The Congressional Pig Book, published annually by the Washington, DC-based Citizens Against Government Waste, is supposed to shame the states that are the biggest recipients of pork-barrel spending–and the members of Congress who champion dubious federal outlays. But the Massachusetts congressional delegation, as well as state officials, must have felt a different sort of embarrassment after reading the latest Pig roundup, which came out this winter.
Of the 52 states and territories studied by Citizens Against Government Waste, Massachusetts finished 49th, with a mere $15.56 per resident in federal pork in 2002. Only Illinois, Colorado, and Puerto Rico received fewer federal dollars per capita. This finding came a year after another Washington-based group, the Tax Foundation, reported that the state received only 84 cents in federal aid for every dollar in taxes Massachusetts sent to Washington in 2000.
That kind of exchange is a raw deal for a state facing a budget deficit of $3 billion going into fiscal 2004, so Gov. Mitt Romney is trying to jack up the federal spending that goes to Massachusetts. But at least 36 states are facing budget shortfalls for next year, according to the National Conference of State Legislatures. And the Bay State’s projected 13 percent gap doesn’t come close to those facing California (30 percent) and New York (24 percent); 10 other states have budget problems that exceed ours. So far, Washington has turned a deaf ear to calls for handouts.
Democrats on Capitol Hill have proposed bailout packages for the states as large as $75 billion, but many leaders of the GOP majority in both houses of Congress say state deficits are the result of fiscal imprudence. Advocates for the states are, to a certain extent, divided themselves. The National Conference of State Legislatures is pushing for fiscal aid, but the American Legislative Exchange Council, a rival group that represents conservative state lawmakers, argues that states went too far in expanding their budgets during the rah-rah days of the 1990s. What the states need now is a dose of austerity, the council says. “Raising taxes or clamoring for a federal bailout is not the answer,” says council policy director Michael Flynn. Meanwhile, the National Governors Association–often a powerful representative for state governments –is paralyzed by party divisions.
Still, there’s good reason for states to go to the nation’s capital with hat in hand. Their biggest spending problem is Medicaid, the health care program for the poor, which has been hit hard by spiraling prescription drug and long-term care costs. Washington sets the program’s requirements but provides only partial funding for it. Currently, Massachusetts and the federal government split Medicaid’s cost down the middle, but states with lower per-capita incomes–such as Mississippi–receive substantially greater federal reimbursement. During last year’s gubernatorial campaign, Romney argued that the feds were shortchanging the Bay State’s Medicaid program (also known as MassHealth), which accounts for $6 billion of the state’s $23 billion budget, and that Massachusetts could boost revenues by $1.7 billion per year by convincing Congress to increase its contribution.
Unfortunately, partisan divisions make the prospect of any change in federal Medicaid funding remote. Republican governors, led by Jeb Bush of Florida, John Rowland of Connecticut, and Bill Owens of Colorado, have pushed a complete program overhaul, arguing that Medicaid’s continuing double-digit cost increases are unsustainable. They support President Bush’s plan to allow states more flexibility to cut off certain recipients –typically the working poor–or reduce services. Democrats, including the Massachusetts congressional delegation, oppose that plan. They support an increase in federal matching funds rather than a broader reform.
Meanwhile, the Bush administration refuses to touch the funding formulas, notwithstanding Romney’s call for a change during his campaign. Legislation to implement an across-the-board 1.5 percent increase in federal contributions, introduced in the Senate last year, stalled because of White House opposition.
On top of that, Massachusetts is in a particularly poor position to get more gravy out of Washington. For one thing, some in the state’s all-Democratic congressional delegation are none too eager to work closely with the new Republican governor. Hunter Ridgway, chief of staff to US Rep. John Olver, who sits on the House Appropriations Committee, says that the congressman is more interested in hearing from his own party back home. “My boss is more likely to side with whatever the Democrats in the [Massachusetts] House and Senate come up with,” he says.
Romney probably couldn’t count on the state’s congressional delegation for much anyway. Democrats in the US House are almost completely shut out of decision-making because that chamber’s rules give near-total control to the majority party. In the Senate, where the rules give the minority more power, liberal stalwarts John Kerry and Ted Kennedy are effective in the role of spoiler, chipping away at the Republican agenda. But they are in no position to win special treatment from GOP Majority Leader Bill Frist of Tennessee, particularly as Kerry gears up for a presidential run.
Romney is charging ahead nonetheless. Among his first hires was Cindy Gillespie, a former congressional staffer and Washington attorney, to be his chief of legislative and intergovernmental affairs. Romney met Gillespie in Salt Lake City when he was running the 2002 Winter Olympics–and she was winning copious federal dollars to support the games. She knows that she’s got a tough job on her hands.
“The Washington office exists for one reason: to increase the amount of federal funding coming back to the state,” says Gillespie, who oversees federal-state relations from Boston and is considered one of Romney’s closest aides. Unfortunately, she admits, “It’s a very difficult environment because no one has any money, including the federal government.”
Running the Washington office is Frank Micciche, 31, a Massachusetts native and 2001 graduate of Harvard’s Kennedy School who most recently burned shoe leather as a lobbyist for Michigan Gov. John Engler. Micciche, who will focus on health care issues in DC, worked previously on Beacon Hill as legislative director to Fran Marini, then the Republican leader in the House.
In February, Tom Lawrence joined the Washington team. A former staffer for the National Governors Association, Lawrence’s portfolio includes environmental and transportation issues. Gillespie said Romney would also bring in outside lobbying firms on an as-needed basis.
It’s a solid crew, but one that’s not likely to fulfill Romney’s pledge of higher Medicaid reimbursements. Indeed, his Washington team has given up on that as a goal, at least for now. But Gillespie says the state may still be able to take advantage of Medicaid waivers that Bush is granting to allow states to cut costs more easily.
Another possibility for relief is Bush’s plan to add a prescription drug benefit to Medicare, the health care program for the elderly. If that plan makes it through Congress, the state would save the funds now going to seniors who get their medications covered through Medicaid. But Democrats in Washington are jousting with the administration over the details. Bush’s plan requires seniors who want the drug benefit to leave the traditional Medicare fee-for-service program and join a managed care plan. Democrats want to preserve the more expensive fee-for-service program and add the drug benefit on top.
Gillespie notes that Medicaid isn’t the only source of federal dollars for Massachusetts. There’s reauthorization of the federal highway and mass transit legislation that will take place this year. On that, the Romney team will be looking for help from third-term US Rep. Michael Capuano. He sits on the House Transportation Committee, which will write the bill, and it’s a body that has worked on a bipartisan basis in the past. Then there’s homeland security, a new responsibility all the states are counting on Washington to pay for. Gillespie says the state is in a good position to win new security funds as Boston prepares to host the 2004 Democratic National Convention. She hopes that Romney’s friendship with President Bush, plus the Massachusetts roots of the White House chief of staff, Andy Card, will also yield dividends.
But with the federal government facing its own budget problems, Ridgway warns that Washington is just as likely to cut federal funding to the states as it is to increase it. Among the programs that could be on the chopping block: affordable housing, the low-income heating program, and Amtrak, all critical to Massachusetts.
Ultimately, the key to success in getting federal help to Massachusetts, says Gillespie, will be having all the states speak with one voice. “We are hopeful that given the [fiscal] problems all the states are having, we’ll come together and it’ll generate some seriousness in Washington.” As of yet, however, that hasn’t happened.
Shawn Zeller is assistant editor of The National Journal.