GOP feeling heat from states over Labor-HHS bill

While returning power and money to the states is a central part of Republican philosophy, so is balancing the federal budget-and when the two are in conflict, GOP members are split over which one takes precedence. But they will soon have to make that call, because to pass the final spending bill of the year, Labor- HHS, Congress will either have to break the discretionary spending caps or find savings in mandatory programs in the bill.

The savings could come from reclaiming money now block-granted to the states to administer the welfare and Medicaid programs, and freezing the Social Services block grant-ideas the states strongly oppose. The National Governors' Association has written to Labor-HHS Appropriations Subcommittee Chairman John Edward Porter, R-Ill., and Appropriations ranking member David Obey, D- Wis., to express "our adamant and uniform opposition to these unprecedented cuts and to any proposal that would result in such drastic cuts to our most vulnerable citizens."

One of the options under discussion to cover the shortfall in Labor-HHS-now at $15.8 billion below FY99-is recouping some of states' money from their lawsuits against the tobacco firms. Appropriations Committee Chairman Bill Young, R-Fla., said his leadership has not endorsed the idea, but observed the federal government has "provided the governors with large amounts of money, very large amounts" by not claiming a share of their tobacco settlement windfall. "You can't leave any option off the table when you're at the point of being [billions] short of passing a responsible bill," Young said.

Despite some conservatives' resistance to going after the states' tobacco money when Democrats proposed it, Rep. Mark Souder, R-Ind., a key conservative, said he is "willing to look at proposals that have tobacco money in the mix" in order to keep total discretionary spending under the caps.

Rep. Mark Sanford, R-S.C., objected to the idea of taking unobligated welfare block grant money and Medicaid reimbursement money back from the states, calling that "a lead balloon, not a trial balloon." Sanford did say, however, that reclaiming federal money from the states "at least is more straightforward" than declaring money to conduct the decennial census an emergency.

Rep. Paul Ryan, R-Wis., said his "first priority, above all else, is to stop the raid on the Social Security trust fund." To accomplish that goal, Ryan said he would consider tapping some of the states' welfare money, noting, "It's true that [the governors] are saving a lot of money in the states that is federal money." But he conceded that doing so "is going to pit us against our governors."

Rep. Todd Tiahrt, R-Kan., a conservative member of the Appropriations Committee, said, "We have to be creative [to find offsets], but we also have to be logical." Tiahrt said he is not a fan of taking money back from the states, but said, "The governors have had it very good under welfare reform. ... Maybe now is a time for reckoning on savings from welfare reform, and I think that has an element of logic to it."