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Story Archives: Lobbyists to the rescue
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Lobbyists to the rescue
 When the federal government dumped in excess of $100 billion into the Gulf Coast region following hurricanes Katrina and Rita in 2005, you would have been hard-pressed to find anyone who would predict the government's generosity would create a possible budgetary meltdown in Louisiana in 2010.
Yet, that's exactly what could occur in the new fiscal year unless the Congress approves a waiver so Louisiana won't be obligated to pay an additional $700 million toward health care costs for the poor, or $700 million more toward the state's Medicaid program.
Let's take a closer look for a moment.
Thanks to the boat load of federal appropriations Louisiana received during and following the '05 storms, jobs and paychecks that accompanied them were not hard to find. Just about anyone who was willing to get their hands dirty could find work cleaning up the mess Katrina and Rita left in their wake. Contractors, engineers and the like made money, too. In some instances, small fortunes were made and subsequently lost as well. All of it was made possible because Uncle Sam doled out money like it grew on trees.
Accordingly, average annual incomes among residents rose at a pretty significant clip. We felt it. Remember the robust economic activity in southern Louisiana following the storms?
However, when the federal government calculates how much money it should turn over to states for their Medicaid programs, expenditures from the feds are determined by how poor a state's residents are based upon their annual average income. In other words, if the annual average income among a state's residents is higher than it was in prior years, the feds appropriate less money to the state in question to care for its poor in subsequent years.
That's the situation we're witnessing in Louisiana today—the feds intend to give the state less money for its Medicaid program next year because of the state's performance on the economic front following Katrina and Rita. Also, Louisiana's economy in general performed better than the national average earlier this decade, which contributed—to some degree—to the spike in annual average incomes here.
It's worth noting that the anticipated cut in Medicaid monies for Louisiana will take place about the same time Louisiana's share of federal stimulus money will run its course. The stimulus money will be gone beginning Jan. 1, 2011. The anticipated Medicaid cut will be felt when the new fiscal year arrives, beginning July 1, 2010.
Lump it all together, along with a decline in sales and income tax collections thanks to a lackluster economy, and we're staring at a loaded gun, or an anticipated $1 billion shortfall in the 2010-2011 fiscal year. State Treasurer John Kennedy says budgetary shortfalls will total some $2 billion-$3 billion over the next couple of years.
It's not a pretty picture.
We being Louisianians, though, means we get creative anytime it would appear there won't be enough money in the state's kitty to keep the natives happy.
Who's going to fix it? Or, who's going to mend the state's ills?
Well, Uncle Sam, of course, who is expected to come to the rescue at the prodding of the state's congressional delegation, led by the senior senator, Mary Landrieu. After all, Landrieu is a Democrat. The Congress is controlled by the Democratic Party. The president of the United States is a Democrat. Thus, it would seem plausible our senior senator could convince the Democratic leadership in the Congress and the president to go along with a $700 million fix for Louisiana.
Not so fast.
Last week, we learned the state hired the powerful Washington, D.C., lobbying firm Patton Boggs to assist with the Medicaid funding crisis. Former U.S. Sen. John Breaux, a high-dollar lobbyist these days, was retained, too.
Patton Boggs and Breaux will be paid some $200,000 by health care providers that rely on Medicaid monies to operate. No state funding will be appropriated to pay the aforementioned hired guns.
Whether Breaux's hiring represents an attempt to resurrect his political career is another topic to discuss in another offering, but his presence and Patton Boggs' presence in lobbying the federal government on behalf of the state certainly raises a question.
Why can't Landrieu as well as the congressional delegation as a whole handle the job the voters hired them to do?
That's a legitimate question the state's congressional delegation should answer since the state's immediate fiscal future is in their hands.
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