Senators, White House At Odds Over Aid To Katrina Victims

WASHINGTON — In a sign of growing disagreement among Republicans over Hurricane Katrina aid, a leading GOP senator Wednesday threatened to stall budget legislation until the Senate agrees to expand federal Medicaid health coverage for storm victims.

Senate Finance Chairman Chuck Grassley, R-Iowa, delivered the warning after a handful of fellow Republicans, with backing from the Bush administration, blocked a measure that he co-authored with Sen. Max Baucus, a Montana Democrat.

"It's a temporary piece of legislation affecting the health needs of people" in the Gulf region, Grassley said of the proposal, which would extend federal Medicaid coverage for five months to evacuees forced to relocate to other states.

"It's just ludicrous that this bill can't move," Grassley said during a hearing to consider ways to rebuild in the aftermath of the catastrophic hurricane.

In a blunt warning that is highly unusual for a Republican senator to give the Republican administration, Grassley added, "I suggest that people at the White House need to know that the chances of our getting a [budget] reconciliation bill moving out of my committee are very difficult if we don't get this bill behind us," Grassley said.

The Finance Committee has jurisdiction over spending bills, including a measure sought by the White House to reduce the overall federal cost of Medicaid.

The Grassley-Baucus health care package for Katrina victims would expand Medicaid, a program designed for the poor, to those above the poverty level. It would also grant fiscal relief to the hard-hit states of Louisiana, Mississippi, and parts of Alabama by paying 100 percent of Medicaid costs that normally are shared by the states. The proposal has been estimated to cost $8.7 billion over five years.

Sen. Trent Lott, a Mississippi Republican, also defied his own party's opposition to the aid package, which almost passed on the Senate floor last week before a few of budget-minded Republicans led by Sen. John Sununu of New Hampshire objected.

Lott said he was optimistic that the bill would pass overwhelmingly because of its broad support in both parties.

"We can work with everybody—including the administration or against them—and I'm prepared to go either way," he said.

A spokesman for the Centers for Medicare and Medicaid Services, which oversees the federal health programs, said Wednesday that the Bush administration already has enough authority to help Katrina victims by issuing waivers to give Medicaid greater flexibility.

"We're continuing to work directly with the states to make sure that evacuees get the health care that they need whether those evacuees fit into traditional Medicaid models (for eligibility) or not," said spokesman Gary Karr.

He said that the Grassley-Baucus bill would also require the government to set up a new payment system, even though its provisions would be only temporary.

At the Senate Finance hearing Wednesday, Gov. Kathleen Blanco of Louisiana, a Democrat, urged passage of the Grassley-Baucus bill as written.

Gov. Haley Barbour of Mississippi, a Republican, urged passage of the provision granting 100 percent federal funding for Medicaid to his state and several others through 2006. However, he told the panel he was opposed to expanding eligibility for Medicaid.