TO: NDSC Members and Affiliated Parent Groups 
FROM: Susan Goodman, Director Governmental Affairs, National Down Syndrome Congress
DATE: Dec 1, 2008

Economic Stimulus Package Fails

In the November 10th NDSC Governmental Affairs Newsline we reported that, because of the severe budget cuts facing states, the National Governors Association was asking Congress to temporarily enhance the Federal Medical Assistance Percentage (FMAP) for at least two years. The federal match is the contribution the federal government makes to the states for providing services through the federal/state funded Medicaid program.

These budget cuts have a serious impact on Medicaid and the provision of community-based services for adults with disabilities and some services for children. In addition to cutting health insurance programs for children and families, programs for individuals with disabilities are also being cut.  These cuts can severely impact the support services individuals need to live independently (e.g., assistance in performing household chores, managing finances, shopping, medical and dental appointments, traveling around the community).

However, the Senate was unable to pass an economic stimulus package which contained an 8% across the board increase in the federal share of Medicaid spending.

In a recent article by the Center for Budget and Policy Priorities, it was reported that at least 41 states faced or are facing shortfalls in their budgets for this and/or next year.  Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states.   Now, they are again facing budget shortfalls. These problems are expected to continue as the economic recession deepens.

The 31 states facing mid-year shortfalls are Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, and Wisconsin.  The District of Columbia also faces a budget shortfall.

Unlike the federal government, states cannot run budget deficits. During an economic downturn the state must cut expenses, raise taxes or use reserve funds. President-Elect Obama, in his weekly radio address, urged Congress to quickly develop and vote on a stimulus bill that he could sign soon after taking office on January 20.

We will keep you posted as developments unfold in this area.

If you have questions or comments about this Newsline, please contact Susan Goodman at susan@ndsccenter.org.