State and local officials in Maine are lining up to support a proposal in the federal jobs bill that boosts Medicaid. The program, funded by both the state and federal government, provides health insurance to the income-eligible. The groups say that more federal dollars for Medicaid will help shore up the state budget and protect other areas, such as education, from further cuts.

"The two places where Augusta cuts are education and health and human services," says Kathy Garrard, a member of the Gorham School Board Committee. "If there is more money coming in to the health and human services budget, hopefully that means that that's going to ease what's happening on the education side and one would think it would go the other way as well."

Schools could also directly benefit from more Medicaid funding. Schools receive Medicaid for students receiving special education, for example.

Garrard says extra funding for the program could help save about 11 teaching jobs in the school system that are on the chopping block.

"If you take our situation, multiply it by school districts all over Maine, the current economic crisis really is hitting school districts hard," she says. "It's hitting education hard and it's ultimately hitting our kids and the future of this state hard."

The federal government matches the money states spend on Medicaid, and Congress last year decided to raise the match, using stimulus funds. Maine's Medicaid program, called MaineCare, was allocated an extra $470 million.

But the enhanced Medicaid funding runs out at the end of the year. Groups such as the Maine Center for Economic Policy and the American Federation of State, County and Municipal Employees, or AFSCME, are asking Congress to extend the program for at least another six months.

"This enhanced match right now means that for every dollar the state spends on MaineCare, the federal government puts in $3," says Ana Hicks, of the Maine Equal Justice Project, which provide legal aid to low-income Mainers. "This has made a huge difference for the overall health of our economy and our people."

Hicks says the money has allowed the state to provide coverage to workers whose employers have cut back on health benefits because of the economy. "In Maine, we are number six in the country in covering the uninsured and this really has been partly due to MaineCare filling the gap. So without the stimulus package, we would have clearly lost ground."

But fiscal conservatives in Maine say this is not reason enough for the Senate to continue funding Medicaid at an enhanced level.

"Although this might be a short-term gain for the state, long-term this deficit-spending means bad things for our state and our federal economy," says Tarren Bragdon, who heads the Maine Heritage Policy Center. Bragdon points out that this year's federal deficit will hit about $1.5 trillion, breaking last year's record.

Bragdon says the state should not become dependent on federal funds. "I think what we need to do is look at what Gov. Baldacci laid out, which was making some cut-back savings and making state government more efficient so that the state could balance its books."

The jobs bill is on the Senate floor and its supporters are urging Maine's two moderate Republicans, Senators Olympia Snowe and Susan Collins to move the bill forward for a vote.

Both senators supported increasing Medicaid dollars to states in last year's stimulus bill. But Collins' office says she has not decided how she will vote on the jobs bill overall. Senator Snowe's office did not respond by airtime.