Gregoire relieved as aid bill advances in Senate

Washington state lawmakers apparently have dodged, for now, the need for a special session and deep budget cuts after the U.S. Senate on Wednesday cleared the way for $26.1 billion in additional federal aid to states for Medicaid and public schools.

Senate Democrats, with the help of two moderate Republicans from Maine, broke months of partisan standoff by passing a key procedural vote — ending a GOP filibuster — on an amendment by Sen. Patty Murray, D-Wash.

For Washington state, the measure would bring in more than $500 million — a combination of additional funding for public schools and extra matching money for Medicaid, the federal-state health-insurance plan for the poor.

The measure passed 61-38.

It passed the full Senate Thursday by 61-39. House members already are on recess, but House Speaker Nancy Pelosi said she would call a session early next week to vote on the measure and send it to President Obama.

"I'm pretty confident ... that the vote should be fairly positive in the House," Murray said.

For Murray and Senate Democrats, the expected legislative triumph would position them as saviors of cash-strapped states and imperiled teachers heading into the November elections.

State officials and educators had lobbied intensely for the federal aid for weeks. But the money was stripped out of previous bills in the face of a Republican blockade. Republicans depicted the spending measure as a form of vote-buying.

Murray's amendment calls for $10 billion to save 130,000 teaching jobs across the country. School districts would be required to spend the money only to retain, rehire or recruit teachers during the upcoming academic year.

An additional $16.1 billion would be spent to temporarily boost the federal share of Medicaid spending, a huge budget burden for states. Washington typically splits the cost of the Medicaid program 50-50 with the federal government.

But under the federal stimulus plan, the federal match has been increased to 62 cents since October 2008 until the end of December, netting the state an extra $1.7 billion.

Murray's amendment would extend the enhanced match, although gradually ramping it down to 58 cents, for six months.

Murray and Senate Democrats cobbled together spending cuts and higher tax revenues to cover the tab for the aid package. The cuts would come from wide swaths of programs, from paring back student aid to rescinding funding for National Park Service and ammunition for the Army.

Gov. Chris Gregoire said she's now confident that Washington will receive the federal aid, which would largely solve the state's immediate budget problems and forestall further cuts, at least for now.

A budget fix — for now

Washington and many other states had been counting on the federal money to help balance their current budgets.

Gregoire said she had been preparing for across-the-board cuts of at least $227 million, or about 3.5 percent, in the current fiscal year that runs through June 2011. Beyond that, the state faces a $3 billion shortfall in the next two-year budget.

The governor had not planned to call a special session because there was no consensus among lawmakers regarding more targeted cuts.

Senate Majority Leader Lisa Brown, D-Spokane, said she told the governor last week her caucus wasn't in favor of a special session, in part because lawmakers were unlikely to come to a quick agreement.

Some Democrats also were concerned that Republicans would use a special session, held before the elections, to take pot shots at their party.

Now, that all appears moot.

Gregoire said it's still possible the state will be forced to make more cuts in spending this year if state tax collections decline over the next few months.

But, "I can't imagine, no matter what happens in the September (revenue) forecast, that we will face the kind of draconian cuts we were facing here," Gregoire said.

Some state Senate Republicans, however, say a special session is still warranted.

"If next month's revenue forecast is down significantly, the debate about how to save the budget — either let the governor cut or call the Legislature into special session — could begin all over again," Sen. Mark Schoesler, R-Ritzville, said in a statement.

"A special legislative session is still absolutely needed because it would get us started on setting priorities and restructuring the budget."

In Washington, D.C., Murray attacked congressional Republicans for their repeated, virtually unanimous opposition to recent Democratic legislation.

"At every turn, here in the Senate, we have been opposed by those on the other side of the aisle who seem to have long ago made their own choice about anything and everything that comes to this floor," Murray said on the Senate floor.

"The bottom line is that without this amendment, much of the progress states have made to get back on the right economic track will be endangered."

Andrew Garber: 360-236-8266 or agarber@seattletimes.com