Now, it needs a House vote and the president’s signature. The House is already on August recess. But its members might be back next week. The Hill reports that House leadership is considering calling back representatives from their campaigns in their home states. The House is not technically due back until the second week of September, but states need the funds disbursed immediately, since they have already started their fiscal calendar years.

This morning, 38 Senate Republicans voted to filibuster the bill, despite the fact that it was entirely paid for. After the vote, Democrats blasted the GOP for refusing to fund the deficit-neutral, job-saving bill — trying out a line to be used in the fall, “the GOP job-killing agenda.”

In a release, Sen. Harry Reid (D-Nev.), said, “Today we did our job as Senators: We saved people’s jobs. We’re keeping hundreds of thousands of teachers, firefighters and policemen from being fired. But those aren’t just numbers. These more a million families who need to put food on the table — more than a million people who can and want to be part of our recovery.”

He continued, “I am still simply astonished that more than 95 percent of Senate Republicans turned their backs on some of our most selfless and bravest Americans. I don’t envy them having to explain that back home.”

A spokesperson for Rep. John Boehner (R-Ohio), the House minority leader, told The Hill, “The American people don’t want more ‘stimulus’ spending – particularly spending for labor unions attached to a job-killing tax increase. Democrats would be better off listening to their constituents, who are asking, ‘where are the jobs,’ rather than returning to Washington to vote for more tax hikes and special interest bailouts.”

The initial version of the state aid bill — championed by Republican and Democratic governors, as well as congressional Democrats — cut approximately $6.7 billion from the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps). It did so by taking back some of an expanded benefit created in the American Recovery and Reinvestment Act, the Feb. 2009 stimulus bill. The state aid bill made a number of cuts to provide $10 billion for teachers’ jobs and $16.1 billion for Medicaid funds.

Sen. Harry Reid (D-Nev.) thought the bill was deficit-neutral, but the Congressional Budget Office said it came up approximately $5 billion short. (The Democrats had not cut enough because they had not factored in the timing of the bill’s passage. The changes cannot go into effect until mid-September, at the earliest, as the bill needs a House vote.) Democrats tinkered with the bill, cutting unspent funds from a number of programs.

And they expanded the cuts to SNAP. A CBO score released last night shows the revised version more than pays for itself, reducing the deficit by $1.37 billion over the next ten years. SNAP benefits face a $11.9 billion rollback starting in April, 2014. A family of three can expect their benefits to drop about $50 a month.

Never before have congressional policies actually created a month-to-month cut in food stamps. Even in the 1996 rollback of numerous welfare programs, SNAP benefits just grew more slowly than food inflation. Congress has always attempted to avoid a “cliff.” And, as I reported yesterday, policy experts describe that “cliff” in benefits as “devastating”:

The ARRA increase to SNAP benefits boosted benefits from meager to less-meager, advocates say. “We have been very supportive of the ARRA boost,” says Ellen Vollinger of the Food Research and Action Center. “But it underscored that these benefits are not generous. Anecdotally, we heard that the ARRA boost let some SNAP recipients keep going to the supermarket in the third or fourth week of the month, rather than going to a soup kitchen starting after the second week. They were stretching out their benefits, and purchasing some more nutritious food, like fresh fruit and vegetables.” Vollinger notes that even with the ARRA funding the average SNAP benefit is not really enough to eat.

And FRAC argues that that the situation where the government might actually cut benefits… would be “devastating” for recipients. “In the 1990s, there were terrible cuts to the program,” Vollinger explains. “But nobody ever started receiving less money [because the benefits increased more slowly than the price of food increased]. That situation — what will happen if people aren’t well-informed about the cut? What if they don’t recognize that the benefit will be lower?” It has never happened in the history of the program, Vollinger notes.

They’re the whipping boys for a new generation of governors who, thanks to a tanking economy and an assist from editorial boards, feel freer than ever to make political targets out of what was once a protected liberal class of teachers, cops, and other public servants….

[New Jersey Gov. Chris Christie]  is merely the most florid voice for a calculated, national effort to fundamentally reshape the debate on the labor costs that account for the bulk of government spending at every level. And at the core of the shift is a perception among many political leaders that public anger at civil servants is boiling over.

“We have a new privileged class in America,” said Indiana Gov. Mitch Daniels, who rescinded state workers’ collective bargaining power on his first day in office in 2006. “We used to think of government workers as underpaid public servants. Now they are better paid than the people who pay their salaries.”

Though, as the story points out, the opposition to unionized public-sector workers seems to be the product of worries about issues mostly outside of the employees’ control. Bus drivers aren’t to blame for the fact that their pensions were mismanaged, or that falling property and income taxes have forced states to slash their budgets. Nor does it seem useful to castigate them for demanding competitive wages.

“It’s outrageous to blame a librarian — to blame a fireman for the financial mess that we find this country in,” the president of the American Federation of State County, and Municipal Employees, the largest national public workers union, Gerard McEntee, said. “We are the scapegoats in the states.”

That seems right to me: The pension crisis is a crisis, and in the future, state employees should probably expect much less generous long-term pension plans. But no need to blame current public sector workers themselves. And the debate over the promotion and compensation of teachers is important, but orthogonal to the issue.

Moreover, I worry that this view of government employees as overcompensated and entitled will provide political cover for broader layoffs — layoffs that are coming as the state budget crisis peaks this year and next, and will be detrimental in terms of city services and in terms of the recovery. More lay-offs mean more unemployed people competing for jobs and less household consumption. Right now, Democrats should be worried about keeping people employed, not criticizing jobs with good benefits.

First, Medicaid pays providers at such low rates (roughly 72 cents for every dollar Medicare pays) that a huge chunk of the nation’s physicians refuse to treat new Medicaid patients outright. The trend begs the question: What good is health coverage if no one accepts it?

And second, as The Washington Post points out today, state budgets are so squeezed already that governors are reluctant to adopt any new financial burdens, even if it means getting health coverage for more residents. (Although Medicare is subsidized exclusively by the federal government, states are on the hook for a percentage of Medicaid costs.) Indeed, many governors oppose the Medicaid expansion in the Finance bill.

“I can’t think of a worse time for this bill to be coming,” said Tennessee Gov. Phil Bredesen (D), a member of the National Governors Association’s health-care task force. “I’d love to see it happen. But nobody’s going to put their state into bankruptcy or their education system in the tank for it.”

Medicaid is difficult to analyze, because the 50 states and the District of Columbia each have different payment structures and eligibility rules. In poor states, for example, the federal government picks up a larger percentage of the tab, relieving the burden on state coffers.

Also, some states have taken it upon themselves to expand Medicaid to cover a larger portion of their low-income population. Maine, for example, covers parents up to 206 percent of the poverty level, while many other states have kept Medicaid largely focused on kids, disabled folks and pregnant woman — the populations they’re required to cover under federal law. Indeed, in 34 states, parental Medicaid eligibility is set below the federal poverty level.

The differences in programs complicate the push for universal uniform. The Finance Committee’s bill would expand eligibility enormously, in effect offering coverage to every American earning less than 133 percent of poverty ($14,404 a year), including childless adults, who are currently prohibited from participating. That provision has been skewered by those states facing the largest enrollment hikes because they don’t already cover many adults.

The Finance bill (as amended) also requires states with expanded coverage to maintain those heightened eligibility levels for pregnant woman and the disabled above 133 of poverty until state insurance exchanges become operational, which is expected to occur at the start of 2013. That maintenance of eligibility requirement has been blasted by the states with the most generous Medicaid programs, which wouldn’t have the option of dropping higher-income adults if the budget situation worsened.

The Finance Committee is expected to approve the larger health reform proposal this week. But you’d be crazy to think that the debate over Medicaid won’t resurface in a big way when the bill moves to the Senate floor.

We are not going to be hampered by ideology in trying to get this country back on track. We want to figure out what works [...]

If you can show me something you are doing that’s working, or if you tell me that this program or this regulation is hampering us from doing smart things that will advance the interests of our state, then you’re going to get a ready ear. [Emphasis added.]

The remark drew applause from many of the governors, who probably can name a few environmental regulations or worker protections unpopular with business interests in their states.

But while the comment is surely less popular with liberal activists, they can probably take comfort knowing that Obama has a 96 percent lifetime rating from the League of Conservation Voters and drew broad support from labor unions during the primaries, as well as the general election campaign.

While he may be willing to listen to the governors and open to some changes, it seems unlikely that he would turn his back on the concerns of these core Democratic constituencies.

Politico’s Mike Allen has some excerpts from Obama’s prepared remarks, to be delivered today at the National Governor’s Association meeting in Philadelphia.

As president, I will not simply ask our nation’s governors to help implement our economic recovery plan. I will ask you to help design that plan. Because if we’re listening to our governors, we’ll not only be doing what’s right for our states, we’ll be doing what’s right for our country. That’s how we’ll grow our economy – from the bottom-up. And that’s how we’ll put America on the path to long-term prosperity. [Emphasis added.]

Economic policies targeted at those at the bottom, with the benefits intended to work their way up to the top? In America?

Throughout Washington, the heads of hundreds of conservative think-tankers are no doubt exploding simultaneously.

UPDATE: Obama just delivered the remarks, and he veered considerably from the prepared remarks sent to reporters. He omitted the line I highlighted above. Perhaps he saw it as too ideological or antagonistic, or he simply forgot it. However, it will be very interesting to see to what extent his administration’s economic policies reflect that principle.

In the video, Obama reiterated his campaign pledges for quick and dramatic action on global warming, and vowed to partner with any governor, nation or company willing to work on the issue.

The video also demonstrates Obama is being somewhat selective in avoiding sending mixed messages to foreign leaders. Not that this is necessarily a bad thing — in this case, quite the contrary. But his position on taking action on climate change is clearly at odds with that of the current administration.