Senate advances jobs bill, Murray measure for Medicaid, teachers

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by Associated Press

NWCN.com

Posted on August 4, 2010 at 9:17 AM

Updated Wednesday, Aug 4 at 4:22 PM

Gov. Chris Gregoire is optimistic she won't have to make deep cuts to state programs following a key Senate vote on additional federal Medicaid dollars.

The Senate voted 61-38 Wednesday morning to advance the bill, and is expected to vote on it later Wednesday or Thursday. It would extend programs enacted in last year's stimulus law to help preserve the jobs of tens of thousands of teachers and other public employees.

Gregoire says the money ensures that Washington and other states "will not be forced to make drastic cuts that would have harmed both our citizens and our economic recovery."

Once passed by the Senate, it would then return to the House for a final vote that would deliver it to President Barack Obama for his signature.

Moderate Republican Sens. Olympia Snowe and Susan Collins of Maine cast the key votes to break the GOP filibuster.

The bill would also extend programs enacted in last year's stimulus law to help preserve the jobs of teachers, police officers, firefighters and other public employees.

The legislation is scaled back from versions that stalled earlier this summer as part of a larger tax-and-spend measure extending jobless benefits and a variety of expired tax breaks. The first piece is $16 billion to help states with their Medicaid budgets in the first six months of next year.

It's less generous than the help provided under the stimulus law but is still desperately sought by governors, who have already made big budget cuts as tax revenues have plummeted in the recession and warn of even worse cuts if the federal help is not continued.

The measure also contains $10 billion to help school boards hit with similar budget woes avoid teacher layoffs this fall.

"This legislation makes a difference," said Sen. Patty Murray, D-Wash. "Real people in real jobs. Real paychecks."

But most Republicans opposed the measure, calling it a payoff to public employee unions and warning that it would make the states ever-dependent on federal funds.

The spending is accompanied by tax increases and spending cuts to avoid increasing the budget deficit. The bill eliminates in March 2014 an expanded food stamp benefit enacted last year and limits the ability of some U.S.-based multinational companies to use foreign tax credits to reduce their U.S. taxes.

"That would have the effect of driving jobs overseas," said Sen. Lamar Alexander, R-Tenn.

Democrats, who control the chamber with 59 votes, needed to pick up at least one Republican to muster the 60 votes required to defeat the GOP filibuster.

Wednesday's vote to break a GOP filibuster came after Democratic leaders made final tweaks to the measure in hopes of winning over Snowe and Collins. The duo also provided the key votes last month to pass a six-month extension of jobless assistance for the long-term unemployed.

A vote scheduled for Monday was postponed after an analysis by the Congressional Budget Office showed the measure would add to the deficit. Snowe and Collins also had been concerned about cuts to Navy shipbuilding accounts since the Bath Iron Works in Maine is so essential to the state's economy. Majority Leader Harry Reid got rid of the proposed cuts Monday night.

Reid orchestrated other changes to close an almost $5 billion deficit gap, including new reforms to a tax credit claimed by the working poor.

Collins has been a past supporter of giving states help with their budgets and was the driving force behind an aid package enacted in 2003 that added $20 billion to the deficit.

Both provisions are heavily backed by unions for teachers and public employees, key allies of the Democratic Party. The American Federation of State, County and Municipal Employees ran ads Wednesday in four Maine newspapers urging Collins and Snowe to vote to break the filibuster.

"It's important to be able to provide this support to the states at a very critical time," Snowe said afterward. "I think it also should be done with the understanding that the states are going to have to begin to make some tough decisions."

Obama requested an extension of additional aid for the Medicaid program in his budget and has belatedly rallied behind the money for teachers as well.

(Editor's note: Dino Rossi, who is challenging to unseat Murray this November, released the following statement in response to the bill)

"This is a stopgap measure which temporarily bails out states, letting them put off making the same tough budget decisions Washington State families are making every day. The measure proposed by Sen. Murray contained a permanent tax increase to pay for temporary spending, in addition to cutting needed money from our men and women in uniform."

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