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Senate Passes State Aid Bill, House Will Return to Vote On It

Today, the Senate approved a state aid bill providing $26.1 billion in funding for cash-strapped local governments to use for Medicaid and teachers’ jobs. The provision is expected to save or create at least as many as 290,000 jobs, including 140,000 teachers’ jobs.

Yesterday, Rep. Nancy Pelosi (D-Calif.), the speaker of the House, announced on Twitter that she has called House members back from their districts to vote on the bill on Tuesday. The House has already recessed for its August break, and was not due back until Sept. 14. But most states’ fiscal budget years started July 1, and Republican and Democratic governors alike were panicked about not receiving the funds and being forced to start the layoff of public employees.

The Senate passed the bill 61 to 39. The vote came down on party lines, save for Maine Republicans Olympia Snowe and Susan Collins. They voted for cloture on Monday, and voted to approve the bill today as well. The measure only needed 50 votes for passage.

The bill contains $16.1 billion in Medicaid funding, extending a transfer of funds from the federal government to states, a stimulus measure, for an additional six months. And it contains $10 billion to prevent the layoffs of teachers and other public employees, including police officers and firefighters.

“The legislation we fought for is about our teachers, the families they need to feed and the children they inspire every day. And it’s about our civil servants, the paychecks they need to make ends meet and the communities they keep moving,” Sen. Harry Reid (D-Nev.), the majority leader, said at a press conference today. “The other side has come to work every day trying to kill jobs and make sure our economic recovery doesn’t interfere with their campaign message. But these public servants have always been there for us. The least we can do is be there for them.”

The bill is fully offset, meaning it does not add to the deficit. In fact, the Congressional Budget Office expects the bill to raise $1.4 billion over the next 10 years. To pay for itself, it closes a $9 billion tax loophole, rescinds unspent funds from a variety of programs and, controversially, cuts some an extension of Supplemental Nutrition Assistance Funds created by the stimulus.

Most Republicans opposed the bill on the grounds that it “bails out” the states. “The trillion dollar stimulus bill was supposed to be timely, targeted and temporary,” Sen. Mitch McConnell (R-Ky.) said this week. “Yet here we are, a year and a half later, and they’re already coming back for more. The purpose of this bill is clear: It’s to create a permanent need for future state bailouts, at a time when we can least afford it.”

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