Finally, there may be some good news for Pennsylvania's budget woes. As we've written (many) times before, the state is facing an $850 million budget shortfall if the federal government doesn't extend higher funding for Medicaid. Gov. Rendell has repeatedly warned that he'll have to layoff 20,000 state workers if the money doesn't materialize.

It hasn't been looking good. The biggest problem up to this point is that there wasn't even a legislative vehicle for the funding -- no specific piece of legislation for supporters of increased funding, like the National Governors Association and the U.S. Conference of Mayors, to rally around. That appears to have changed. An amendment to legislation pending before the U.S. Senate would provide about $16 billion in funding.

The amendment includes $10 billion in funding for teachers' jobs and $16.1 billion in funding for the Federal Medical Assistance Percentages, or FMAP, program, which provides Medicaid funding to states. For offsets, it closes foreign tax credit loopholes to raise $9 billion; it also cuts $2 billion from Medicaid drug pricing, $8.4 billion in rescissions and $6.7 billion from the Supplemental Nutritional Assistance Program, or SNAP, formerly known as food stamps.

As the article points out, it's a bit odd to cut funding for food stamps to pay for Medicaid, since both of those programs are primarily aimed at poor people. However, this is the compromise that Democrats are striking to get support from enough Republicans to break a filibuster.

The Senate is expected to vote on the bill sometime Monday night. Keep checking back here for all the latest developments.

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