Senate Democrats look to offset FMAP

Senate Democratic leaders are looking to fully offset an extension to the Federal Medical Assistance Percentage (FMAP) included in the so-called tax extenders bill, sources told The Hill.

If the goal is achieved, the only unpaid portion of the bill will be a six-month extension to unemployment insurance. 

Senate Finance Chairman Max Baucus (D-Mont.) is working on the third iteration of the extender bill and hopes to wind down the increase in FMAP spending that originated in last year's stimulus bill. 

The legislation could be introduced either Tuesday evening or Wednesday. Once the bill is unveiled, Senate Majority Leader Harry Reid (D-Nev.) will seek to overcome procedural hurdles and file cloture on the measure.

Sen. Susan Collins (R-Maine) has advocated phasing out increased funding to FMAP for more than a year, but her support for the measure could hinge on whether other Republicans support the bill before she signals her intentions toward the legislation.

Sen. Olympia Snowe (R-Maine) is another conservative that could support the bill. But Democratic leaders need to address her concerns with the tax increase on S corporations to get her to consider supporting the measure. She is not expected to announce her opinion on the bill until she reviews the entire package, sources said. 

Sen. George Voinovich (R-Ohio) is also being sought after by Reid to support the bill. He appears to remain opposed to the bill, sources said. 

Sen. Joe Lieberman (I-Conn.) has signaled he could support the bill. However, earlier Tuesday he told The Hill he remains concerned about the deficit spending in the bill. If Baucus can reduce the deficit figure, Lieberman might support the bill, sources said.