Senate gives final passage to state aid bill, House summoned for Tuesday vote

Senators voted Thursday to give $26 billion in aid to states and schools, $16 billion of which will be directed to Medicaid programs around the nation as the House prepares to return during its recess to cast votes on the legislation.

The New York Times: "Democrats hailed the passage of the $26 billion package, which was approved by a vote of 61 to 39, saying it could prevent disruptions in the start of the school year. Two Republicans, Susan Collins and Olympia J. Snowe of Maine, joined 57 Democrats and 2 independents in backing the measure; 39 Republicans opposed it." The $16.1 billion for Medicaid help will help states close budget deficits by continuing through June — albeit at a lower rate — enhanced federal matches for state Medicaid programs called the Federal Medical Assistance Percentage. "The bill does not add to the deficit since the money is generated by closing a business tax loophole and making spending cuts" (Hulse, 8/5).

Politico: "Even though party leaders expect that approval will be a slam-dunk, some early responses from rank-and-file Democrats have raised red flags about the optics of returning to a special session to vote on more spending — even if it's framed as saving teachers' jobs." Some Democrats are upset at having to put their campaigns and vacations on hold. "As lawmakers book flights back to Washington for Monday evening, many House Democrats facing reelection jeopardy have become less responsive to party whips, making it hard to get a firm vote count. Still, legislative failure seems unlikely and would be an acute embarrassment for the majority party. In the Senate, the measure was approved Thursday by all Democrats and the two Republicans from Maine after weeks of negotiations" (Cohen, 8/6).

Los Angeles Times: "One main offset approved by the Senate to avoid adding to the deficit is an earlier-than-expected phase out of an enhanced food stamp program that poorer households have been receiving under the 2009 stimulus program. The extra $80 in monthly aid would end in 2014." In addition, demand for Medicaid has risen since the recession, prompting Congress to approve the enhanced federal match for Medicaid, which it first did with stimulus funds in 2009 (Mascaro, 8/5).

Politico, in a separate story: "The measure builds on last year's giant recovery act, which boosted the base federal payment by 6.2 percent and made further adjustments depending on a state's unemployment rate. This program is due to run out in December, and the new bill would extend the aid for six months but reduce the percentage to 3.2 percent in the first quarter of 2011 and then 1.2 percent for the second" (Rogers, 8/6).

The Hill: The House Rules Committee will consider the bill at 6 p.m. Monday before moving it for consideration by the full House on Tuesday (Pecquet, 8/5).