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Published: Wednesday, 8/11/2010

Congress signs $26B plan for public jobs

BLADE NEWS SERVICES

WASHINGTON - Congress approved another spurt of spending Tuesday to shore up the sluggish recovery, sending to the White House a $26 billion plan to save the jobs of thousands of teachers and other government workers.

The measure brings total direct federal spending on the economy to just over $1 trillion since the economic downturn began in late 2007.

After the 247-161 vote in favor of the legislation, President Obama quickly signed the measure, underscoring the importance Democrats place on the bill that they view as compelling evidence of their commitment to protecting U.S. jobs.

With economic growth faltering and unemployment stuck at 9.5 percent, some economists are urging additional action. But senior Democrats and administration officials said the package of state aid approved Tuesday is likely to be the last significant economic stimulus effort until after the November elections.

House Speaker Nancy Pelosi (D., Calif.), determined to show angry voters a commitment to improving the economy, summoned lawmakers back from their August break for an unusual one-day session to vote on the package, saying it would help governors facing their own budget problems avoid laying off more than 300,000 workers.

Republicans derided the measure as a transparent handout to teachers' unions, a key Democratic political constituency, and argued that it would be no more successful at restoring the nation's economic health than was the massive stimulus package President Obama signed soon after taking office last January.

"This is a bailout. This is another bailout. … Let's not do this!" yelled Rep. Steve Buyer (R., Ind.). "We're facing almost a $1.5 trillion budget deficit. America, please, please, wake up. And remember in November."

In a midafternoon vote, the House approved the measure with most Republicans voting no. The Senate had already signed off on the package.

Just two Republicans crossed party lines to support the measure; three Democrats opposed it.

Among Ohio congressmen, Democrat Marcy Kaptur voted yes, and Republicans Bob Latta and Jim Jordan voted no.

Michigan Democrats John Dingell and Mark Schauer voted yes.

"This measure will help recession-ravaged school districts in Ohio maintain or hire back more than 5,000 teachers as the school year begins," Miss Kaptur said. "Districts across our state have been hard hit by the recession, and cutbacks of key personnel have made the coming school year look more daunting. Also, important to note, this bill was totally paid for."

Leading Republicans harshly rejected the bill, calling it the latest case of overspending by Democrats. They also said Congress was coming to the rescue of states that had mishandled their own finances.

"We are broke," Rep. John A. Boehner of Ohio, the Republican leader, said about the federal government. "We do not have the money to bail out the states. It's time for them to get their arms around their problems and not look to Washington to bail them out."

The measure would provide governors with an additional six months of federal assistance: $10 billion in education aid and about $16 billion to fill gaps opened in state Medicaid budgets by increasing demand on the health program for the poor. The sum is only about half what Mr. Obama requested. Faced with bipartisan anxiety about soaring budget deficits, Democratic leaders decided not only to scale back the package, but also to cover its cost by increasing taxes on multinational corporations and rescinding an increase in the food stamp program that was enacted in the 2009 stimulus package. The cut would not take effect, however, until 2014.

Ohio would get $361.2 million for hiring teachers and $530 million for Medicaid.

Michigan would get $380 million for Medicaid and $318 million for schools. The Detroit News reported that the $318 million allocated for Michigan would save 4,700 teachers' jobs in time for classes next month.

Earlier Tuesday, Mr. Obama urged lawmakers to approve the package, calling it essential to avoiding a new round of layoffs.

"We can't stand by and do nothing while pink slips are given to the men and women who educate our children and keep our communities safe," Mr. Obama said at a Rose Garden news conference, where he was flanked by Education Secretary Arne Duncan and two public school teachers.

Despite the fresh aid, many states face fiscal troubles. The package represents less than a quarter of what the National Governors Association estimates will be a cumulative shortfall of $116 billion in state budgets over the next two years.

South Carolina Gov. Mark Sanford, a Republican, whose state would receive more than $280 million, said federal and state governments alike should learn to live within their means.

In South Carolina, he said, "we'll have to deal with some cutbacks, but they're relatively mild in the grand scheme of things. The danger of the stimulus and other things like it, is that we're hurting the engine that creates the revenue for the rest of the government."

Mr. Sanford also said the relief would choke efforts to overhaul schools and other public services.

"All the air gets sucked out of the chance to make any reform," he said, "because nobody wants to make changes if they don't have to in politics."



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