Republican Blockade of Medicaid Worsens States’ Budget Crises

by Mike Hall, Jul 27, 2010

A new report from the National Conference of State Legislatures (NCSL) warns that if Congress does not extend Medicaid assistance to help states operate the low-income health care program, the states’ budget crises and budget gaps will grow even larger.

The Medicaid funding assistance program, known as FMAP, was originally included in legislation to extend unemployment insurance (UI) benefits for the long-term jobless that Senate Republicans blocked for more than two months. The filibuster against the UI bill was finally broken last week, but the Medicaid money was not included in the bill.

After passage of the extended UI bill, AFSCME President Gerald McEntee said:

Republicans continue to block emergency aid for state and local governments, funding that the majority of U.S. governors have specifically requested, and almost half have factored into their state budgets. Without this funding, nearly a million more jobs will be lost in the private and public sectors.

The NCSL report shows that at least 25 states assumed an extension of the enhanced FMAP funding for their 2011 budgets. Without it, according to the report, budget gaps could grow by more than $12 billion in the current fiscal year and as much as $72 billion next fiscal year, forcing cuts in vital services and jobs to make up for the shortfalls.

Corina Eckl, NCSL’s fiscal program director, says while there are some signs of economic recovery:

[G]limmers of improvement are tarnished by looming problems. States are in a tenuous fiscal position, teetering between delicate revenue improvement and the end of the federal stimulus.

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