A group of governors from both major political parties met with President Obama and other White House officials today to talk about the impact the so-called “fiscal cliff” could have on states. And as Statehouse correspondent Karen Kasler reports, it’s something the governor and advocates from across the political spectrum have been worried about as well.
The states received about $575 billion in federal aid in 2011, according to the National Association of State Budget Officers. And the budget cuts that would take effect without a deal on the fiscal cliff might mean about $7.5 billion in cuts to schools, environmental and other programs.
But federal funds that go to Medicaid are not among those would automatically be cut. And for Republican Gov. John Kasich, a worst case scenario is one that he thinks will be seen by some lawmakers as a simple one.
KASICH: “If you start slashing Medicaid in order to just get a magic number, there are two things that could potentially happen. One is they blow a hole in your state budget. And secondly, there are a lot of poor people that could get hurt. And I don’t like either of those.”
Medicaid is a huge chunk of the Ohio budget – about a third. Greg Lawson with the conservative Buckeye Institute says Kasich is right to worry, but that he shouldn’t stop with just being concerned about Medicaid. For instance, Lawson says, a fiscal cliff deal might involve funds to help low-income people and those who need work or perhaps even transportation money.
LAWSON: “There’s a whole bunch of things that you just don’t know what’s going to happen, so you have to be concerned about it. And when you’re in the process of crafting this massive monster here in Ohio, which is billions upon billions of dollars, and then to find out at the last minute before you have to introduce the budget that maybe you lost several hundred million dollars, that’s not going to be a joke.”
On the other side of the political fence is Jon Honeck with the liberal leaning Center for Community Solutions. Honeck says he doubts the Obama administration will propose cuts in Medicaid, but the states can’t expect to emerge from the fiscal cliff debate unscathed.
HONECK: “When the federal government is borrowing almost 40 cents on every dollar, I’ve got to believe that over time the folks in D.C. are going to be looking at all the possible alternatives, and they’re going to have come up with some revenue and they’re going to have to trim some programs.”
But Honeck hopes that lawmakers will recognize that there are still people recovering from the recession and looking for work or a better job. And Kasich cautions that cuts in Medicaid could bring more pain to those populations if the state has to adjust to those cuts.
KASICH: “As they work to avoid the fiscal cliff, they look at a Medicaid number that doesn’t really affect them, and they just cut it – pass it on to us. It’s just an easy thing for – it’s just a bookkeeping entry. Unfortunately can be – let me just not say that all of them would see it that way. But it’s just – you know, hey, we just saved $50 billion. But what was the effect of it is what I get concerned about.”
Vice President Joe Biden has been charged with talking to governors about their concerns about their budgets and the fiscal cliff, and Kasich says he’s talked to him as well as to Republicans in the Ohio Congressional delegation.