Federal aid the Legislature was counting on won't arrive in Minnesota before the adjournment.
WASHINGTON -- Minnesotans cannot count on the federal cavalry riding over the hill with any crucial lumps of cash to help resolve a $3 billion budget crisis before the Legislature adjourns next week, members of the congressional delegation said Thursday.
A much hoped-for $408 million in extra federal funding that legislators had been assured could be used to help close the gap now appears to be limbo.
The money is tangled up in a monster-sized federal jobs bill whose own passage is uncertain. While Democrats in Congress have vowed to pass the bill soon, they have yet to reach a deal on how to pay for the $140 billion package of unemployment benefits, health care subsidies and tax breaks.
Minnesota is just one of 24 states relying on Medicaid provisions in the jobs bill that would extend additional medical assistance. Normally a 50-50 partner in the Medicaid program, Washington agreed last year to up its share to 60 percent under the 2009 Recovery Act, also known as the economic stimulus bill.
The problem is that the enhanced Medicaid provisions of the recovery act expire at the end of 2010 -- midway through Minnesota's fiscal year.
Both the U.S. House and the Senate have passed legislation to extend the higher federal payments for another six months. But with Congress facing its own budget problems, negotiations have yet to even begin to reconcile differences between the House and Senate versions of the bills.
Minnesota's allotment under the proposed six-month extension is about $408 million, roughly 15 percent of the state's $3 billion budget hole.
As far back as February, Pawlenty had attempted to book the funding as part of his solution to balance the state's budget, using it to eliminate a deficit that, at the time, was under $1 billion. Since then, both Pawlenty and DFL legislative leaders have continued to hope for the money even as it appears to fade out of reach.
"I'm confident the Congress will pass it," said U.S. Rep. Keith Ellison, D-Minn. But, he added, "I can't guarantee that, and I don't think anyone can."
Ellison was one of 219 House members who signed a letter to House leaders last week demanding "swift action" on the Medicaid money. Three other Minnesota Democrats, Jim Oberstar, Betty McCollum and Tim Walz, also signed.
Notably absent was fiscal conservative Collin Peterson, a member of the "Blue Dog" Democratic faction that normally demands budget "offsets" for any new spending. No Minnesota Republicans signed the letter.
Minnesota's John Kline, the ranking Republican on the House Education and Labor Committee, said that while some additional Medicaid funding will likely be passed this year, it won't come by Monday _ the day the state Legislature must adjourn its regular session.
"The bottom line for Minnesota is the same reality being faced by my colleagues in Washington," Kline said. "The only way we can get our fiscal house in order is to rein in spending."
With deficit spending looming as a potent election-year issue on both sides of the aisle, some health care advocates worry that all or part of the extra Medicaid money could drop out of the federal jobs bill entirely.
"We're concerned about that," said Steve Francisco, a federal budget analyst for the Minnesota Council of Nonprofits. "We don't want them to do that."
Kevin Diaz is a correspondent in the Star Tribune Washington Bureau.