AUGUSTA – The dollar amounts aren’t in yet, but Gov. John Baldacci warned Friday that the federal budget resolution passed by Congress Thursday is bad news for Maine, especially when it comes to Medicaid.

At a time when health care costs are growing, Congress proposed a $10 billion cut nationally in Medicaid in the next five years.

No one knows the exact impact to the states, but some predict it could mean cuts to Maine in the hundreds of millions of dollars, cuts the state “will be very challenged by,” Baldacci said.

“That’s going to be a further burden to citizens and families and individuals. … I’m disappointed,” Baldacci said. Medicaid is supposed to be a partnership between the states and the federal government, but the federal government “is walking away,” he said.

Baldacci noted that even before Congress approved the resolution Thursday, President Bush’s “No Child Left Behind” initiative was costing Maine between $10 million and $13 million, with Medicaid formula changes adding another $73 million in expense.

The good news is that Bath Iron Works could be spared job losses due to language in the preliminary budget resolution that says shipbuilding money cannot be used by the Department of Defense to award bids using a “winner-take-all” approach.

If destroyer contracts continue to be split between BIW and Ingalls shipyard in Mississippi, it would be positive for Maine. “It would be temporary relief,” Baldacci said.

Advocates for working families, children and the poor painted a dire picture Friday of what the budget appears to have in store for Maine, while a representative of a conservative think tank said Congress didn’t cut enough.

Christopher St. John of the Maine Center for Economic Policy said the federal budget “poses dangers” for Maine families, especially the thousands on Medicaid, including the elderly in nursing homes, the disabled and children.

He estimated that the $10 billion Medicaid cut, larger than what President Bush had proposed, means Maine would lose $300 million or more in the next five years, and that Medicaid clients would feel that loss.

St. John said the federal government is already failing to keep pace with rising health-care costs, requiring states to cut benefits and limit beneficiaries, or raise taxes. Real cuts like the $10 billion in the budget resolution darken the picture, he said.

Congress also voted to cut $25 billion in other domestic spending for food stamps, agriculture, housing, education and programs that help the environment and veterans, St. John said. The most vulnerable will be hurt, he said, calling the cuts “fiscally irresponsible.”

Bill Becker of the Maine Heritage Policy Center disagreed, and praised the domestic spending cuts.

“From my perspective, it’s good we’ve addressed some of the overspending going on in Washington, but we still have some work to do,” he said. “We have nonperforming programs that still remain on the table.”

The domestic spending cuts “are a step in the right direction,” Becker said, adding that reductions still are needed in “our welfare programs, our entitlement programs.”

Becker said the Medicaid cuts could prompt Maine to reduce health care to some and cover only the most needy, but he described Medicaid as “a problem child for the administration and for the states. It needs to be reformatted,” so that it is only serving the neediest and not the middle class.


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