Social Security, Medicare, and Medicaid expenditures are funded by more permanent Congressional appropriations and so are considered mandatory spending.

In New York City, where Medicaid expenditures are over $1 billion, residents face a slew of increased costs, from new sales and property taxes to subway fare and toll increases.

"Medicaid reform is important," Mr. Duarte said, "but we need to have some protection against very rapid growth in Medicaid expenditures for the mandatory coverage group."

"It's now the place where we spend more money in the budget than anything else," he said, "and Medicaid expenditures are creating serious problems in every community in the state."

New York City's share of payments, based on Medicaid expenditures, would be 60 percent, or more than $12 billion.

The largest increase has been in the form of Medicaid expenditures (Leonard and Walder, Page 47-54).

Johnson supports cutting federal Medicare and Medicaid expenditures by 43% by ending the federal, top-down bureaucracy that controls these programs, including all strings and mandates to states.

Thus, if the state cut $1.1 billion, it would lead to an overall reduction in Medicaid expenditures of nearly $3 billion.

In a preamble to the rules, the Administration said the new restrictions "will in no way preclude states from increasing their share of Medicaid expenditure from other sources."

That figure represents 15 percent of the total Medicare and Medicaid expenditures, although some analysts say the number is as high as $94 billion.