spending

[t.a. barnhart]

from an article in the Seattle Times:

Obama wants to spend as much as $200 billion to help states pay for
Medicaid and education. Such efforts can have merit, Orszag testified
a year ago. But he warned that if federal aid to states "merely
provides fiscal relief by paying for spending that would have occurred
anyway," it may provide little or no stimulus.

i'm wondering how much of the money that is raised by the new
insurance plan -- the $600M that is used to gain $1B in federal funds
-- will be "anyway" spending and how much is brand new. it sounds
like the more innovative and direct (to the economy) any spending plan
is, the more likely it is to be approved. or are these matching funds
guaranteed?

[http://seattletimes.nwsource.com/html/businesstechnology/
2008641275_econobama18.html]

[Greg Diamond]

My understanding is that the feds envision using stimulus money to
increase the matching rate for Medicaid/Medicare dollars. So while the
net spending levels would remain the same (fractions would still equal
100, it's just that the federal share would increase), possible cuts
in spending (ala Oregon in 2002/2003) could be staved off.

-Greg