Gregoire urges Congress’ help

Chris Gregoire and other governors who are counting on federal money they might not get tried to increase pressure on Congress Wednesday to approve higher spending for Medicare.

Without higher federal medical assistance percentages, or FMAP, Washington and some other states will have to lay off thousands of state workers, Gregoire, three other governors and a national economist said during a telephone conference.

Washington is among 30 states counting on higher percentages for their stretched budgets. President Obama has proposed some $11 billion in higher federal payments for Medicare and Medicaid patients and both houses of Congress have passed various bills, but never both chambers on the same bill.

If it has 60 votes to avoid a filibuster, the Senate is expected to vote next week on a bill allocating the money, but that proposal must then pass the House. Gregoire and other governors are lobbying their congressional delegations, trying to pick up votes. Republicans and some conservative Democrats are leery of adding to the deficit.

“I’m optimistic it will pass the Senate,” Pennsylvania Gov. Ed Rendell said. “I’m still a little nervous about the House.”

Both of Washington’s senators have endorsed the money, but the House delegation has been split. U.S. Rep. Cathy McMorris Rodgers has voted against previous bills that had the money in them but her staff couldn’t comment Wednesday on future votes.

Washington is expecting $480 million in additional FMAP money. Most of the money isn’t allocated to any particular program, but is “banked” – set aside to provide a $450 million ending fund balance the state would use to start the next fiscal biennium. If Congress doesn’t approve the money, Gregoire said the state would have to lay off about 6,400 workers starting this summer, or twice that number if the state waits until the Legislature returns in January to rewrite the budget. She repeated the possibility of calling another special session if Congress rejects the money.

Idaho is expecting about $68 million in extra FMAP money. It has structured its budget in a way that the Legislature could draw that amount next year from its Millennium Fund, established with money received from a settlement with the tobacco companies, if Congress doesn’t pass it, said Cathy Holland-Smith, division manager for budget policy at the Idaho Legislative Service Office.

Other governors on the telephone conference said they, too, would be forced into across-the-board layoffs, which they believe could kill the economic recovery.

“The nation’s economic expansion remains very tentative,” economist Mark Zandi said.

Gregoire and other governors defended their decisions to include the money in budgets before it was approved by Congress, saying they’d received assurances it was coming.

“In hindsight, it was probably premature to book it,” Zandi said. “Given the significant fiscal problems (the states) have, it was understandable to book it.”