Cuomo's Medicaid dilemma

Gov. Andrew Cuomo says he cannot get the state budget done unless the federal government revisits a provision in a recently-passed law that makes billions in federal aid contingent on states refraining from changing their Medicaid programs. “We can't do a budget without changes to Medicaid,” Cuomo told reporters at a Saturday morning press conference at the state Capitol. 

Cuomo is basically hinting at sticking with his plans to trim $2.5 billion from the state Medicaid program, even if it costs New York state the federal aid authorized in the bill that President Donald Trump signed earlier this week. Limiting the growth of state spending on Medicaid (especially its managed long-term care program for the elderly and disabled) has been a key component of the governor’s approach since the beginning of the year to closing what was then a $6 billion budget deficit. But now it is up in the air whether many of the recently-released recommendations of his appointed Medicaid Redesign Team will actually get implemented. 

Cuomo said Saturday that he is leaning on members of Congress to amend the law. Last weekend, the governor blamed U.S. Senate Minority Leader Charles Schumer and House Appropriations Committee Chairwoman Nita Lowey for the provisions that constrain the state on Medicaid.

With coronavirus increasingly wreaking havoc on the state economy, state Budget Director Robert Mujica estimates that the state will fall short of projected revenues by at least $7 billion, beyond the $4 billion to $7 billion shortfall estimated by state Comptroller Thomas DiNapoli just days ago. The federal government appears to be the state’s best bet to get out of this fiscal mess. 

A federal emergency declaration means the Federal Emergency Management Agency can assume at least 75% of the costs directly tied to responding to the pandemic. Cuomo said Saturday that he will request that the federal government also cover the remaining 25% considering the dire fiscal straits New York is now in. More important for the state budget is the $100 billion bailout that Cuomo and several governors from neighboring states requested Friday from the federal government. 

Several state lawmakers – and a member of Cuomo’s own press team – have tested positive for the coronavirus in recent days, but that is not stopping the governor from going all out on the pending spending plan. “Pass the budget. Pass the budget. Pass the budget. Pass laws,” Cuomo said Saturday of lawmakers. “What we do in this moment in time matters. This is government. If it's done well, it saves lives.”

The governor has repeatedly said over the past week that he has no desire for a “bare-bones” budget. Issues like amending bail reform, marijuana legalization (even though a key sponsor, state Sen. Liz Kreuger, has expressed doubts), gestational surrogacy (coincidentally, Andy Cohen, a leading celebrity supporter of the proposal, has tested positive for the virus), a multibillion-dollar environmental bond and other proposals from his January State of the State address remain on the table. Significant constitutional and budgetary powers give any governor an edge over lawmakers, and Cuomo has demonstrated in past years that he knows how to use them.

But lawmakers have their own plans for the budget, and the fiscal damage of the coronavirus has added urgency to their calls to raise taxes on the wealthy. Cuomo could still get what he wants on Medicaid while also receiving billions of dollars in federal aid. However, even that might not be enough to close the budget gap. A big question is what lawmakers might have to trade away in the give-and-take of budget negotiations in exchange for getting the new taxes they want on the wealthy.