State Legislatures on Monday called on Congress and President-elect Barack Obama to pass an economic stimulus package that includes additional federal Medicaid funds for states. In a letter to Obama, NCSL Executive Director William Pound wrote, "With the national financial markets in turmoil, state budgets are adversely affected," and "even before recent economic events, budgets in most states were faltering," adding, "An economic rescue package for states will go a long way in providing immediate need for capital projects and spur much-needed job growth" (Sanchez, CongressDaily, 11/17).

AARP this week also called on Congress to pass a stimulus package that includes additional federal Medicaid funds for states. According to AARP spokesperson Jim Dau, the group plans to have more than 50 state offices lobby lawmakers to pass such a stimulus package and release information specific to states about the role of Medicaid as "a powerful economic stimulator." Dau said, "AARP is starting a national push to make sure that any economic stimulus package includes a temporary increase in Medicaid funding for states, where budgets are getting crushed by the economic downturn," adding, "Record budget deficits are forcing states to make brutal decisions on cutting important programs, so we're trying to help by taking Medicaid off the chopping block."

In addition, board members of the National Association of Public Hospitals and Health Systems this week called on Congress to pass a stimulus package that includes additional funds for safety-net hospitals. In a letter to House Speaker Nancy Pelosi (D-Calif.), the board members wrote, "We urgently ask you to include in any stimulus legislation meaningful countercyclical measures targeted at safety-net hospital systems and the vulnerable patient populations we serve" (Frates, The Politico, 11/18).

Opinion Piece
"Last year at this time, many governors and state legislators were imploring Congress to let them spend more money by expanding" SCHIP, but today "governors and state legislators are singing a different tune" as a result of increased budget deficits and decreased revenue and are "imploring Washington to bail them out" with an economic stimulus package, Steve Malanga, senior editor at the Manhattan Institute's City Journal, writes in a Wall Street Journal opinion piece.

Malanga writes, "This is not the first time states have been caught in this trap," as "many fail to address their deep, structural budget problems during the good times, preferring to use booming tax revenues to start or expand politically popular (and often costly) programs." In addition, states have failed to "deal with huge and growing employee pension and benefits liabilities," Malanga writes.

He concludes, "Unfortunately, more federal aid all but guarantees" that states "won't use the current crisis as an opportunity to put their fiscal houses in order -- setting the stage for worse problems to come" (Malanga, Wall Street Journal, 11/18).

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