Medicaid assistance cut opens new gaps in 31 US state budgets

California, New Jersey and 29 other U.S. states face new gaps in budgets for the fiscal year that starts July 1, after the U.S. Senate failed to move forward a $16 billion boost in Medicaid assistance. Thirty-one U.S. states included a total of $11.6 billion in their spending plans for the 2011 budget year, data compiled by Bloomberg shows. Senate Republicans wouldn’t support the measure today, after it had been cut from $24 billion, citing concern over adding to the federal deficit, which is forecast to reach $1.6 trillion this fiscal year.

Senate sponsors of legislation that included the Medicaid assistance, H.R. 4213, reduced the level of assistance after failing two times last week to attract the 60 votes needed to end debate and move the bill to a final vote. The Senate fell three short today, at 57-41. Pennsylvania Governor Edward Rendell said in a statement he’s trying to get another vote. California, the most populous U.S. state, counted on $1.7 billion from the Medicaid extension, more than any other state, according to an outline of the budget Governor Arnold Schwarzenegger proposed last month.