Harrisburg waits for Washington to act on federal aid for Pa.

HARRISBURG - Gov. Rendell and top legislative leaders hope Congress begins voting this week on whether to approve hundreds of millions of dollars in federal aid that the state is relying on to balance its budget.

The U.S. Senate could cast a final vote as early as Wednesday on whether to send federal Medicaid dollars to the states. The House would weigh in after it returns from its recess in September.

Pennsylvania had been banking on receiving $850 million, but state Senate Majority Leader Dominic Pileggi (R., Delaware) said Monday he expected the state to get about 70 percent of that, or just shy of $600 million.

Rendell spokesman Gary Tuma did not dispute the $600 million figure and added that Rendell was "optimistic" the money would be approved.

"The governor thinks the chances look better now than they have been over the last few weeks," Tuma said.

The money is to cover the state's Medicaid expenditures - health coverage for Pennsylvanians living in poverty, whose ranks have been swelled by the recession.

In July, Rendell and the legislature approved a $28 billion budget for the new fiscal year that relied on the federal government's kicking in the $850 million.

During budget negotiations, Rendell said he was confident Congress would approve the money. But soon after, hopes were dashed when Congress scrapped a bill that would have allocated $1.4 billion to help states balance their budgets and pay federally mandated Medicaid obligations.

Losing that money entirely, Rendell said, would be "Armageddon." He estimated that as many as 20,000 layoffs - not only state employees but also teachers and municipal workers whose payrolls rely in part on state money - would result. There would also be cuts in state aid for drug, alcohol, and mental-health counseling; domestic-abuse shelters; and myriad other social services.

On Monday, Pileggi said receiving even 70 percent of the expected $850 million would necessitate making painful cuts.

"It's a smaller problem than $850 [million], but it's still a problem," he said.

Pileggi and other legislative leaders had been scheduled to sit down with Rendell on Monday to draw up a contingency plan in case the $850 million did not materialize.

Instead, with the Senate poised to act on the funding, negotiators in Harrisburg contented themselves with a brief conference call and said they would meet next week to craft a Plan B.

Pileggi said that if the state ends up getting roughly $600 million from Washington rather than the hoped-for $850 million, one area likely to be affected is Rendell's signature issue: funding for basic education in public schools. That aid had been increased in this year's budget.

Tuma, the governor's spokesman, said there was "a whole range of options" for making the necessary cuts.

"The governor has said that all areas of the budget where spending is not mandated would be vulnerable, and he included education in that," Tuma said. "But we'll look at different levels of cuts in many different areas."