The Senate on Thursday approved a jobs bill that would send states $26.1 billion to help them cope with historic budget shortfalls and give Democratic lawmakers a victory to tout on the campaign trail ahead of the November elections.By a 61-to-39 vote, the Senate passed a bill that would send the states $16.1 billion for Medicaid, the healthcare program for the poor, and $10 billion to prevent teacher layoffs. States could face total budget gaps this year of $120 billion.
The U.S. House of Representatives, in a rare move by Speaker Nancy Pelosi, has been summoned back from its August recess to vote on the measure. That is expected to happen on Tuesday. The bill would then go to President Barack Obama for his signature. Similar measures previously have passed the House.Republicans say the legislation will add to the deficit and tie states’ hands on how to spend the funds. They have attacked it as a “job-killing tax increase.”
They also say the bill serves “special interest groups,” specifically teachers unions whose members tend to vote for Democrats.Pelosi said that labeling teachers and police officers, who will also benefit from the state aid, is demeaning.”This legislation is about creating and saving American jobs and preventing a double-dip recession,” she said. “It is fiscally responsible and fully paid for.”
Democrats facing a wave of anti-Washington anger hope the bill will convince voters going to the polls on November 2 of their commitment to bring down the U.S. unemployment rate, which is near 10 percent.The fragile economic recovery is foremost on the minds of voters and candidates for the 435 House seats and 37 Senate seats up for grabs.
Although states have been begging for the Medicaid money, they are wary of the teachers’ fund as it requires them to keep education spending at 2008 levels, which many cannot afford.Supporters say the bill will not add to the deficit because it is paid for by closing tax loopholes, eliminating advance refunds on the earned income tax credit and ending stimulus funds for food stamps earlier than expected.
One loophole that would be closed would raise more than $10 billion over a decade by preventing companies from claiming foreign tax credits for income not yet subject to U.S. tax.More than half of the 50 U.S. states counted on the additional funds for Medicaid for fiscal 2011, which started last month for many.
States use federal reimbursements to run the program. The $862 billion economic stimulus plan passed last year boosted the reimbursements, but the extra money runs out in December and states have been considering spending cuts and tax cuts to fill the void.The Medicaid money will also give older people access to healthcare, said AARP, the lobbying group for older Americans.
“States are better able to continue offering the often less costly home and community-based service that older Americans overwhelmingly prefer to more expensive nursing homes,” said the group representing retirees.The healthcare industry generally found reassurance in the Senate vote, saying the extra money will help hospitals and pharmacies continue to provide services.
One state, though, was not pleased. The bill would require Texas to agree to maintain or increase education funding during fiscal 2011, 2012 and 2013, in order to receive any of the teacher funds.The federal government was targeting the Lone Star state, said Governor Rick Perry, a Republican running for reelection in November.”Washington would be taking yet another step toward usurping the state’s authority by determining how to fund our schools, and what’s worse, no other state is subject to this provision,” Perry added.(Reuters) –
Santosamaru 