Senators Bristle Over Reid's Deal

Majority Leader's Nevada would not have to chip in for Medicaid expansion

By Manu Raju
|  Wednesday, Oct 6, 2010  |  Updated 9:23 AM CDT
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Senators Bristle Over Reid's Deal

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U.S. Sen. Harry Reid (D-NV), is looking for a special deal for his state and three others.

Senate Majority Leader Harry Reid moved swiftly to ensure that his home state of Nevada wouldn’t be hurt by Medicaid changes included in the health care reform bill moving through the Senate Finance Committee.

Now some of his Democratic colleagues are demanding the same treatment for their states.

“We have to make sure Colorado is treated fairly,” Democratic Colorado Sen. Mark Udall said Wednesday.

“We’re going to take a look at the details, but if Colorado has a fair claim on being treated the same way Nevada has been, of course we’re going to ask to have that kind of treatment.”

Indiana Sen. Evan Bayh, a moderate and a critical swing vote, said he’s “sensitive to the impact that this could have on state budgets and, indirectly, education funding, property taxes and things like that.”

Asked whether states like Indiana should get special protections that were afforded to Nevada, Bayh said: “If they want our votes ultimately, I suspect that they should take our concerns into account.”

“We’re watching it,” added Arkansas Sen. Mark Pryor.

The sweeping health care bill drafted by Finance Committee Chairman Max Baucus of Montana would expand Medicaid to cover families of four with an income of roughly $29,000 per year and people with an income less than 133 percent of the poverty level.

When Baucus first floated the bill in mid-September, Reid strongly criticized it because the federal government would pick up just 87 percent of the new costs, leaving the rest to the states. But Baucus later modified the language to ensure that the federal government paid 100 percent of the costs in Nevada. Reid’s state — along with Michigan, Oregon and Rhode Island — has been given the added protections because it has been hit especially hard by the recession.

A Sept. 16 Congressional Budget Office study estimated that state spending on Medicaid and children’s health insurance would increase by some $37 billion between 2010 and 2019, and Democratic aides expect that in the end, state spending could increase by $22 billion. But those numbers will almost certainly change once the Finance Committee finishes its markup, the CBO conducts a revised analysis and a modified version is prepared for debate on the Senate floor.

At that point, it will be up to Reid, key members on the Finance Committee; the Health, Education, Labor and Pensions Committee; and the White House to forge a compromise that would satisfy 60 senators. And to do that, Senate Majority Whip Dick Durbin of Illinois said, leaders will have to be sensitive to how the bill’s Medicaid language would affect states from coast to coast.

“At some point, whether it’s with the initial merged bill or in final passage, each of us has to sit down and be satisfied that our state has been handled fairly,” Durbin said.

In the meantime, Republicans are seeking to create a wedge between the Democratic leader and his caucus over how states are affected by the Medicaid spending.

“It means they’ve got a special deal for four states, one of them being the state of Nevada,” said an indignant Sen. John McCain (R-Ariz.). “Who pays? Who pays? The other states.”

Added Lamar Alexander of Tennessee, the No. 3 Republican in the Senate: “I wonder how citizens in Wyoming, in California and Florida and other states will feel if they pay more taxes so that Nevadans can pay less taxes.”

Reid, who faces a tough reelection next year, responded sharply Wednesday, taking to the floor to defend the deal and saying the GOP’s criticism was “false.”

 

“Republicans are upset that we’re helping the hardest-hit states in this country,” Reid said. “Were these four states selected at random? No. Were they just picked out of a hat at the Finance Committee? No. Were they chosen to intentionally exclude the 46 other states? Of course not. These states — Michigan, Oregon, Rhode Island and Nevada — are suffering more than most, and that’s an understatement.”

Reid said critics should be “embarrassed” to complain about the special protections for the states, citing the unusually tough economic times, including the foreclosure crisis in Nevada and its 12.7 percent unemployment rate — 3 points higher than the national average.

“The people of Nevada are hurting, and I make absolutely no apologies, none, for helping people in my state and our nation who are hurting the most,” Reid said.

Sen. Debbie Stabenow (D-Mich.), who sits on the Finance Committee, defended Reid and predicted that the leadership would work out its differences in the end.

“He’s going to fight for his people of his state, just like I’m going to fight for people in my state,” Stabenow said of Reid. “What we’re trying to do is make sure that we are recognizing what’s happening to people across the country who have lost their jobs.”

Sen. Jeff Bingaman (D-N.M.), a member of the Finance Committee, said states would shoulder a “relatively small portion of the costs” and that the federal government would initially take on most of them. In later years, he said, states would be in a better position from an economic recovery and could handle the additional costs.

“Frankly, considering the number of additional people that would get coverage under Medicaid, I think it’s a very good deal for virtually every state,” Bingaman said.

But other Democrats remain wary and expect the issue to get renewed scrutiny once the Finance Committee finishes its work.

“I don’t want to push an unfunded mandate onto the states,” said Sen. Jon Tester, the junior Democrat from Baucus’s home state of Montana, who added that the original versions of the bill appear to hold their state “almost harmless” on Medicaid spending.

But Tester added: “I ain’t going to break the states, you know what I mean?”

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