House bill requires states make no changes in eligibility
By Jason Hoppin
The $819 billion stimulus package passed by the U.S. House has a big carrot for Minnesota lawmakers worried about the rising costs of the state's health care plans: nearly $2 billion in emergency aid that would flow directly into those programs.
But it also has a big stick: a provision barring states that accept the money from changing who is or isn't eligible for health care benefits. And that could throw a big wrench into state budget negotiations.
In trying to close a nearly $5 billion budget hole, Gov. Tim Pawlenty said he needed to make tough decisions and announced a reduction in state health care benefits, a move that could affect 113,000 Minnesota adults.
Democratic-Farmer-Labor lawmakers have used that number as a cudgel to bash the governor's budget. But the provision — should it stand once the U.S. Senate takes up its version of the bill — means Pawlenty would have to abandon that plan or risk losing billions in federal aid at a time when the state is trying to close a massive budget deficit.
"That's very good news for two reasons," said state Sen. John Marty, DFL-Roseville. "One, we could use the health care money. And some of the cuts (Pawlenty has) proposed — they're brutal."
Pawlenty put forth a major overhaul of the Department of Human Services, which oversees a trio of state-administered health care programs. Pushed mainly by an influx of people looking for state benefits, the department's budget is expected to grow a whopping 22 percent over the next two years without any new programs or services.
A Pawlenty spokesman said the governor was taking a wait-and-see approach to the stimulus bill, which was passed by the House on Wednesday and is expected to be taken up by the Senate next week.
"The federal bill still needs to be passed by the Senate and reconciled in conference committee, so we'll react appropriately when their bill is finalized," Pawlenty spokesman Brian McClung said.
Nearly 700,000 people receive health care benefits through the state. Brian Osberg, the Human Services Department's assistant commissioner of health care, estimates that figure will grow by 100,000 by 2012, exacerbated by the state's hemorrhaging job market.
In announcing the budget, Pawlenty sounded the alarm about the department, saying it threatened to overwhelm the state's ability to pay for anything else within 15 years. DFL leaders have pushed back, saying an economic crisis is not the time to cut people off from state programs.
But Washington is looming as just as important a factor in solving the state's financial woes as the state Capitol. DFL lawmakers have said their top priority is preparing for any influx of dollars from the federal stimulus package.
And Pawlenty's administration is following developments there, too.
"We're watching every minute," Osberg said. "We're watching very closely and analyzing every version that comes out. The stimulus package will influence the budget decisions back here in Minnesota."
The House version of the bill provides other benefits for families struggling during the economic crisis. One boon for families with children is an additional $2 billion, spread over two years, for Child Care and Development Block Grants.
Those funds subsidize child care for low-income working families and families where the parent is not working but receiving job training or going to school. The Center for Law and Social Policy, a Washington, D.C.-based group that focuses on legal issues affecting low-income and disadvantaged people, estimates Minnesota's share of the money would benefit almost 200,000 children.
Food stamp benefits also would increase under the program. From 2009 to 2013, Minnesota would see an increase of $175 million in the federally funded program, according to data released by Washington's Center on Budget and Policy Priorities, which researches and analyzes fiscal policy and public programs the affect low and moderate-income families.
Jason Hoppin can be reached at 651-292-1892.