House members Tuesday sent to President Obama a $26.1 billion measure that would extend but gradually phase out higher federal Medicaid payments to states through June 30 and provide $10 billion to local school districts to prevent layoffs.
The bill was approved mostly along party lines by a vote of 247 to 161. Obama signed the measure late Tuesday. He had publicly called for its prompt passage yesterday.
“It’s one thing for states to get their fiscal houses in order and tighten their belts like families across America,” he said. “But we can’t stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe.”
The Senate had approved the bill Aug. 5 by a vote of 61 to 39.
The vote on Tuesday came after House Speaker Nancy Pelosi, D-Calif., called congressional members back to Washington this week specifically to vote on the bill after they had already departed for an August recess, which is slated to run through Sept. 13.
The measure would increase the Federal Medical Assistance Percentage — federal matching funds for Medicaid — next year by 3.2% for the first quarter and then lower the figure to 1.2% for the second quarter.
The FMAP had been increased since February 2009 to at least 6.2% due to a provision in the American Recovery and Reinvestment Act. However, that increase is currently set to expire at the end of this year.
The extension of the increased payments at the lower rates through next June would provide a total of about $16 billion in extra funding for Medicaid programs. The additional funding would assist states through fiscal 2011, but would not fully close many of the budget gaps they are combating.
Roughly half of states had assumed in their budgets that they would be receiving additional FMAP funds through an extension. Governors have been engaged in a full-court press to get the aid extended in recent months, warning that failure to do so would force states to make billions of dollars in cuts and lay off thousands of workers.
To offset the costs of the FMAP provision, which were calculated by the Congressional Budget Office to be at least $16 billion over 10 years, the bill includes an earlier sunset date of March 2014 for ARRA food stamp benefits and the recision of funding for other programs, among other actions.
House Democrats claimed the bill would save or create over 319,000 domestic jobs, including 161,000 teacher jobs. However, Republicans contended the bill amounted to a state bailout and is offset with tax increases that will actually damage efforts to create jobs.
Previous attempts to extend the boosted FMAP provision at the full 6.2% rate came up short, as the bill originally containing the provision was blocked by Senate Republicans who argued it would add to the federal deficit.
