Collins, joined by Senators Jay Rockefeller (D-WV), Ben Nelson (D-DE) and Gordon Smith (R-OR), had offered the "Short-Term Aid to Enhance States' Stability" (STATES) amendment to the 2004 Budget Resolution on Wednesday. The amendment calls for a fiscal relief package of $30 billion, at least half of which would come to the states through increased federal funding of their Medicaid programs. Medicaid was targeted because it is the fastest growing component in state budgets. While state revenues are stagnant or declining, Medicaid costs are increasing at a rate of more than 13 percent a year. Some 1.7 million Americans will lose their health insurance if proposed or adopted state budgets are not reversed.
"Maine and 48 other states have been forced to consider cuts in programs such as Medicaid that provide needed assistance to our most vulnerable men and women," Collins said. The Senate's endorsement of the amendment is a major step toward providing an additional $190 million in federal funding to the State of Maine.
Increasing demands for services coupled with dramatic drops in revenue have left most states with severe fiscal crises. According to the National Governors Association, states are facing a cumulative two-year shortfall of $110.6 billion. Maine alone is facing a projected $1.2 billion budget shortfall over the same period. "Putting money into the hands of the states is a good way to stimulate economic growth. It simply doesn't make sense to lower taxes in Washington, only to increase them in Augusta. We know that if we get this money into the hands of the states, they will spend it on medical care and other needs, which in turn will stimulate our economy," Collins said. Thursday evening, the Senate approved the amendment in an 80 to 19 vote.