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Murray Urges Obama to Include at least $100 Billion for Medicaid Funding in Economic Recovery Package

Jan 16 2009

In letter to President-elect, Murray says temporary funding is desperately needed to help Washingtonians continue to access health care

(Washington, D.C.) – Today, U.S. Senator Patty Murray (D-WA) wrote to President-elect Barack Obama, urging him to include no less than $100 billion for Medicaid funding in his proposal to jumpstart the economy. 

The Center for Budget and Policy Priorities has indicated that at least 44 states, including Washington, are facing budget shortfalls, which in many cases are forcing them to cut health care and other vital services.  These cuts are occurring even as millions of Americans are losing their health insurance because of job losses or cutbacks related to the economic crisis.  In the letter, Senator Murray said that the temporary Medicaid assistance is critically necessary to help Washington avoid drastic cuts that would cause millions of people to lose access to health care. 

“Washington and states across the country are facing no-win situations as they write their budgets and weigh which critical services to cut.  Particularly in tough economic times, families across our state depend on the assurance of health care,” Murray said.  “That’s why I’m urging President-elect Obama to help Washington state families and provide the needed funding for Medicaid in his economic recovery package.”

The full text of the letter to President-elect Obama is below:

January 15, 2009

The Honorable Barack Obama
The Presidential Transition Team
Washington, DC  20270

Dear President-Elect Obama:

We write with grave concern about our states’ economic crises.  As you know, states are facing record budget shortfalls – the most recent data released by the Center for Budget and Policy Priorities indicates that at least 44 states are facing budget shortfalls for the current and next two state fiscal years totaling more than $350 billion.  Since they cannot run deficits, states are cutting vital services such as health care for the neediest citizens who rely upon the Medicaid program.  These cuts are occurring as millions of Americans are losing their jobs and health insurance.  State budget cuts deepen the recession and undercut an economic recovery. 

Approximately 60 million Americans, half of them children, rely upon Medicaid for necessary medical care such as basic doctors’ visits, prescription drugs, radiological services, dental care, and hospice care. Cutting these services will most certainly cost lives and will further unravel our already weak social safety net.  Medicaid providers will also suffer significant losses. 

There is no question that we face hard choices in every area of priorities in the economic recovery package.  But various experts have agreed that the hallmark of a good stimulus is that it is well-targeted, temporary and timely.  Fiscal relief through a temporary increase in federal Medicaid payments to the states effectively meets all these criteria.  A number of economists have called for substantial fiscal relief to the states including Mark Zandi, Paul Krugman, Lawrence Summers, Jared Bernstein, and Alan Blinder. 

It is important to note that in 2003, Congress passed a $20 billion state fiscal relief package with money going to states through Medicaid in response to an economic downturn.  The Kaiser Commission on Medicaid and the Uninsured has documented how the temporary increase in the federal Medicaid matching rate provided in 2003 allowed states to avert state Medicaid cuts, and in some cases allowed them to reverse cuts they had previously made.

States are facing stark choices in budget cuts and tax increases, both of which will drag down the economy further and undercut the very purpose of the stimulus.  We cannot allow this to happen.  One of our most powerful tools is assisting states to maintain their Medicaid services. 

We urge you to include no less than $100 billion for Medicaid funding in the economic recovery package.