Economists' Support Could Bode Well For Stimulus Plan With Medicaid Funds

Main Category: Medicare / Medicaid / SCHIP
Article Date: 03 Nov 2008 - 7:00 PDT

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Two of three economists on Thursday at a Joint Economic Committee hearing said that potential plans for a second $150 billion economic stimulus package that includes a temporary increase in federal Medicaid matching funds for states is not adequate, CQ HealthBeat reports. According to CQ HealthBeat, House and Senate leaders "haven't fixed the size of a new economic stimulus package they may take up this year" after the election but "have said they are interested in a package in the $150 billion range" that includes a temporary increase in federal Medicaid matching funds.

Nouriel Roubini, an economics professor at New York University, said that lawmakers should pass a $300 billion to $400 billion stimulus package that includes "public works, infrastructure spending, unemployment benefits, tax rebates to lower-income households and provision of grants to cash-strapped local governments." Simon Johnson, a professor of entrepreneurship at Massachusetts Institute of Technology, said that lawmakers should approve a $450 billion stimulus package that includes funds for state and local governments to replace funds eliminated for current programs. However, Richard Vedder, a fellow at the American Enterprise Institute, said that lawmakers should wait one to two months to pass a stimulus package to allow the "healing effects of the market" to take effect.

Additional Testimony
Vincent DeMarco, president of the Maryland Citizens' Health Initiative, said that lawmakers should approve a stimulus package that includes a temporary increase in federal Medicaid matching funds to allow a recent expansion of the state Medicaid program to continue. In "just three months, over 16,000 uninsured Marylanders have signed up for coverage, demonstrating the great need for this expansion," DeMarco said, adding, "We know that many of the people who would be hurt if Maryland's new Medicaid expansion is curtailed are in particular need of health care coverage now because of the economic downturn" (Reichard, CQ HealthBeat, 10/30).

Rep. Kevin Brady (R-Texas) raised concerns about the benefits of a stimulus package. He said, "Already there is ample evidence that (the stimulus) will simply become a Christmas tree of pet projects, from Amtrak to Medicaid, adorned with financial handouts to local and state governments whose spending has outpaced even that of Congress" (CongressDaily, 10/30).

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