The House on Friday voted 264-158 to approve a $60.8 billion second economic stimulus package (HR 7110) that includes additional federal funds for Medicaid and other programs, CQ Today reports (Higa, CQ Today, 9/26). The bill would provide $14.7 billion in additional funds for state Medicaid programs.

Meanwhile, the Senate on Friday voted 52-42 in favor of consideration of a $56.2 billion second economic stimulus package (S 3604) that would have provided $19.6 billion in additional funds for state Medicaid programs (Sanchez, CongressDaily, 9/26). The vote fell short of the required 60 votes for approval. The bill also would have provided $1.2 billion for NIH (CQ Today, 9/26).

President Bush has threatened to veto both versions of the bill, which he maintains would "not provide short-term stimulus or long-term growth for the economy" and "would simply increase government spending, including self-perpetuating entitlement spending, by tens of billions of dollars" (Pear, New York Times, 9/27). The additional funds for state Medicaid programs included in the bills "helped provoke" the veto threat, "adding to doubts that any added congressional infusion of funds to head off state Medicaid budget cuts would take place this year," CQ HealthBeat reports (Reichard, CQ HealthBeat, 9/26).

As a result of the failure of the Senate version of the bill, the Senate likely will consider the House version, CongressDaily reports (CongressDaily, 9/26). According to the New York Times, the House version of the legislation "has little chance of becoming law on its own," but "it could become a bargaining chip in negotiations between Congress and the White House over Mr. Bush's $700 billion proposal to shore up the nation's financial system."

Comments
Rep. Frank Pallone (D-N.J.) said that the House version of the bill would "help avert cuts to state Medicaid programs," which have faced financial problems as a result of the current economic downturn (New York Times, 9/27). According to the House Appropriations Committee, the additional funds for state Medicaid programs included the bill would "prevent cuts to health insurance and health care services for low-income children and families, as well as generate business activities, jobs, wages and state sales tax revenues that states would otherwise not see."

Senate Finance Committee Chair Max Baucus (D-Mont.) on Friday said that, "during the last economic downturn, Congress increased the federal matching rate for the Medicaid program by about three percentage points for five quarters," a move that "freed up $10 billion for the states so that they did not have to cut Medicaid benefits" (CQ HealthBeat, 9/26).

Reprinted with kind permission from kaisernetwork. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at kaisernetwork/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation.  All rights reserved.