A bill that would funnel federal money to states by helping them with a larger share of their Medicaid costs has failed repeatedly in Congress, most recently last week. Thirty states have already included a new round of federal money in their budgets, Washington among them, assuming that Congress was sure to approve it given its past support and the fiscal chaos likely to ensue if the money is not forthcoming. The bill would extend critical unemployment benefits to the long-term unemployed and increase support of the Federal Medical Assistance Percentages program. Without it, states will have to slash jobs to try to balance their budget. The jobs in danger include those who provide child welfare services; help the elderly and disabled; and treat victims of domestic abuse.

There is now serious doubt that the federal government will provide new aid to extend a program in the stimulus bill that is scheduled to expire at the end of December. Beyond harming the larger economy, deep cuts by states would also jeopardize social services even as stubbornly high unemployment rates and other lagging effects of the downturn are fueling demand for the services. With Medicaid and education comprising the lion's share of state budgets, the cuts are likely to hit key programs.

Washington State’s governor, said in a recent statement, “The consequences of losing FMAP funding for our state and to all states are serious. For us, closing the resulting gap could mean a 7.4 percent cut across the board to all programs not protected by our state constitution or federal requirements.” Gregoire said.

The budget passed during the last legislative session included $480 million in additional FMAP dollars after President Obama included it in his budget, the U.S. Senate passed the extension once, and the U.S. House of Representatives passed the extension twice. If the Washington State fails to receive the funding, it would result in a $200 million deficit for the remainder of the 2009-2011 biennium.