House OKs $26 Billion in Emergency State Aid for Teachers, Medicaid

BY Quinn Bowman  August 10, 2010 at 3:41 PM EST

The House of Representatives Tuesday approved a bill that will provide $26.1 billion in aid to states for teachers and Medicaid after making a rare return from August recess for the emergency vote. The bill passed 247-161, with most Democrats voting for the measure and most Republicans against it.

The Senate has already passed the bill, so President Obama can now sign it into law. In an appearance in the White House Rose Garden Tuesday morning, Mr. Obama urged both parties to vote for the aid bill. He warned that not passing the bill would mean teachers across America would lose their jobs and take America “backward, not forwards.”

The bill is paid for by approximately $12 billion in cuts to food stamps and the elimination of tax loopholes that allow multinational companies based in the U.S. that do business in foreign countries. It provides $10 billion to states to hire teachers, which the White House claims will save 161,000 jobs. It also provides $16 billion to states for Medicaid, the government health insurance system for the poor.

The Congressional Budget Office estimated that over a 10-year period, the bill would reduce the deficit by $1.37 billion, although it would add $22 billion to the deficit in the short term. Government debt has become an issue in the 2010 midterm elections, with Republicans arguing that Democrats have grown government too large and added too much debt via stimulus spending and bailouts.

In his statement, the president defended the measure to aid states.

“It’s one thing for states to get their fiscal houses in order and tighten their belts like families across America – because families have been doing it, there’s no reason that states can’t do it, too. That’s a welcome thing. But we can’t stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe,” Mr. Obama said.

Several House Republicans criticized the bill. House Minority Leader John Boehner said the tax changes in the bill would kill jobs.

“Everyone knows that state budgets have been hit hard and no one wants teachers or police officers to lose their jobs. But where do the bailouts end? Are we going to bail out states next year and the year after that too? At some point we’ve got to say ‘enough is enough,’” Boehner said in a statement.

Boehner released this top 10 list of reasons why the bill was a bad idea. The list calls the money for teachers a “bailout for union bosses,” referring to the support Democrats typically receive from the teacher’s unions.

Rep. Barney Frank, D-Mass., pushed back against Republican criticism. He charged Republicans with obstructing improvement in the economy in order to blame Democrats.

Had the state aid bill been massed a month ago, “we wouldn’t have job losses next week,” Frank said. “Sorry to have to say that, but they don’t want things to get better.”

State budgets have been in crisis mode despite the end of the recession. With lower economic activity, states have less tax money to collect. And as more people rely on state services due to job losses, those services become taxed.

This New York Times story highlights the difficult choices some local governments have been forced to make.

Dallas area Rep. Jeb Hensarling, a Republican, mocked the emergency vote on the House floor.

“We are here today because the Speaker of the House has declared us in ‘Emergency Session.’ There is a national emergency. Apparently, Congress has not spent enough money,” he said.