Blog - Education Funding Bill: Costly Bailout Or Jobs Saving Measure?

When the Senate whittled down a $174 billion jobs bill from the House to a mere $15 billion bill, one of the many ideas to hit the cutting room floor was a $23 billion fund to prevent layoffs in education. Last week, Sen. Tom Harkin [D, IA] revived the idea and introduced it as a standalone Senate bill.

Harkin’s Keep Our Educators Working Act (S.3206) creates a $23 billion Education Jobs Fund that would act as a one-time injection of federal dollars to help stem the tide of layoffs threatening schools across the nation. Unlike previous education stimulus efforts, dollars from the fund can only be spent on employment costs in education such as salaries and benefits.

The House already approved a version of this fund as part of a $147 billion jobs bill passed last year. However, when that bill hit the buzzsaw of the Senate, the fund was cut out and the bill became the leaner $15 billion Hiring Incentives to Restore Employment (or HIRE) Act (H.R.2847).

Harkin was likely inspired to rescue the fund in part by a recent wave of grim employment news from the education sector:

This month, the American Association of School Administrators reported that two-thirds of members surveyed cut positions this school year and 90 percent expect to do so in the coming year. The survey of 453 administrators also found that 62 percent anticipated raising class size, 34 percent were considering cancellation of summer school and 13 percent were weighing the possibility of a four-day school week.

The National Education Association, a teachers union with 3.2 million members, counts 26,000 teachers in jeopardy of layoffs in California, 20,000 in Illinois, 13,000 in New York, 8,000 in Michigan and 6,000 in New Jersey.

Education Secretary Arne Duncan wants to see quick passage of the Keep Our Educators Working Act and warned that a delay could mean hundreds of thousands of public school layoffs:

“What we’re trying to do here is avert an education catastrophe,” Duncan said. “This is not something you can do in October. We are projecting between 100,000 and 300,000 layoffs [if nothing is done]. . . . Ideally this needs to be passed in May or June. It’s not too late [for a bill], but there is a short window of opportunity.”

Harkin’s bill is just the latest attempt in a long-running effort by Congress to pump federal dollars into school budgets hit hard by the recession and save education jobs:

In the economic stimulus bill passed in February 2009, Congress appropriated about $100 billion in emergency education financing. States spent much of that in the current fiscal year, saving more than 342,000 school jobs, about 5.5 percent of all the positions in the nation’s 15,000 school systems, according to a study by the Center on Reinventing Public Education at the University of Washington.

In fact, the Education Jobs Fund is modeled after the $48.6 billion State Fiscal Stabilization Fund that became law as part of last year’s stimulus bill.

While everyone acknowledges the dire budget situation facing schools, some Republicans like Sen. Lamar Alexander [R-TN] characterize the bill as a “bailout” for schools and question whether the government can afford the $23 billion.

The Heritage Foundation, an influential conservative think tank, says that the cost of Harkin’s bill will lead to high taxes and that the education bailout will only prevent school from making tough, but necessary reforms:

Harkin’s $23 billion spending bill will prevent states from having to make difficult decisions such as rethinking existing programs and increasing efficiency. Harkin is ultimately letting states off the hook for existing financial obligations and budget shortfalls. His is a plan that is unlikely to spur states to implement long-term solutions in a sector that is ripe for reform.

Harkin’s bill currently has 18 Democratic co-sponsors, including party leaders like Senate Majority Whip Dick Durbin [D, IL] and Sen. Chuck Schumer [D, NY]. Despite this considerable support, at least one Republican vote will be needed in the case of a filibuster. The bill is currently being considered in the Senate Committee on Health, Education, Labor, and Pensions.