Landrieu: Funding cuts call rushed

WASHINGTON — The decision to axe federal health care funds for Louisiana’s public hospitals and the poor occurred over a short period of time and was originally proposed as a nearly $1.2 billion cut by U.S. House Republican leaders, according to congressional members and staffers.

The idea originated from the U.S. House Energy and Commerce committee and was seized by House leadership as a means to help pay for the $28 billion transportation funding bill signed into law this month. The bill also included the RESTORE Act to direct billions of dollars in BP oil fine money to Louisiana and the other Gulf Coast states.

“This was a last minute and very disturbing and detrimental action taken that is going to seriously harm the budget that the governor and the legislators have already agreed to,” said U.S. Sen. Mary Landrieu, D-La., who had acquired the Medicaid funds for the state in the first place. “It’s very, very serious.”

Jane Campbell, Landrieu’s chief of staff, said they first learned of Louisiana being targeted on June 23, from the staff of U.S. Senate Finance Chairman Max Baucus, D-Mont., who was leading the Senate side of negotiations.

The issue was finalized June 27, two days before the vote.

Campbell said the late-in-the-game proposal to target Louisiana originally would have cut all of the state’s disaster fund dollars for the federal matching share of Medicaid dollars, called FMAP, to Louisiana over two years. That amount totaled nearly $1.2 billion.

Starting early June 24, Landrieu and Campbell worked, they said, to press Gov. Bobby Jindal — through Jindal’s commissioner of administration, Paul Rainwater — and Louisiana’s Republican delegation in the House to intervene with the Republican House leadership. Rainwater said “he would get right on it,” Campbell said. She counted 15 conversations she had with Rainwater from Sunday morning through Wednesday evening.

“There was a great deal of flurry,” she said.

When the Senate refused to go along with the $1.1 billion FMAP cut, the House leadership then nearly sliced it in half to make it a $650 million cut over two years and they refused to budge further, Campbell said.

“The House leadership was insisting on it but cut it to half,” Campbell said. “It was never on the table until the House Republican leadership put it on the table and they refused to take it off.”

For the fiscal year that began July 1, Louisiana lost nearly $860 million in funds when the state match is included.

U.S. House Energy and Commerce Chairman Fred Upton, R-Mich., did not respond to interview requests.

U.S. Reps. Bill Cassidy, R-Baton Rouge, and Steve Scalise, R-Jefferson, are the two members of the Louisiana delegation on the U.S. House Energy and Commerce Committee but they said they did not know about the FMAP situation until it was already in the proposal.

Both said the Senate leadership, including U.S. Senate Majority Leader Harry Reid, D-Nev., shared in the blame because they ultimately agreed to the $651 million FMAP cut as well. Cassidy said Reid could have killed it.

Although the plan may have originated from the Energy and Commerce Committee, Scalise said, all the money committees in the House and Senate were asked to come up with potential cuts.

“A lot of things were put on the table by a lot of committees,” Scalise said. “For whatever reason, FMAP became one of those things.

“We talked to the Speaker’s office a number of times in those last few days,” he added. “Unfortunately, we weren’t successful there.”

Cassidy said that a combined effort at least prevented the cuts from being worse.

“When I spoke to people they said, ‘You’re lucky we’re not taking the whole $1.2 billion,’ ” said Cassidy, who refused to name individuals. “I bitterly complained. I said our state budget was starting in three days, et cetera.”

Jindal refused repeated interview requests over a two-week period and would not answer questions about whether he ever intervened to reach out to U.S. House Speaker John Boehner, R-Ohio, or House Majority Leader Eric Cantor, R-Va. Jindal’s spokesman, Kyle Plotkin, said the administration was in contact with Louisiana congressmen.

Landrieu said she pushed Rainwater to get Jindal to intervene and that Rainwater told her he would try.

“I felt strongly that the governor should make a personal call,” Landrieu said. “That, at this point, the negotiations had reached such a very high level that the only two people that could be called would be Eric Cantor or Speaker Boehner and that the most appropriate person to make that call would be the governor. But I don’t know if that call was ever made.”

U.S. Sen. David Vitter, R-La., was the only member of the Louisiana delegation on the transportation conference committee. But, because the FMAP issue originated from the House, Landrieu said Vitter did not know about it until she informed him.

The FMAP dispute dates back to population changes in Louisiana after hurricanes Katrina and Rita in 2005.

In early 2009, the Jindal administration approached the Louisiana congressional delegation with concerns that the state’s per capita income levels over a three-year period — a chief determiner of the award — were artificially high because of dollars paid out for rebuilding as part of the hurricane recovery. The state result was a dramatic drop in federal Medicaid dollars as a result.

Last year, Landrieu succeeded in amending a fix into President Barack Obama’s health care legislation that helped disaster-affected states with FMAP cushions. Critics from called the deal the “Louisiana purchase.”

However, there was a drafting error in the legislation’s math calculations that directed more FMAP funds to Louisiana than intended. The error was not pointed out until Nov. 30.

The problem, though, was exacerbated because the federal government ruled earlier in November that Hurricane Gustav in 2008 also qualified the state for FMAP disaster funds. The end result, because of the drafting error, would have sent $4.1 billion to Louisiana through 2015.

In February, the drafting error was fixed through an agreement in a payroll tax bill. The compromise eliminated the extra funds for Louisiana in the future but would have maintained the funds for the current fiscal year that runs through June 30, 2013.