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Originally published June 11, 2010 at 2:44 PM | Page modified June 11, 2010 at 4:46 PM

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Washington state must not bank on federal Medicaid money

Seattle Times editorial | The Washington state Legislature must reset its budget and get along without any more Medicaid bailouts.

LAST week Gov. Chris Gregoire was urging Congress to include extra bailout money for Medicaid, and Sen. Patty Murray was working to provide it. This state's share would be $480 million over the next 12 months. We understand why the governor wants this money. But we believe Congress ought not to grant it, and that the state ought to live without it.

Our position has to do with what we call "the reset." The idea is that the resources available to the whole society have shrunk, and that budgets need to accommodate themselves to the new reality. Families have had to do this. Businesses have had to do it. Now government has to do it.

The $480 million — at the national level, $24 billion — is emergency spending. In an emergency, financial constraints are set aside. Government borrows the money. Maybe it even prints the money. But at some point the emergency ends, and government has to deal with the reality that is.

That time is now.

Always at such a time there is a thought: "Not yet. We really need this. Another $24 billion won't hurt." And if the economy were bouncing back strongly, with new piles of tax money promised a year from now, it might be all right to put one more big charge on the credit card.

But that is not reality. The recovery is slow, and the projected state-level shortfalls are endless. The latest estimate from the state's Office of Financial Management is that the next two-year state budget will start out $3 billion in the hole.

This is the problem the Legislature creates when it implements new spending programs and fills its budget with one-time money, such as this federal Medicaid bailout money. Bailout money is going to go away. It has to. If it does not go away now, because of Murray, it will go away a year from now, and there will be a crisis then. Let's get it over with now.

If this money does not come through — and we think it should not — Gregoire needs to call a special session of the Legislature. Lawmakers should start with her "book one" budget — the one she offered in January, which they added to. They will have to subtract some things — about $480 million in things.

Legislators will not enjoy doing this at a time when most of them are up for re-election, but they should have produced a more responsible budget last session — a budget that did not count on federal money that might or might not materialize.

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