WASHINGTON — Seeking to break the stalemate over the federal budget, the nation's governors proposed Tuesday that they be given much broader authority to run Medicaid as they see fit, while still preserving a guarantee of health care benefits for the needy.
The governors also compromised on a bipartisan plan to overhaul welfare, then called on President Clinton and Congress to adopt their new accords as the basis of a deal on all the issues--including tax cuts and Medicare savings--that have brought budget talks between the White House and Republicans to a standstill.
The Clinton administration and GOP leaders responded by immediately expressing interest in the governors' broad if somewhat vague prescriptions. Clinton told the governors: "This is a huge step in the right direction." And House Speaker Newt Gingrich (R-Ga.) announced that Congress would conduct prompt hearings on the proposals.
Yet lawmakers were divided over whether the governors had come up with ingredients that would somehow transform the bogged-down budget process.
Under the governors' Medicaid blueprint, "the nation's most vulnerable populations" would continue to receive coverage. These include pregnant women and children up to age 12 whose families are under the poverty line, or, in some cases, somewhat above it.
At the same time, states would be given new flexibility in a host of areas, some potentially controversial, such as setting disability requirements for Medicaid coverage.
The welfare proposal is highlighted by $4 billion extra for child-care funding to help parents comply with work rules and an extra $1 billion to help states hit by recession.
While the governors' proposals almost certainly would not be adopted without extensive changes, their agreements are viewed as significant because they were arrived at through bipartisan negotiation at a time when Republicans and Democrats in Washington remain stubbornly apart.
The Medicaid and welfare proposals, which were approved unanimously, also have weight because the governors essentially run those programs in their states. Medicaid and welfare reform have been at the center of the unyielding philosophical dispute that has stalled the fiscal 1996 budget more than four months beyond the Oct. 1 date it was to take effect.
"I believe this will have a profound impact on the budget process," said Utah Republican Gov. Mike Leavitt. He said that the governors had succeeded in creating both "a keystone and neutral ground" to help the White House and Congress move ahead in their tortured budget talks.
