	Introduction

Each year, the President is required to submit a comprehensive federal budget proposal to Congress no later than the first Monday in February. The House and Senate Budget Committees also develop their respective budget resolutions after reviewing the President's budget, the views of other committees, and information from CBO. Although not binding, the budget resolution provides a framework for subsequent legislative action. This report provides information on Medicaid and the State Children's Health Insurance Program (CHIP). It will be updated to reflect relevant legislative activity. The economic conditions that prevailed in January 2009 helped to shape the President's FY2010 budget proposal, as well as major legislation passed by Congress that was aimed at underpinning weak economic segments, boosting overall spending, and helping to prevent further economic deterioration. In the longer-term, the Obama Administration envisions Medicaid cost savings to help fund a $635 billion Health Reform Reserve Fund. With passage of two major health care bills, ARRA and CHIPRA, some budget initiatives (both legislative and administrative) may not be necessary. In the President's FY2010 budget, it was estimated that this proposal would reduce federal Medicaid expenditures by $150 million in FY2010 and $1.3 billion over the period from FY2010 to FY2014. This proposal would eliminate the MIF and reallocate these savings to support the the President's broader health care reform initiative. The House and Senate Budget Committees produced their versions of the budget resolution which incorporated most of the President's budget proposals as submitted in President Obama's budget outline of February 26, 2009. The two houses adopted their respective FY2010 budget resolutions on April 2, 2009. The Senate and House agreed to a Conference Agreement Report on April 29, 2009 ( H.Rept. 13 ). Senate

On March 26, 2009, the Senate Budget Committee reported a budget resolution ( S.Con.Res. House

The House Budget Committee reported a budget resolution ( H.Con.Res. 85 ) on March 25, 2009, which the House passed on April 2, 2009. 111-60 ) to accompany the concurrent budget resolution ( H.Con.Res. Conference Agreement

On March 27, 2009 the Senate and House filed a Conference Agreement Report on the budget resolution ( H.Rept. 13 ). The House budget-neutral reserve fund provisions also included two proposals that could affect Medicaid and CHIP: (1) a deficit-neutral fund for health care reform, and (2) a deficit-neutral fund to improve the well-being of children.
The President is required each year to submit a comprehensive federal budget proposal to Congress before the first Monday in February. The House and Senate Budget Committees then develop their respective budget resolutions. Based on these budget resolutions, House and Senate Appropriations committees reconcile their budget resolutions and file a joint budget agreement. Although not binding, the resolution provides a framework for consideration of the 12 separate appropriations bills that would fund FY2010 federal spending, beginning October 1, 2009.
In presidential transition years, the timeline for the administration to submit a budget proposal is altered. President Obama was inaugurated on January 20, 2009. An outline of the President's first budget was submitted on February 26, 2009. The Obama Administration issued a detailed FY2010 budget appendix May 7, 2009. The remaining budget documents were released May 12, 2009.
President Obama's FY2010 budget outline described five major policy initiatives including economic recovery, health care reform, education, infrastructure improvements, and clean energy. The health care reform and economic recovery initiatives contained provisions that would affect Medicaid and the State Children's Health Insurance Program (CHIP). Some budget proposals would require legislative action, while others could be implemented administratively (e.g., via regulatory changes, program guidance, or other methods). President Obama has indicted that health care reform will be a major goal for his Administration's first year. The President's FY2010 budget reflects this emphasis, as the Medicaid and CHIP initiatives for FY2010 were aimed primarily at reducing expenditures to help fund a broader health care reform initiative. Medicaid savings, in particular, would help to fund a proposed $635 billion Health Reform Reserve Fund, which is to be available for the next 10 years. The total Medicaid and CHIP savings from the President's legislative and administrative proposals were estimated to exceed $1.45 billion in FY2010, $8.8 billion over the period FY2010 to FY2014.
The Senate Budget Committee approved its budget resolution (S.Con.Res. 13) on March 26, 2009. The House Budget Committee approved its budget resolution (H.Con.Res. 85) on March 25, 2009. The House and Senate agreed to their respective budget resolutions April 2, 2009. A joint conference agreement on the budget resolution (S.Con.Res. 13 accompanied by H.Rept. 111-60) was passed in the House and in the Senate on April 29, 2009. Among other provisions, the conference agreement provides for 20 Senate and 14 House deficit-neutral reserve funds, as well as seven Sense of the Congress provisions. The FY2010 Budget Resolution provides for $2,322 billion in revenue and $3,555 billion in expenditures, which would result in a deficit of $1,233 billion.
This report will be updated to reflect relevant legislative activity.