Congress’ failure to pass a six-month extension of enhanced federal matching funds under the Federal Medicaid Assistance Program will deprive states of billions of dollars in expected revenue, lead to drastic cuts in programs and result in the loss of thousands of jobs, 13 governors warned Wednesday.
The bipartisan group gathered here to complain about the cuts their already strained budgets will face if Congress does not find a way to pass the extension before the enhanced FMAP assistance expires at the end of the year.
The event marks the latest attempt by governors to cajole Congress into extending the program. They have repeatedly called for an extension through June 2011.
With several state fiscal years beginning today , 29 of them have included their share of the expected FMAP funds in their upcoming budgets, meaning they could be forced to fill holes worth hundreds of millions of dollars if the money does not materialize, according to the governments.
Pennsylvania Gov. Ed Rendell said the budget his state’s legislature is finalizing and that he expects to sign in the next few days is counting on $850 million of FMAP funds.
Filling those gaps would mean additional cuts and layoffs, and could endanger a nascent economic recovery nationwide, the governors said.
“Inaction, I think, and economists across the nation agree, will force the nation into a double-dip recession,” said Michigan Gov. Jennifer Granholm, who said she was here to “beg Congress, particularly the Senate, to find the votes to extend these emergency measures.”
“We are in a very fragile recovery right now, the last thing we need to do is lay off people now,” said Washington Gov. Chris Gregoire. “This is the worst possible time.”
Credit rating analysts have said they are watching how states handle their budgetary challenges, including the potential loss of enhanced FMAP funding. But any reluctance to issue debt because of their financial troubles could be cancelled out by the attractiveness of historically low interest rates, according to state fiscal analysts.
The enhanced FMAP funds were originally authorized by the American Recovery and Reinvestment Act, but that authority will expire at the end of this year.
Although the governors said they are not stumping for any specific piece of legislation, the House passed a bill in May including the FMAP extension, as well as a two-year extension to the Build America Bonds program and other extensions to bond provisions.
That bill has since stalled in the Senate over concerns by Republicans and moderate Democrats that the costs are not fully offset by other provisions designed to raise revenue.
Democratic leaders in the Senate tried to pare down the bill last week to obtain more votes, but ultimately tabled it after the last amendment still carried a $31 billion price tag and was defeated on a third procedural vote.
“Until Republicans join us in supporting this legislation that will help the middle class and strengthen the economy, we will not be able to move forward,” a spokesperson for Senate Majority Leader Harry Reid, D-Nev., said last week.
In addition to Rendell, other governors on hand to support enhanced FMAP funds during the call today were: Granholm, Gregoire, New York Gov. David Paterson, Maryland Gov. Martin O’Malley, Kansas Gov. Mark Parkinson, California Gov. Arnold Schwarzeneggar, Illinois Gov. Pat Quinn, Connecticut Gov. Jodi Rell and Colorado Gov. Bill Ritter. Rendell said North Carolina Gov. Bev Perdue, Arizona Gov. Jan Brewer and New Jersey Gov. Chris Christie all support the extension as well.