RICHMOND — A battle over Medicaid will keep Virginia’s House and Senate from passing the two-year state budget on time, legislators acknowledged Thursday, just two days before the General Assembly’s scheduled conclusion.
The state must have a budget in place by July 1, the start of the new fiscal year, to avoid what would be Virginia’s first government shutdown.
“We will not have a budget done by Saturday,” House Appropriations Chairman S. Chris Jones (R-Suffolk) said on the House floor.
House and Senate negotiators have been trying to hash out differences between two vastly different two-year state spending plans. Some met late Wednesday to discuss a compromise proposed by Sen. Emmett W. Hanger Jr. (R-Augusta), but that did not break the impasse, according to two people familiar with the negotiations, who spoke on the condition of anonymity because they were not authorized to release details.
The House version calls for expanding Medicaid under the Affordable Care Act, while the Senate’s does not. As a result, the House plan is much more flush, with more than $370 million in extra spending for schools, state employee raises and other priorities because of projected savings due to Medicaid expansion.
Gov. Ralph Northam (D) won office last year on a promise to expand the federal-state health-care program to as many as 400,000 uninsured Virginians. Republicans in the House and Senate steadfastly blocked expansion for four years under Northam’s predecessor, Terry McAuliffe (D), saying they doubted the federal government would fulfill its promise to pick up 90 percent of the $2 billion-a-year tab.
Opposition in the House softened after Republicans nearly lost control of the chamber in November elections. Cox and 18 other Republicans got on board with expansion as long as work requirements, co-pays and other conservative strings were attached.
But there has been no visible shift in the state Senate, where some Republicans have dismissed the work requirement as a “work suggestion.” The GOP controls both chambers by two seats.
Hanger has supported expansion in the past, but he has objected to some details of the current House plan, including imposing a tax on hospitals to pay for the state’s 10 percent share of the expansion. Hanger contends that proposal would hurt rural hospitals like the one he represents.
Even if the plan could be modified to suit Hanger and get out of conference, the budget would still die on a 20-to-20 vote in the Senate. Lt. Gov. Justin Fairfax (D) presides over the Senate and can break most ties, but he is prohibited from voting on the budget.
Fairfax is allowed to vote on budget amendments. So the governor could prevail by adding expansion to the budget bill as an amendment — one that could clear the Senate as long as a single Republican votes for it, and Fairfax breaks the tie.
For that to happen, the legislature would have to first send Northam a budget to amend.
The budget conferees do not foresee a quick resolution, said Jones, who heads the House’s negotiating team. Leading the other side are Senate Majority Leader Thomas K. Norment and Hanger, co-chairmen of the Senate Appropriations Committee.
“Senator Norment and myself and Senator Hanger determined after the conferees had met that there was no need to continue to meet if we could not get a budget agreement by Saturday,” Jones said. “And we’ve really no hope of getting one in the next handful of days.”
Opposing sides could not even agree on how to continue discussions, a question that requires approval of a two-thirds supermajority. In the Senate, Republicans tried to extend the current session by 30 days, but Democrats killed that plan as well as another GOP resolution to extend the session by three days. Plan C, a resolution directing Northam to call a special session, remained in limbo.
The impasse comes as no surprise given that the rival spending plans are unusually far apart. Some pro-expansion legislators contend that Senate holdouts simply want the process to drag on a bit longer, so they can justify a pro-expansion vote as a means of averting a government shutdown.
Senate Republicans have given no sign of caving. Some have been dismissive of Cox’s argument that Medicaid expansion is a way of working with Vice President Pence, who presided over expansion as governor of Indiana, and the Trump administration more broadly, which is granting waivers to states that want to enact work requirements and co-pays.
Republican holdouts gleefully circulated a tweet issued last week by the media office of Mick Mulvaney, Trump’s director of management and budget.
“Director @MickMulvaneyOMB’s statement on the Obamacare Medicaid Expansion in Virginia,” read the tweet, which linked to a news story on a provision in Trump’s proposed budget that calls for repeal of the ACA.
Pro-expansion Republicans and Democrats noted in response that ACA repeal and Trump’s budget appear to have stalled in Washington.