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Pallone Lauds House Passage of Economic Recovery Plan That Includes Medicaid Assistance to States

Press Release

Location: Washington, DC

U.S. Rep. Frank Pallone, Jr. (D-NJ) tonight lauded House passage of an economic recovery package that includes Medicaid assistance to states. The recovery package will boost the economy, create much-needed jobs, and help provide additional relief to families who are struggling during this economic downturn. It passed tonight by a vote of 264 to 158.

The New Jersey congressman, Chairman of the House Energy and Commerce Subcommittee on Health, has led efforts in the House to assist states with their increased Medicaid costs since the beginning of the year. In February, Pallone introduced legislation to temporarily increase the Federal Medical Assistance Percentage (FMAP). The economic recovery package passed today provides states anywhere from a one to four percent FMAP increase. New Jersey would receive a four percent increase.

The economic recovery package also includes investments in infrastructure projects, including: improving our nation's aging highways and bridges, fixing crumbling schools, improving mass transit and airports and repairing public housing projects. It also invests in energy development, extends unemployment benefits for thousands of jobless Americans, and addresses the rising food crisis in this country. (A SUMMARY OF THE LEGISLATION FOLLOWS.)

Pallone issued the following statement today after the House passed the bill.

"Today, the House passed a comprehensive economic recovery package that will provide millions of Main Street Americans with help during these tough economic times. At a time when there are two potential workers for every one job, we extend unemployment benefits so workers have an access to benefits for an additional seven weeks while they look for a job. We also invest in energy development and infrastructure so our economy can once again create jobs.

"I am particularly proud of the provision that provides important financial assistance to cash-strapped states in order to maintain their Medicaid programs. Medicaid provides over 61 million Americans with access to medical care and specialized supports and services. It protects our most vulnerable populations: our poor and our disabled.

"Unfortunately, as state economies face growing fiscal pressures, the Medicaid programs in many states are threatened and millions of people are in danger of losing access to the health care coverage they desperately need.

"These cuts affect not only those already on Medicaid but also those who will come to need it as the economy continues to plummet. As people lose their jobs, they also lose access to employer-sponsored health care coverage, forcing more people to turn to Medicaid for their health care needs.

"A study conducted by the Kaiser Family Foundation found that increasing the national unemployment rate by one percentage point increases Medicaid and SCHIP enrollment by 1 million. At a time when states are already struggling to balance their budgets, this type of change in unemployment rates would increase state spending by approximately $1.4 billion.

"This economic recovery package provides a temporary FMAP increase to help avert cuts to state Medicaid programs. This is a proven strategy for stimulating the economy. A similar provision was passed in 2003 by the Republican Congress and signed into law by President Bush as part of the 'Jobs and Growth Tax Relief Reconciliation Act.' Studies have shown that the temporary increase provided the funding needed to successfully avert or limit cuts to State Medicaid program and helped stimulate their economies.

"The Medicaid assistance provision will help provide much needed fiscal relief to our states and help protect access to health care services for some of our most vulnerable citizens. I commend my colleagues for supporting the inclusion of this provision in this important economic recovery package."



In order to have an immediate effect on the economy, investments are made in infrastructure projects that can start fast, meet existing needs, and create jobs. These projects provide short term benefit by putting people to work and buying goods, but leave behind long term infrastructure improvements that will benefit Americans for years to come.

Highway Infrastructure: $12.8 billion, for our nation's aging highways and bridges, to improve safety and reduce traffic congestion.

Corps of Engineers: $5 billion to invest in the nation's water resource infrastructure with improved flood protection, navigation and hydropower and to increase the efficiency of existing water infrastructure.

Fixing Crumbling Schools: $3 billion to repair crumbling schools, provide students with first class technology, and to improve energy efficiency. One-third of public school buildings need extensive repair or total replacement and two-thirds have environmental problems unhealthy for children.

Clean Water: $7.5 billion for drinking water and sewer projects including $6.5 billion for the Clean Water State Revolving Fund and $1 billion for the Drinking Water State Revolving Fund to repair, rehabilitate and expand water systems, many of which are over 50 years old and $300 million for Bureau of Reclamation water projects, including $98 million to provide clean, reliable drinking water to rural areas and $126 million to ensure adequate water supply to western localities impacted by drought.

Transit: $3.6 billion to purchase buses and equipment needed to expand public transportation and to make improvements to facilities and $1 billion to meet growing demand for public transportation due to higher gas prices while reducing American gasoline consumption. Rising fuel costs have some transit agencies facing service reductions or fare increases.

Airport Improvement Grants: $600 million, for projects to improve safety and reduce delays at our nation's airports.

AMTRAK: $500 million, to make necessary upgrades to tracks and stations so that Amtrak can meet growing demand due to high gas prices. This year ridership has increased by 8 percent on the Northeast Corridor and 13 percent on other corridor routes.

Public Housing: $1 billion for repair and construction projects, including critical safety repairs. Every dollar of Capital Fund expenditures produces $2.12 in economic return.


Advanced Battery Technology Loans: $1 billion to support $3.3 billion in loans to encourage the manufacture of advanced vehicle batteries and battery systems - a key component to fuel efficient cars - in the United States.

Energy Efficiency and Renewable Energy: $500 million to accelerate the development of technologies that will contribute to a reliable, domestic energy supply.

Electricity Delivery and Energy Reliability: $100 million to modernize the electric grid, make energy infrastructure more secure and reliable, and speed recovery from disruptions to the energy supply.


Extension of Unemployment Benefits: Provides an additional 7 weeks of extended benefits for workers who have exhausted regular unemployment compensation (20 total weeks). Workers in high unemployment states are eligible for an additional 13 weeks of benefits (33 total weeks). Extending unemployment benefits is one of the quickest, most cost-effective forms of economic stimulus because workers who have lost their paychecks spend benefits quickly.

Medicaid Assistance: Provides a temporary increase in the Federal Medical Assistance Percentage (FMAP) for Medicaid health costs, with increases from one to four percent, at a time of increasing enrollment. These funds will prevent cuts to health insurance and health care services for low-income children and families, as well as generate business activities, jobs, wages and State sales tax revenues that States would otherwise not see.

Food Assistance: $2.6 billion to address rising food costs for seniors, people with disabilities and very poor families with children. This year, an average of 27.8 million individuals, and 12.5 million households, received food stamps.

Job Training: $500 million to help Americans find and prepare for good jobs including $400 million is for dislocated worker and youth employment activities and $100 million to provide customized help to folks receiving unemployment benefits. Unemployment claims have increased by over 38% this year and 36% exhaust their benefits before finding work.

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