Big win for Reid on teacher money
With key support from Maine Republicans, a $26.1 billion fiscal aid package for states and local governments advanced in the Senate Wednesday after Democrats agreed to offset the spending with major cuts from their own priorities — including food stamps for the poor.
The back-to-back 61-38 roll calls are a major triumph for Democrats after months of partisan stalemate and breathe new life into hopes that Congress will intercede to avert threatened public school teachers this fall.
This has been a major priority for Education Secretary Arne Duncan and liberals in the House, and Democrats are giving active consideration to Speaker Nancy Pelosi (D-Calif.) calling the House back from its August recess to deal the bill, once it clears the Senate.
The second big piece in the bill, $16.1 billion to help governors pay Medicaid bills next year, is less money than Washington once promised but pivotal still for dozens of states, which banked on the money in their 2011 budgets and would otherwise face a new round of layoffs.
Sen. Susan Collins (R-Maine), courted by the White House and influential in shaping the Medicaid funding, was pivotal to the Democratic win, and had the backing of her Republican colleague, Sen. Olympia Snowe, who also joined in support after weeks of feuding with Senate Majority Leader Harry Reid (D-Nev.)
But a big part of the victory was built on Reid himself and his willingness to embrace new spending cuts to hold his party together and take away the “debt and deficit” arguments from the Republican leadership.
Wednesday’s votes illustrated this strategy as Reid first won 61-38 on a cloture motion to limit debate, and then came back minutes later with an identical margin, waiving a budget challenge raised by Sen. Judd Gregg (R-N.H.)
Indeed, new Congressional Budget Office estimates released Tuesday night show the revised bill would more than pay for itself, even reducing future deficits by $1.37 billion over the next decade. And the depth of the reduction of the targets could become an issue for the House—and Pelosi most directly.
Food stamp recipients would face an $11.9 billion rollback of added benefits first approved as part of the giant recovery bill last year. That translates into a reduction of about $47 a month for a family of three beginning in April 2014 or $516 over the first 12 months. And among budget experts, some believe that CBO’s $11.9 billion estimate understates the real savings.
At the same time, Reid risks the speaker’s wrath on the other side of the Capitol by rescinding $1.5 billion from an innovative technology program favored by Pelosi to promote renewable energy investments.
To the speaker’s chagrin, the same Energy Department account was previously tapped to pay for the “cash-for-clunker” auto sales promotion program. And with the $1.5 billion rescission now, it’s left with less than half of the $6 billion investment that was initially promised.
When POLITICO asked the speaker’s office about the proposed reductions Tuesday, her aides took a “wait-and-see” approach, assuming Reid would not prevail. Now with the bill gathering steam toward Senate passage, the same questions will become very real.