Members of Congress plan ‘significant dollars’ for easing deficit
Aid for New York sought in federal stimulus package
WASHINGTON — New York’s congressional delegation will push for major aid to the state in a new federal economic-stimulus package early next year, including a big boost in Medicaid funding that could cut billions of dollars from the state’s giant deficit.
The delegation met Wednesday with Gov. David A. Paterson, a day after the Democratic governor saw his deficit-reduction package die amid a partisan impasse in the State Legislature.
While state and federal lawmakers stressed that the state is largely responsible for solving its own problems, they also said they will encounter a friendlier environment in D. C. once President-elect Barack Obama and a Democratic-controlled Congress with stronger majorities take office in January.
Congress will take up a stimulus package next year that will be far larger than the one currently destined to fail in the Senate, and increased aid to the states will be included, said Sen. Charles E. Schumer, D-N. Y.
“It’s going to be significant dollars,” said Schumer, who wields considerable clout as the Senate’s third-ranking Democrat.
“It won’t erase the problems of the state, but it will really alleviate them a great deal,” he added.
The state faces a deficit at $2 billion in the fiscal year that will end March 31 and at least $12.5 billion in the following year.
After his meeting with the lawmakers, Paterson argued that the federal government owes New York additional aid that would help solve its fiscal problems.
The state paid Washington $61.2 billion more in taxes than it received in federal services in 2006, and that figure grew to a whopping $86.9 billion a year later, Paterson pointed out.
“We are hopeful that under the new president and the new leadership in Congress, we will be able to receive greater funding from Washington, which is not really a handout as much as a handback,” Paterson said.
Lawmakers said the largest portion of the increased federal aid would likely come in a boost to federal Medicaid funding.
Of the $100 billion stimulus proposal currently in the Senate, $40 billion consists of increased aid to states for their Medicaid programs — and New York would benefit more from the increase than any other state, Schumer noted.
State Sen. Malcolm A. Smith of Queens — the presumptive leader of the State Senate’s new Democratic majority — said lawmakers would be pushing for a 5 percent increase in Medicaid funding.
That would bring an additional $4 billion a year to the state, Smith said. In other words, it would reduce the state’s $12.5 billion deficit for the coming fiscal year by nearly a third.
In addition, Schumer said, the stimulus plan will likely include infrastructure funding that would bring jobs to New York.
Federal and state lawmakers acknowledged that it’s difficult to estimate, at this point, how much of an aid increase the state would receive.
“It will depend on how compelling an argument New York State can make,” said Rep. Brian Higgins, D-Buffalo.
Smith said the state would be able to boost its federal lobbying effort if the State Legislature were to take action first to address New York’s fiscal crisis.
“I think it’s important for any state to show that it can manage its own fiscal home,” he said.
With the fight for a huge increase in Medicaid funding yet to come, Schumer and the state’s other Democratic senator, Hillary Rodham Clinton, won a smaller battle Wednesday, extracting changes in a proposed federal rule that previously would have led to $65 million in Medicaid funding cuts to medical clinics in the state.
“We secured a significant victory today, and now hundreds of thousands of New Yorkers will continue to have access to vital health services,” Schumer said.
Clinton agreed. “This is a great victory,” Clinton said, “for thousands of New Yorkers who rely on essential free-standing health clinics for critical health care.”
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