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Senate nears vote on plan that could send $1.8 billion to California

WASHINGTON — The Senate could take a key vote as early as Wednesday on a spending plan that would send $1.8 billion to California for increased Medicaid funding, money that Gov. Arnold Schwarzenegger says the state desperately needs to help balance its budget.

If Congress doesn't approve the money, it would be "cruel and counterproductive" and have "devastating consequences," the Republican governor said in a letter to members of the California congressional delegation.

Republican senators are out to block the spending, which is part of a broader plan to send a total of $24 billion to states for a six-month extension of increased Medicaid funding.

After debating the issue since last week, Democratic Senate leaders on Tuesday were trying to round up 60 votes to stop a GOP filibuster. Failure to do so would effectively kill the plan, which was first proposed by President Barack Obama.

California, which already faces a $19 billion deficit, is among a majority of states that already included the money in its budgeting.

"If we don't deliver, we will leave huge holes in state budgets that will be filled with other deep and drastic cuts," Senate Majority Leader Harry Reid of Nevada warned his colleagues.

H. D. Palmer, a spokesman for the California Department of Finance, said that California officials assumed the money was a given.

"It wasn't just us," he said. "A number of states were operating under the assumption that — given the consequences of not doing that — that Congress was going to approve this. So we are not alone."

The House already has voted to reject the plan, which is increasing pressure on the Senate to pass it. That's the only way the measure, which is included in a $140 billion package of tax cut extensions and social spending, could advance to a conference committee and survive. The House passed its version of the larger bill before the Memorial Day recess.

Opponents say the state's headaches shouldn't be an issue for Congress.

"Deficits that are made in California should stay in California," said Republican Rep. Tom McClintock of California's 4th Congressional District.

Losing the $1.8 billion, which equals nearly 10 percent of the overall deficit for California, would force the state to make more cuts. To balance the books, Schwarzenegger already has proposed eliminating the state's welfare-to-work program.

"In the unfortunate event that Congress does not approve this, then we've got to go even deeper than we already have," Palmer said. "And in terms of any easy cuts, they are very much in the rear-view mirror for California. To put it in perspective, we've got to close a $19.1 billion gap in this budget, on the heels of closing a $60 billion budget gap last year."

In Washington, many Republicans say it's time to put the brakes on some spending, with the national debt now at $13 trillion.

Republican Sen. John Thune of South Dakota called the plan "the bailout for states around the country" and said it should be eliminated.

"If you look at the trajectory into the future, we are talking about doubling and tripling that debt, doubling it in five years and tripling it in 10," Thune said.

Seeking to put the debt in perspective, Republican Sen. Jon Kyl of Arizona said that $260 of new debt has been added to each U.S. household for every week since Obama took office in January 2009.

"Every time I return home to Arizona from Washington, my constituents remind me of their frustration with Washington's lack of restraint," Kyl said. "They know the reckless spending and borrowing cannot go on forever."

Schwarzenegger is one of 47 governors who signed a letter urging approval of the aid. In his letter to the California delegation, the governor called it a matter of "great urgency," noting that the state already has made deep cuts in Medicaid, education and social services.

"Simply put, this extension is critical. ... The human impact of requiring us to find another $1.8 billion in spending cuts to replace federal funding that was designed to help states avoid deep cuts to safety net programs during this economic crisis is both cruel and counterproductive," the governor said.

The spending plan has the backing of both of California's Democratic senators, Dianne Feinstein and Barbara Boxer. Boxer said she's supporting the plan "because there is huge bipartisan support in California to protect essential health services."

Reid on Monday filed a motion to stop the Republican filibuster. Under Senate rules, Wednesday is the earliest the Senate could vote, though Reid could delay if he concludes he lacks the 60 votes necessary to advance the plan.