The billion dollar wish

At a press conference on Monday, Jan. 25, Governor Christine Gregoire said once again that she hopes to get up to $1 billion from the federal government to help with Washington state’s $2.6 billion budget crisis. “We need the federal government as a partner,” said Gregoire. Yet it seems highly unlikely that the federal government will bail out Washington state before this year’s legislative session ends on March 11. That means lawmakers must either raise taxes, make deep cuts in state spending or, most likely, both. 

Around $518 million of Gregoire’s $1 billion wish is related to the state’s health care spending on three programs: Medicaid, the Basic Health Plan and General Assistance – Unemployable ($400 million is education related, but that’s a story for another day).

Here’s the good news on federal health care money: In Section 2001 (a)(4)(A) of the 2409-page health-care reform bill that passed the U.S. Senate on December 23, 2009, U.S. Senator Maria Cantwell, D-Wash., managed to insert an amendment that would aid Washington as well as other states. “Senator Cantwell has done yeoman’s work,” said Gov. Gregoire.

The Cantwell amendment essentially would, starting on April 1, 2010, get the feds to match the state’s spending on the Basic Health Plan, which is subsidized health insurance for the working poor — those who earn up to twice as much as the federal poverty line. Jonathan Seib, the governor’s health policy advisor, says that, if enacted into law, the Cantwell amendment could net Washington state between $25 and $40 million in payments for BHP through the end of the 2009-11 budget.

Elsewhere in the U.S. Senate’s health care bill, there is a new proviso that all Americans who make up to 133 percent of the federal poverty rate would qualify for Medicaid, according to analysts at the state Department of Social and Health Services (DSHS). That is also good news for Washington because it would pick up the health-care costs of the state’s General Assistance – Unemployable (GAU) program for poor, disabled, childless adults. DSHS analysts estimate the federal money at about $28 million for the rest of the biennium.

Of course, the U.S. Senate’s health care reform bill, and the Cantwell amendment along with it, will almost certainly die. That’s because of  the nation’s newest U.S. senator, Massachusetts Republican Scott Brown, who won a special election on January 19 for the seat held previously by deceased Senator Ted Kennedy. Brown’s election has all but killed any comprehensive legislation reforming the U.S. health insurance system by changing the nation’s political climate and giving Republicans 41 votes to filibuster in the U.S. Senate.

State Senator Chris Marr (D-Spokane), a leader of the Senate’s Democratic caucus, is not counting on the federal money. “Any reasonable assessment is that those dollars are in doubt now,” Marr says. “The size and the certainty are very much in doubt [and] the timing is not good. All the way around it’s bad news.”

So if the money for BHP and GAU health insurance seems unlikely to arrive, what about the Medicaid money? Medicaid is a program mostly targeted to providing health insurance to poor parents with dependent children. It is already established as a program that is jointly funded by federal and state governments. Last year, the U.S. Congress, in the federal stimulus bill, increased Medicaid payments to the states but only through the end of 2010. Now states are lobbying Congress to extend that increase. “A six-month extension would be [worth] roughly $450 million” to Washington state,  says Seib, Gregoire’s health policy advisor.

The problem is that this proposal has not even taken the form of federal legislation yet. The tooth fairy seems like a better bet for health care help arriving by March 11 than a federal Medicaid bonus.

So why is the governor holding out the false hope of federal money? Evidently because she so dislikes the other alternatives: raising taxes or cutting programs. At Monday’s press conference, she said, “Property tax is off the table. It’s difficult to look at the B&O [business and occupation] tax and it’s difficult to look at the sales tax when you are in an economic recovery.” Those three taxes are the only significant revenue sources that state government has at its disposal.

 Earlier in the month she said of her all-cuts budget released in December, “The budget did not reflect my values.”

So she keeps on hoping that federal money will arrive.

If wishes were dollars, we’d all spend like kings.

economy [a] olympianews.org

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