Thompson Publishing Group August 5, 2010

HEADLINE: Senate Clears $10B for Education Jobs, House to Reconvene

By Travis Hicks and Charles Edwards

WASHINGTON, Aug. 5 - The Senate today easily approved a bill providing $10 billion for education jobs and $16 billion for Medicaid. In anticipation of the Senate action, House Speaker Nancy Pelosi, D-Calif., announced late yesterday that she would call House members back from their August recess for a widely expected affirmative vote that would send the bill to President Obama. The House vote is scheduled for next Tuesday.

The new funding is intended to assist states struggling with depleted coffers by providing $10 billion to prevent teacher layoffs and $16 billion to avoid Medicaid cuts.

"As millions of children prepare to go back to school - many in just a few days - the House will act quickly to approve this legislation," Pelosi said.

Today's 61-39 Senate vote was a largely pro-forma follow-up to a critical procedural vote yesterday that barely achieved the supermajority required to overcome a Republican filibuster. With 60 votes needed to achieve "cloture" on debate, that Senate vote resurrected a bill that many had given up for dead.

Weeks ago, the House approved a similar package as part of a supplemental war spending bill, but Senate Democratic leaders were forced to strip out the domestic aid to obtain the support of deficit-wary Republicans for the must-pass defense bill. After days of behind-the-scenes effort, Democrats were able to craft a new aid bill that offsets the extra spending by revenue and budget cuts. Following the Congressional Budget Office's confirmation that the domestic aid bill was deficit-neutral, two Republicans - Maine's Olympia Snowe and Susan Collins - crossed party lines Aug. 4 to break the Republican filibuster.

The bill created the offsets mainly by sun-setting a previous extension of food stamp benefits and halting tax breaks for multi-national corporations located outside the United States but with significant operations within the country. The food-stamps benefits were included as part of the 2009 American Recovery and Reinvestment Act (ARRA). Minor rescissions of other previously approved appropriations in other accounts closed the final gap.

President Obama originally requested $23 billion for economic aid, but he nonetheless applauded the Senate's action, saying, "We know that economic prosperity and educational success go hand in hand."

The education aid will flow through the framework established by the State Fiscal Stabilization Fund under ARRA. The main difference is that the original stabilization fund allocated a small percentage of aid for public safety and other non-education purposes, while the new version of the program devotes every penny to education.

Although the new money won't stave off all education-related cuts, the National Education Association estimates the $10 billion will preserve approximately 140,000 teaching positions nationwide. The grants will flow through the states to local education agencies based either on a state's formula for distributing state aid or the Title I formula.