On Wednesday night, as Speaker Paul Ryan (R-Wis.) and his top lieutenants struggled to pass the disaster aid package — as well as a funding bill to keep the government open — House Majority Whip Steve Scalise reached out to Rep. Nydia Velazquez (D-N.Y.) with an offer: Would Democrats back the disaster supplemental if Republicans added billions in Medicaid funding for Puerto Rico?

At that point, Scalise and other GOP leaders were in a bind. They didn’t know if they could pass the disaster aid bill because Texas and Florida lawmakers wanted more money for their states. Members from those delegations were threatening to bring down legislation to keep the government open, triggering a politically embarrassing shutdown for Republicans since they control the Congress and White House.


In the end, Velazquez, who was born in Puerto Rico and has been working to get more federal funding for the island territory, turned down the offer. That decision has set off fierce partisan finger-pointing, while denying hurricane-wracked Puerto Rico of at least $4.6 billion in extra money to provide Medicaid to poor residents, according to Republicans.

Democrats counter that Republicans should have just put the money in the bill in the first place without all the political maneuvering.

They also hope that Senate Democrats can add more money for Puerto Rico into the package. The Senate will take up the legislation when it returns from the holiday break in January.

There's no dispute Puerto Rico needs the money: Roughly 40 percent of its residents receive Medicaid, the federal medical program for the poor. Puerto Rico receives less in matching funds than mainland states to help cover Medicaid costs and island officials have warned there is a serious problem already, which was only exacerbated by the recent Hurricane Maria.

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Medicaid programs in Puerto Rico may run out money in early 2018 without an infusion of new dollars. The island's governor, Ricardo Rosselló, had asked for $8 billion over five years to help stave off a health crisis.

"The total devastation brought on by these natural disasters has vastly exacerbated the situation and effectively brought the island’s health care system to the brink of collapse," Rosselló said in a recent letter to President Donald Trump.

But Puerto Rican officials and Democrats claim Republicans are ignoring the territory's problems.

The controversy partly originated with the GOP tax bill, which Republicans approved this week and Trump signed into law on Friday.

Velazquez, House Minority Leader Nancy Pelosi (D-N.Y.) and other Democrats were outraged that the highly touted plan included several provisions that could harm Puerto Rico’s economy, especially manufacturing operations there. The Republican tax bill treats Puerto Rico subsidiaries of American companies as if they are located in a foreign country, which Velazquez claims could cost the island 200,000 jobs as it struggles to recover from Maria.

As a government shutdown loomed, Scalise called Velazquez with the Medicaid offer, which included a waiver of any matching contribution for Medicaid funding by the Puerto Rican government for two years. The offer was worth at least $4.6 billion, Republicans said. Some Democrats privately believed Velazquez should have taken the deal.

Scalise said in a statement that he had been working with Jenniffer González-Colón (R), Puerto Rico’s resident commissioner in Congress, to come up with the plan. He criticized Democrats for not accepting it.

“Jenniffer Gonzalez fought hard every step of the way to get as much help for Puerto Rico as possible into this bill, and she was also successful in getting an agreement from Republican leadership to include a full two-year [matching-contribution] waiver for Puerto Rico, but House Democrats rejected that offer in the final hours of negotiations,” Scalise said in a statement. “We were very disappointed in Democrat leadership for turning their backs on Puerto Rico.”

According to Democratic sources, Velazquez discussed the offer with Pelosi and other senior Democrats before turning it down. Pelosi — who was opposed to the disaster supplemental but turned her rank-and-file Democrats free to vote however they wanted on the package — did not tell Velazquez to reject the deal, said the sources. Instead, Pelosi said Velazquez must evaluate the proposal and decide on her own how to vote.

Velazquez countered Scalise’s offer by asking Republicans to eliminate the manufacturing tax provision. She has also pressed GOP leaders about altering the earned income tax credit and child tax credit for Puerto Rican residents.

Democrats complained that the GOP offer was a cynical political ploy. Why didn't GOP leaders just put the additional funds into the bill instead of seeking to buy Democratic votes with it?

A Velazquez aide said Republicans could have included the Medicaid waiver provision for Puerto Rico on their own and decided not to do so.

"While the congresswoman doesn't comment on private conversations, it strains credibility to suggest she decides what Republican leadership puts in Republican spending bills,” said Alex Haurek, Velazquez’s spokesman. "If Republicans wanted additional funding included for Puerto Rico, it would have been."

Pelosi’s office also slammed House Republicans, accusing them of engaging in a “blame game” over Puerto Rico.

“According to this logic, Republicans screwed over their own member [González-Colón] because they couldn’t buy Democratic votes,” said Drew Hammill, Pelosi’s deputy chief of staff. “Republicans are in the majority. They wrote this bill, and to blame Democrats because they chose to leave out a provision their own member begged for is just ludicrous."

Hammill added: “The Republican tax scam causes immense damage to the island, with hundreds of thousands of job losses in Puerto Rico at the worst possible time. At the end of the day, the Republican whip should look in the mirror instead of trying to play some petty blame game.”

González-Colón’s spokeswoman was not available for comment by the time this story published.

The House passed the disaster aid package, 251-169. Sixty-nine Democrats backed the measure, though Velazquez was not one of them.

With Senate Democrats saying they will not accept the House bill as is — they want to add more funding to the package, including possibly for Puerto Rico — final action on the bill will be delayed for weeks.

