HARRISBURG — A new proposal by President Obama to boost Medicaid payments to states next year could help Pennsylvania deal with another looming budget shortfall.

A spokesman for Gov. Ed Rendell said Tuesday that the president's just-released budget would mean another $850 million for Pennsylvania.

The proposal still needs congressional approval.

Rendell will present his state budget next Tuesday for the fiscal year that starts July 1.

As it stands now, the Rendell administration is cutting spending to help offset a projected $450 million shortfall in the current fiscal year.

Based on that number, Rendell spokesman Gary Tuma says the state could be facing a $900 million budget hole if spending and revenues are identical next year.