States to Feds: No Pay, no Play

WASHINGTON, D.C.: Charging that the government is saddling them with obligations it won't pay for, the National Governors Associations is opposing President Clinton's plan to set a per-capita limit on Medicaid spending. The President reportedly proposes to cut the federal share in Medicaid spending by $20 billion over the next five years. Major savings would come from giving states fixed amounts per recipient. The President's plan also would limit payments to hospitals in large urban areas which treat many Medicaid patients. Since the Administration proposal guarantees benefits to anyone meeting federal guidelines, while reducing the federal share of the costs, many governors object to being forced to foot the bill for a program the federal government controls. The governors have plenty of experience with that sort of federal tactic. Last year, state and local governments picked up 42 percent of the $159 billion Medicaid bill. Governors, including Bill Clinton when he was governor of Arkansas, favor block grants that leave it to the states to set eligibility and care standards, similar to the approach spelled out in last year's welfare reform. Clinton now argues that block grants would be a demolition of the national social safety net. TIME's John Dickerson says that the governors' outcry will have a limited effect at this point in the budget battle: "It hurts Clinton a little, because the Republicans will pick it up as a nice cudgel to bash the President. But if Democrats and Republicans want to balance the budget, the governors aren't going to have much say."