Exhibit a in Vice President Al Gore‘s attack against George W. Bush‘s record as governor was the news this summer that the state’s Medicaid budget for children’s health faces a shortfall of $400 million. Democrats (including Houston state senator Mario Gallegos) wasted no time in claiming that Bush shortchanged needy children so he’d have enough money to bankroll tax cuts he had promised during his 1998 campaign. The issue is a perfect fit for the presidential race, since Gore can say that Bush’s promised federal tax cuts will do to the nation’s Medicaid budget what his Texas tax cuts did to the state’s.

Did Bush’s insistence on tax cuts trump his compassion for poor children needing health care? Four crucial questions help separate the scoop from the spin:

Did the governor’s pals in the Legislature jiggle the numbers intentionally to cheat the Medicaid budget? No. Determining the funding level is a straightforward exercise handled by the legislative budget staff, which looked at the program’s history and plugged in numbers that predicted a sizable decline in the number of people on the Medicaid rolls (continuing the pattern of recent years as a result of welfare reforms). The analysts were actually pretty close: They predicted a 3 percent decline in Medicaid rolls; the actual decline was 1.7 percent. The difference accounts for around two thirds of the shortfall. The remainder is attributable to the soaring cost of prescription drugs, a nationwide problem. Point for Bush.

Will fewer children be covered by Medicaid because of the shortfall? No. In fact, 47,000 more children than expected will be served by Medicaid. One reason is that state human-services officials sent 868,000 letters to families going off welfare and to most welfare recipients informing them that their kids might still qualify for help under Medicaid. The extra coverage means healthier children for Texas. Point for Bush.

If Medicaid runs out of money, do the kids who rely on it lose their health coverage? No. While lawmakers underestimated the money needed for Medicaid, they will be bailed out if comptroller Carole Keeton Rylander‘s estimate that the state will collect an extra $1.4 billion during this budget session proves to be correct. The 2001 Legislature will use some of that extra money to fund the Medicaid shortfall. This too is routine; the Legislature regularly starts each session with the passage of an emergency spending bill to adjust for previous miscalculations or manipulations. Since 1990, the Legislature has passed emergency spending bills every session, ranging from a low of $3.5 million in 1993 to a high of $1.078 billion in 1995. Point for Bush.

So does that mean the Legislature didn’t play politics in crafting the budget? Not exactly. During the waning hours of the session, legislative budget writers decided to delay the final monthly Medicaid payment of nearly $100 million until the next budget cycle, which starts in fall 2001. This is a budget-balancing trick used in tight economic times. But in the last session, lawmakers had a $6 billion budget surplus to work with. Nobody can give a good explanation of why the Legislature chose to delay paying the $100 million. It’s a fair assumption that Bush’s promised $2 billion in tax cuts sent budget writers scrambling for ways to cut spending. Point for Gore.

The bottom line: The damage is much less than Gore claims, and so is the level of skulduggery, but Gore does have an argument.

The current dispute is not the first time a Medicaid shortfall has become a prominent campaign theme. In 1990 Congress expanded Medicaid to cover more people, draining the money the state had set aside for the program. In the lieutenant governor’s race that year, comptroller Bob Bullock blamed his opponent, Republican Rob Mosbacher, who was the chairman of the board for the state agency in charge of Medicaid, for the $300 million shortfall—and won the race.

Mosbacher said recently that when he learned of Gore’s charges, “I understood exactly what was going on. I felt sorry that George was going through what he did, but then, Al Gore on his best day isn’t as good as Bob Bullock at spinning a story.”