Republican Governors Quietly Accept Federal Dollars — While Attacking Federal Spending

Republican governors stormed into state houses this January after campaigning against federal spending, and various so-called state bailouts. They won in part by painting a slanted picture of fiscal mismanagement by their Democratic predecessors.

That rhetoric — and the rhetoric of their more senior Republican peers — continues to this day, and occasionally translates into genuinely puzzling acts of malgovernance. Florida Governor Rick Scott, for example, turned down $2.4 billion in federal funds to build a high-speed rail line from Orlando to Tampa.

But in other ways, their failure to publicly embrace additional federal commitments during tough economic times has left them behind the eight ball, politically. As the costs to their states of providing needed social services has risen, and their revenue has fallen, they’re looking for sub rosa ways to take the money without catching flak from their bases.

Shortly after taking office, Ohio’s new governor, John Kasich, spoke with his home state Sen. Sherrod Brown (D-OH). Kasich wanted to gently wind down a federal matching funds expansion, which was set to expire, and he wanted government help to do it.

“When the Medicaid money runs out, when the [federal matching] money is all spent, what are we going to do to wind it down?” Brown told me in an interview in February. “And he’s hoping to get some help to wind it down. But I said I think the only way we come up with any money here is if you get — if it’s [Chris] Christie, and [Rick] Snyder in Michigan and you and Scott Walker, and some other governors, but particularly you four saying you want it, and working to get House and Senate Republican support.”

That’s Kasich the governor. Kasich the campaigner practically swore off seeking federal money, and attacked his Democratic rival, then-Gov. Ted Strickland, for “going to Washington on [his] knees with a tin cup begging for somebody else to bail us out.”

“Kasich would probably like the help, but he doesn’t think it’s possible,” Brown said at the time. “I don’t think the will’s here, certainly not on the Republican side. … Kasich was reasonable about it and I’m sure would like some help, as the last FMAP to kind of phase it out. I can say that.”

More recently, Kasich included a line in his two-year budget proposal that assumes the federal government will cut Ohio some slack on interest payments it owes to Washington.

His spokesman Rob Nichols confirms the February conversation with Brown. Nichols told me Kasich plans to make structural changes to Medicaid in light of the fact that there’s not going to be a new federal infusion. More on that plan here. He said he hopes that the federal government provides some lenience on the interest payment Ohio owes, and said Kasich’s ethos about federal stimulus has always been, “do not operate your day to day operations of your government with it — use it to make [one-time] structural improvements.”

This is a pattern that’s repeating itself across the country in comparable incarnations.

Last week, the Department of Health and Human Services approved a demonstration project to offer health care coverage to 70,000 uninsured poor people in New Jersey. It’s part of an administration effort to smoothly phase-in the health care law’s expansion of Medicaid to Americans whose income is up to 133 of the federal poverty line starting in 2014. In essence, the Obama administration is handing Republican Gov. Chris Christie federal money to provide Medicaid-equivalent benefits to non-pregnant women and children who are not yet eligible for Medicaid — to people who will become eligible once the health care law is fully implemented, but who currently have nowhere to turn.

Out of the other side of his mouth, Christie is one of the loudest gubernatorial critics of the health care law and federal spending in general. As this project was being approved, Christie, along with Texas Gov. Rick Perry, Virginia Gov. Bob McDonnell, and Mississippi Gov. Haley Barbour — all Republicans — wrote a letter to House Budget Committee Chairman Paul Ryan (R-WI), praising him for his efforts to halt Washington’s “out of control spending spree.”

“[Your budget] halts the out of control spending spree of recent years, and imposes a back to basics, fiscal discipline that voters clearly asked for in last November’s mid-term elections,” the governors wrote.

In particular, they praised Ryan’s plan to replace the current Medicaid system with a block grant program — a proposal that’s part-and-parcel of Republican efforts to repeal the health care law. “This well established approach will give states the freedom to innovate, share best practices, and create cost-effective ways to deliver quality health care to our most vulnerable populations,” they added.

These changes will not be enacted. But if they were, they’d wipe out the demonstration project in New Jersey, and dramatically slash the existing Medicaid project for current beneficiaries.

Pennsylvania’s new Republican Gov. Tom Corbett is currently waging war through the media against his Democratic predecessor, Ed Rendell, for not spending stimulus education money on transportation needs, despite strings the law attached to the money. “We spent stimulus money — stimulus money that was put in to balance the budget last year and the year before, a total, if I remember the numbers correctly, a little over $500 million went to education for one year. That’s long-term debt. It didn’t go to rebuilding the bridges. That was a choice that he made,” Corbett said recently. “I don’t agree with that choice.”

At the same time, Corbett’s budget calls for using over $300 million from the federal Education Jobs Fund to pay for basic education while reducing state expenditures by the same amount.

That move would make Rick Perry proud. Perry is as loud a critic of federal spending under Democratic rule as any Republican governor. But he gladly accepted stimulus-bill education funds and swapped them out with state education spending — in essence pocketing the money for Texas without providing any net aid to its schools.

Democrats in Congress have subsequently sought to make sure Perry doesn’t pull that trick again, but their efforts were undermined by the deal House Republicans reached with the White House to avoid a government shutdown.

President Obama probably didn’t like that part of the agreement. In a recent interview with a local Texas TV news station, Obama censured Perry. “Governor Perry helped balance his budget with about $6 billion worth of federal help — which he happily took — and then started blaming the members of Congress who had offered that help.”

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