Senate approves $26.1 billion for state aid

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) –

President Barack Obama's major priorities dropped from the agenda of an election-year Congress facing voter disillusionment

WASHINGTON Immigration reform has become the first of President Barack Obama’s major priorities dropped from the agenda of an election-year Congress facing voter disillusionment. Sounding the death knell was Obama himself.The president noted that lawmakers may lack the “appetite” to take on immigration while many of them are up for re-election and while another big legislative issue – climate change – is already on their plate.

“I don’t want us to do something just for the sake of politics that doesn’t solve the problem,” Obama told reporters Wednesday night aboard Air Force One.Immigration reform was an issue Obama promised Latino groups that he would take up in his first year in office. But several hard realities – a tanked economy, a crowded agenda, election-year politics and lack of political will – led to so much foot-dragging in Congress that, ultimately, Obama decided to set the issue aside.

With that move, the president calculated that an immigration bill would not prove as costly to his party two years from now, when he seeks re-election, than it would today, even though some immigration reformers warned that a delay could so discourage Democratic-leaning Latino voters that they would stay home from the polls in November.Some Democrats thought pushing a bill through now might help their party. If it failed, they could blame Republican resistance, though in reality many Democrats didn’t want to deal with an immigration bill this year either.

Perhaps seeing the handwriting on the wall, top Senate Democrats released a legislative framework for immigration reforms anyway. The draft proposal, obtained by The Associated Press on Tuesday, called for, among other things, meeting border security benchmarks before anyone in the country illegally can become a legal permanent U.S. resident.By Wednesday, House Speaker Nancy Pelosi offered little hope that the issue was still alive on Capitol Hill.”If there is going to be any movement in this regard, it will require presidential leadership, as well as an appetite, is that the word? … as well as a willingness to move forward in the Congress,” she said.House Republican leader John Boehner was more blunt. “There is not a chance that immigration is going to move through the Congress,” he said Tuesday.

Rep. Luis Gutierrez, the Democrats’ leading advocate for immigration reform, has said he voted for health care reform on the understanding that Obama and congressional Democrats would move a major immigration bill.Even though he would like to see Latinos turn out to vote for Democrats in 2010, Gutierrez said “many will probably decide to stay home.” However, he added, a strict, new immigration law in Arizona may change that dynamic. The law requires law enforcement officers to question anyone they suspect is in the country illegally.”On one hand you are not going to vote because you don’t believe people you voted for are doing a good enough job,” Gutierrez said. “Then you say, ‘I got to vote, because the enemy is so mean and vindictive, I got to get out there.'”The Hispanic vote is growing, largely because of Latinos’ increasing population. The 9.7 million Latinos who cast ballots in 2008 made up about 7.4 percent of the electorate, according to a 2009 Pew Research Center study.

Hispanic voters helped flip the battleground states of Colorado, Florida, Nevada and New Mexico from Republican to Democratic in the 2008 presidential election.But even though Latinos’ numbers have been increasing, in some parts of the country their portions of voting populations are not large enough to affect election outcomes.

Democrats hold a 254-177 majority in the House, with four vacancies. But 48 are in districts where Republican Arizona Sen. John McCain did better than Obama in the 2008 elections.Matt Angle, a Democratic political strategist focused on Texas, said it would be worse for Democrats to propose a bill that has no hope of passing or getting Republican support. Doing so would allow Republicans to cherry-pick parts of the bill to use against Democratic candidates, he said.

The Senate also has a number of competitive races, some in states with significant numbers of Hispanic voters, such as in Nevada, the home state of Majority Leader Harry Reid. Latinos are about 12-15 percent of likely voters there.”For Democrats it is critical they can deliver if they want to continue nurturing the support they want from this community,” said Clarissa Martinez De Castro, National Council of La Raza immigration and national campaigns director.(AP)