This week, buried under the current Congressional tussle over war spending, a fight over the future of Medicaid has quietly been percolating. Last fall, the Bush administration attempted an end-run around Congressional authority, proposing a set of unilateral changes in Medicaid rules that would cut federal payments. All told, the newly imposed rules would shift some $15 billion in federal costs to the states, reducing and in some cases cutting off rehabilitative services for the disabled, low-income children and assistance to hospitals and nursing homes.

Opposition from all 50 state governors was vociferous and fast-coming. This April in an an overwhelming 349-62 vote, the House passed a moratorium blocking the regulations, while this week, the House-passed war supplemental again endorsed a measure to scrap the rules. But as Ryan Grim reports, it now looks like Senate Republicans may be lining up behind the White House to support the cuts anyway.

Unlike the federal government, states–like the average American family–have to balance their spending. Currently, given that some 25 states already face budget shortfalls, if federal backing is cut, support for those services simply isn’t there. And if the GOP decides to fall in line over the rules, come fall, they’ll find themselves in the untenable position of trying to defend the indefensible: supporting another $183 billion for occupation overseas while simultaneously cutting millions in their home state for the sick and poor.