The Senate voted for a new $26 billion state aid bill yesterday, and it could be the last major stimulus bill we see. The Maine Republicans who defected to side with Democrats said they don't expect to vote for another piece of state stimulus again.
The bulk of the bill, $16 billion, goes to shoulder an extra bit of the struggling states' Medicaid burden. This brings the total federal assistance on Medicaid -- through a program called FMAP -- over $100 billion through mid-2011. What the heck is FMAP?
States pay Medicaid for low-income families, and the feds pick up a portion of the tab every year. That portion is called FMAP, or the Federal Medicaid Assistance Percentage. When the recession bit, states couldn't afford their share. So, like a friend who takes the check after his buddy loses his job, the feds told the the states, we'll pay for more Medicaid, so you can keep paying for firefighters and roads. Every state got some assistance, and harder hit states got more. For more on the numbers and state-by-state figures, check out this explanation.
The debate over FMAP is a microcosm of the stimulus controversy. The way I see it, the stimulus wasn't this huge ogre of federal spending that vastly expanded the government. The Recovery Act was basically the Replacement Act. It was about keeping things as close to pre-recession normal as possible.