CHN: Congress Enacts Medicaid and Education Aid Urgently Needed by States

In the final days before adjourning for August recess, the Senate overcame opposition and passed a $26.1 billion bill to provide needed aid to states for education and rising Medicaid costs. The House interrupted its recess to approve the measure on August 10, which was signed by the President the same day. The measures included in the bill are drawn from a series of proposals Democratic leaders have been working to pass this year to help prevent further job losses and spur economic growth. This task, despite continued high levels of unemployment and a still faltering economy, has proven difficult.
On August 5 the Senate passed H.R. 1586 by a vote of 61-39. The two Republican Senators from Maine, Susan Collins and Olympia Snowe, joined all Democrats in voting for the measure. The bill provides $10 billion for education jobs and $16.1 billion to extend for six months the increased federal Medicaid matching rate provided to states through the American Recovery and Reinvestment Act (ARRA). Without the extension the increased Medicaid matching rate would have expired on December 31, 2010. The additional aid to states comes at a critical time. A recent analysis by the Rockefeller Institute of Government shows that for the first time total employment by state governments has dipped below its level at the start of the Great Recession (see full analysis). A total of more than 300,000 state and local government jobs have been lost since August 2008, reports the Economic Policy Institute (EPI). H.R. 1586 is expected to help restore some of these losses. EPI estimates that the Medicaid funds will save 158,000 jobs, but more than half of these will be in the private sector (see EPI paper). The Department of Education estimates that the $10 billion for education will save 161,000 educators’ jobs. For a breakdown of education jobs saved by state click here.

To the dismay of advocates, H.R. 1586 is paid for in part by cutting short a boost in SNAP (food stamp) benefits provided in ARRA. Families would begin receiving reduced SNAP benefits in April of 2014. According to the Food Research and Action Center (FRAC) a family of four can expect its benefits to drop about $59 a month. ARRA had been written to avoid a precipitous drop in SNAP benefits from one month to the next. The increased benefits were to continue until the automatic annual inflation adjustments in regular SNAP benefits increased their value to match the ARRA levels. Although originally it was estimated that this would occur in 2014, lower than expected inflation delayed the point at which the regular benefits would meet the ARRA levels to 2018. Stopping the ARRA SNAP levels generated $11.9 billion to pay for H.R. 1586. Other offsets used to pay for H.R. 1586 include closing foreign tax credit loopholes, reducing prices paid for certain drugs by Medicaid programs, and making rescissions from previously appropriated programs. In order to secure the needed 60 votes, this bill changed the nature of the offsets from previous versions of the legislation. Certain tax breaks for corporations were allowed to continue, and cuts to navy spending said to adversely affect Maine shipbuilding were dropped from the bill.

Over 1,400 organizations from around the country have signed a letter to Congress voicing opposition to reducing SNAP benefits to pay for any other legislative priorities, regardless of the merits of those priorities. (See letter with current list of signers.)

House Speaker Nancy Pelosi reconvened the House, for a special session the week of August 9 to approve the increased Medicaid and education funding for states without delay. The House voted on the measure August 10, 247-161. Although House Members voiced concern over the SNAP cut, the House had no alternative but to vote for the Senate’s bill in order to avert tens of thousands of school system layoffs just before the start of the new school year and to prevent Medicaid service and job cuts. Anti-hunger champions including House Agriculture Appropriations Subcommittee Chair Rosa DeLauro (D-CT) and House Hunger Caucus Co-Chair Jim McGovern (D-MA) vowed to seek the restoration of SNAP benefit levels before the cut takes effect.

Other pending job measures advocates hope will pass when Congress reconvenes in September are an extension of the TANF Emergency Fund and funding for jobs for youth. Without an extension the TANF Emergency Fund program, which has allowed states to create more than 240,000 temporary subsidized jobs, will expire at the end of September. A potential vehicle for the remaining job measures is the stalled small business loan fund bill; another is the package of extensions of popular tax cuts that many in Congress would like to revive. However, the future of all these provisions is still uncertain as a minority in the Senate can tie up legislation and the remaining days for action in September are few.

Budget Report 2012 - Self-Inflicted Wounds
Education and Youth Policy
Home Energy Assistance
Labor and Employment
military spending
SAVE State Fact Sheets: 2013