Senate advances Medicaid bill, saving state from special session

Published 10:56 am Wednesday, August 4, 2010

OLYMPIA – Gov. Chris Gregoire won’t be calling lawmakers back for a special session nor proceeding with across-the-board budget cuts after the U.S. Senate moved ahead today on a bill to send additional Medicaid and education funding to states.

On a 61-38 vote, the Senate avoided a filibuster on the bill containing $16 billion of enhanced funding for Medicaid assistance and $10 billion for preserving jobs of public school teachers.

Washington’s estimated share is $503 million, which is more than enough to paper over an estimated $312 million hole in the state’s current budget.

Final action on the bill is slated for Thursday.

“What we clearly have done is avoid the special session,” Gregoire told reporters.

The bill would extend programs enacted in last year’s stimulus law to help preserve the jobs of teachers, police officers, firefighters and other public employees.

The legislation is scaled back from versions that stalled earlier this summer as part of a larger tax-and-spend measure extending jobless benefits and a variety of expired tax breaks. The first piece is $16 billion to help states with their Medicaid budgets in the first six months of next year.

It’s less generous than the help provided under the stimulus law but is still desperately sought by governors, who have already made big budget cuts as tax revenues have plummeted in the recession and warn of even worse cuts if the federal help is not continued.

The measure also contains $10 billion to help school boards hit with similar budget woes avoid teacher layoffs this fall.

“This legislation makes a difference,” said Sen. Patty Murray, D-Wash. “Real people in real jobs. Real paychecks.”

But most Republicans opposed the measure, calling it a payoff to public employee unions and warning that it would make the states ever-dependent on federal funds.

The spending is accompanied by tax increases and spending cuts to avoid increasing the budget deficit. The bill eliminates in March 2014 an expanded food stamp benefit enacted last year and limits the ability of some U.S.-based multinational companies to use foreign tax credits to reduce their U.S. taxes.

“That would have the effect of driving jobs overseas,” said Sen. Lamar Alexander, R-Tenn.

Democrats, who control the chamber with 59 votes, needed to pick up at least one Republican to muster the 60 votes required to defeat the GOP filibuster.

Today’s vote to break the filibuster came after Democratic leaders made final tweaks to the measure in hopes of winning over Maine Sens. Olympia Snowe and Susan Collins. The duo also provided the key votes last month to pass a six-month extension of jobless assistance for the long-term unemployed.

The Senate still must vote on the legislation and send it to the House of Representatives for action.

Because the House is in recess, a vote in that chamber would not take place until after Labor Day unless members are called back into session early.

The Associated Press contributed to this story.