Governors Craft Medicaid Deal They Say Bipartisan Proposal Offers Way To End Budget Impasse

Leaders of the nation’s governors said on Monday night that they had agreed on a bipartisan proposal on Medicaid, one of the major stumbling blocks in the budget impasse between President Clinton and Republicans in Congress.

The governors, at a conference of the National Governors’ Association, said they had also made progress toward a compromise on welfare, another major issue in the budget debate.

By themselves, the governors cannot alter Medicaid or welfare policy now set by the federal government. But both the White House and Republican leaders in Congress have been looking to them for suggestions about how to overcome the current impasse.

Gov. Tommy G. Thompson of Wisconsin, a Republican who is chairman of the governors’ association, said he hoped the agreement on Medicaid would be “the catalyst to break the deadlock and get everything else moving.”

Under the bipartisan Medicaid proposal approved by the governors, each state would receive a lump sum of federal money, known as a block grant, to finance health care for the poor.

But the proposal would guarantee a package of medical benefits, to be defined in federal law, to millions of poor people. The proposal thus strikes a compromise between the desire of many Democrats to keep Medicaid as an entitlement and Republican demands for block grants.

Gov. Bob Miller of Nevada, a Democrat who is vice chairman of the association, said the negotiators “agreed not to use words that were politically divisive like entitlement and block grant.”