On August 10, 2010, President Obama signed into law a $26 billion state aid package that will help states fund Medicaid. This package will also help states to prevent layoffs of teachers, police, firefighters, and other public workers.
Medicaid is a government run health insurance program that helps people who have very low income to receive needed medical care. The most recent expansion to the Medicaid program was set to expire at the end of 2010. As a result of this new law, $16 billion dollars will be put toward helping states pay their increasing Medicaid costs. This law continues the funding to the Medicaid program for the first six months of 2011. This will have a direct effect on the millions of people who are relying on assistance from the Medicaid program. It will also help states to pay the debt they owe doctors and hospitals, as a result of not having had the budget to pay them for the costs of care they provided people who were using Medicaid.
The remaining $10 billion of this state aid package will be put towards preventing layoffs of more state workers, with an emphasis on saving the jobs of teachers. School will be starting in just a few weeks in most states, and this news directly affects how many teachers will be going back to school this year.
Opponents of this state aid package feel that this is another government bailout program. Some feel that this law caters to teachers unions, implying that it is a handout designed to gain votes for Democratic candidates in the next election. Others were against this law because it will cause an increase in the food stamp program to end at an earlier date than expected. (This increase was a part of the Stimulus Package). The biggest argument against this law has to do with where the funding is coming from. This law places limits on foreign tax credits, and will cost American corporations who are multinational to pay around $1 billion dollars in additional taxes per year.
Image by Adria Richards on Flickr