House expected to approve $26 billion in aid to states

McClatchy NewspapersAugust 9, 2010 

WASHINGTON — The House of Representatives plans Tuesday to approve funding that would save an estimated 161,000 teachers' jobs nationwide and pump billions of dollars into depleted state treasuries to help pay health benefits for the poor.

The Senate approved the measure last week, so House approval would clear the measure for President Barack Obama to sign into law.

Democrats hope that the vote will give the party's candidates a needed jolt of momentum as lawmakers head home for their summer recess before congressional elections in November.

The scheduled showdown on the $26.1 billion aid package "defines the difference between the two parties," said Rep. Chris Van Hollen of Maryland, the chairman of the Democratic Congressional Campaign Committee.

It sure does, angry Republicans agreed.

"The American people don't want more stimulus spending," said House Republican leader John Boehner of Ohio, "especially in the form of a payoff to union bosses and liberal special interests."

It's unclear who'll benefit politically from the extraordinary vote. The House had left for its recess July 30, but when the Senate passed the aid last week on a largely party-line vote, Speaker Nancy Pelosi, D-Calif., summoned the House back into session.

"Traditionally this is the kind of vote Democrats lick their chops over, but you don't know if it's still as potent as it was 20 or 30 years ago. People fear we're spending too much," said Burdett Loomis, an expert on Congress at the University of Kansas.

The bill, which the White House strongly supports, would provide $16.1 billion for Medicaid, the state-federal health program for lower-income people, and $10 billion to help local school districts "prevent imminent layoffs," according to a Democratic information sheet.

The new spending is offset by cuts in other federal spending, including a reduction in food stamp benefits after March 2014, as well as closing some corporate tax loopholes.

The Medicaid money is badly needed, according to an analysis by the National Conference of State Legislatures. The federal and state governments jointly fund the program, and under the 2009 federal stimulus act, Washington was to provide extra aid through Dec. 31.

Congress had been expected to continue providing the money through the first six months of next year — in most states, the last six months of fiscal 2011 — but lawmakers balked at first.

States suddenly faced difficult choices, as potential budget shortfalls were estimated to top $1 billion each in California, Texas, New York and North Carolina alone.

In California, spending this fiscal year on local medical services for low-income people is expected to be about $48.8 billion, with administrative and other costs adding $3.3 billion for a total of $52.1 billion, according to the state's nonpartisan Legislative Analyst's Office.

Of that, $33.5 billion is to come from Washington's usual share, $12.9 billion from state funds including the new aid in the legislation and $5.7 billion from other sources, such as local funds or fees.

The programs provide a range of services, including physicians and hospitals, community support programs for people with developmental disabilities and mental health, alcohol and drug programs.

The Republican argument is that states should cut back, and giving them more federal money will encourage them not to do so.

"We are sending this borrowed money down essentially so they do not have to make the tough decisions they would otherwise have to make," said Senate Republican leader Mitch McConnell of Kentucky. "When does it end? When does this dependency come to an end?"

Republicans, though, are up against some powerful forces, notably teachers. According to federal Department of Education estimates released Monday, California would get $1.2 billion to help pay for 16,500 education jobs.

Other teacher-jobs-saved estimates: Texas, 14,500; Florida, 9,200; Pennsylvania, 5,900; Illinois, 5,700; North Carolina, 5,700; and South Carolina, 2,600.

In California, an estimated 5 percent of the state's teachers, about 15,000 people, were laid off during the 2009-10 school year.

Jennifer Kuhn, the director of K-12 programs for the Legislative Analyst's Office, said that while the federal money would allow many positions to be filled it was unclear whether they could be filled in time for the new school year. School budgets for this year were completed months ago.

In some cases, Kuhn said, "Districts could likely use the federal funds to rehire previously laid-off staff," but the greater impact could come in the 2011-12 school year.

However, Republicans warn, unless the economy improves or state and local governments pare their budgets elsewhere, the same funding problems could resurface.

"The best way to address the challenges our cities and states are facing is to get our economy back on track, not kick the can down the road and double down on the same failing policies," Boehner said.

ON THE WEB

Senate roll call vote on aid bill

Information sheet on legislation

Rep. John Boehner on state aid bill

July unemployment report

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