Senate OK $26.1 billion state aid bill to save teachers’ jobs
The Senate on Thursday approved a $26.1 billion state aid bill to save teachers' jobs and extend healthcare for low-income people, but liberal House Democrats may have to swallow hard before accepting some of the offsetting cuts in social programs dear to their hearts.
And some more conservative Democrats are expressing concern about more federal spending even though the bill is fully paid for with offsets because Republicans are making the rising federal deficit a major issue in the fall congressional elections.
Given the potential popular appeal of avoiding teacher lay-offs on the eve of a new school year – and the anguished pleas for help from recession-battered states – House Speaker Nancy Pelosi says she is confident the bill will be approved in her chamber when members return from their August recess next Tuesday.
One main offset approved by the Senate to avoid adding to the deficit is an earlier-than-expected phase out in an enhanced food stamp program that poorer households have been receiving under the 2009 stimulus program. The extra $80 in monthly aid would end in 2014.
Some 40 million Americans now receive food stamps.
In addition to the food stamps change, Pelosi had her own concerns about the Senate decision to cut $1.5 billion in renewable energy loan funds to help cover the costs of the package.
But Senate Majority Leader Harry Reid (D-Nv.) insisted Thursday that the Energy Department would be able to find money for the program elsewhere in its budget.
"This is a huge victory for American families," Sen. Patty Murray (D-Wa.) said after Thursday's vote. "We're putting people back to work and making sure our kids are being taken care of."
Several education and Parent Teachers Association representatives welcomed senators after 61-38 vote to approve the bill. All Democrats and two Republicans, Sens. Susan Collins and Olympia Snowe of Maine, voted in favor.
The package would provide $16 billion to the states to extend funding for Medicaid, the state-federal health care program for low-income residents. Demand for Medicaid services – and the program's cost – have risen sharply as a result of the recession and slow recovery.
The extra aid would now be extended through June 2011.
Many states had already counted on the expected funds in their annual budgets, and governors pressed Congress to act, arguing that they would be exposed to even tougher budget cuts without help from Washington. Unlike the federal government, most states cannot legally run deficits.
The Senate package also extends $10 billion to avoid 138,000 teacher layoffs nationwide. Tens of thousands of other public employee jobs including firefighters and police are also expected to remain on the job as extra funds flow to the states.
The bill is paid for by the food stamp cuts, closing foreign tax loopholes, eliminating advance filing of a low-income tax credit that Obama had sought to end and trims in various other government programs.
"Thank you, senator!" said one of the education representatives as Reid welcomed them to an afternoon press conference.
The hard-fought bill was met with stiff resistance from most Republicans even on its route to passage, and reflects the stark showdown between the two major parties in this fall's midterm election.
Rep. John Boehner (R-Oh.), the minority leader, said Democrats were "scampering back to Washington to push through more special interest bailouts and job-killing tax hikes."