Dems get pre-recess victory as Senate breaks funding impasse

The long slog is all but over.

After months of trying, the Senate on Wednesday voted to end debate on legislation providing states with billions of dollars in emergency Medicaid funding through the first half of 2011. 

The vote lends a pre-recess legislative victory to Democratic leaders, who have struggled for months to pass the measure under threat from the nation's governors that a failure to do so would lead to layoffs and cuts to safety-net programs nationwide.

The tally was 61 to 38, with Maine GOP Sens. Susan Collins and Olympia Snowe joining every Democrat in favor of the bill.

"Many states have made tough, responsible choices — cutting important programs and [making] adjustments," Sen. Charles Schumer (D-N.Y.) said just before the vote. "We can't afford to kick them while they're down by denying them the [Medicaid] and teacher funding."

The two moderate Republicans were drawn to support the measure after Democratic leaders scaled back the Medicaid provision from $24 billion to $16.1 billion and provided offsets for the cost of the entire package, which includes $10 billion for education programs to prevent teacher layoffs.

The offsets didn't win the support of most Republicans, who called the package a bailout for teacher unions. "Let's not be coy about what's happening around here," Sen. Judd Gregg (N.H.), senior Republican on the Budget Committee, said prior to the vote. "The education unions are the single biggest interest group represented at the Democratic National Convention."

For liberals, the offsets came at a price: Almost $12 billion of the $26.1 billion tab is covered by cutting food stamp benefits to low-income Americans beginning in 2014. 

Wednesday's cloture vote sets the stage for a final passage of the bill no later than Thursday afternoon — depending on how long GOP leaders want to delay. 

Congress approved $87 billion in emergency Medicaid funding to help states weather the economic downturn that's squeezed local budgets nationwide. The provision increased Medicaid's Federal Medical Assistance Percentage (FMAP) — which represents Washington's share of the state-federal program — by at least 6.2 percent for all states. 

That extra funding expires at the end of 2010 — halfway through the budget year of most states, prompting Democrats to push for an extension. 

Their original plan to keep the 6.2 percent increase through June 2011 went nowhere in the face of Senate budget hawks. Instead, Democratic leaders adopted a plan, long-supported by Collins, to scale out the extra funding over the six months. 

The measure that passed Wednesday provides a 3.2 percent FMAP bump for the first quarter of next year, and a 1.2 percent hike in the second quarter.

The House is expected to approve the measure when lawmakers return from the August recess.