States struggle to adjust to tightening purse strings

News outlets examine how Washington's budget-cutting mood could lead to program changes — both in the short and long term.

Stateline: States Adjust To A More Frugal Washington
A more sweeping idea to rearrange federal-state finances comes from Republican U.S. Rep. Paul Ryan and former Clinton administration budget director Alice Rivlin. They have proposed switching Medicaid away from the current structure, in which the federal and state governments pay an equal share of the cost. They would replace it with a fixed federal block grant to states, similar to the way federal welfare funds are provided. ... Ryan's new position as chairman of the House Budget Committee may give the block grant idea new momentum (Prah, 1/11).

National Journal: Medicaid Funding Key In Mental Health Services During Recession
The Medicaid crunch — and the lack of mental health services that goes along with it — is likely to get worse this year, as enhanced federal Medicaid funding expires in June. Congress passed the additional funding in August after state governors issued dire warnings about fiscal 2011 budgets without the extra funds (McCarthy, 1/11).