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House returns from recess to pass state aid bill

August 10, 2010 - by Donny Shaw

The House came back from their August recess today to vote on the Education Jobs and Medicaid Assistance Act, which the Senate passed last Thursday, after the House had already adjourned. It gives states $26.1 billion to help pay for Medicaid and teachers’ salaries. Since both chambers passed the exact same version of the bill, it was immediately enrolled by Speaker Nancy Pelosi [D, CA-8] and sent directly to Obama, who has already signed it into law.

The vote was a near-party-line 247-161. Two Republicans crossed the aisle to vote for the bill with the Democrats — Rep. Anh Cao [R, LA-2] and Rep. Michael Castle [R, DE-0]. Three Democrats, all members of the conservative Blue Dog Coalition, voted with Republicans against the bill — Rep. Bobby Bright [D, AL-2], Rep. Jim Cooper [D, TN-5] and Rep. Gene Taylor [D, MS-4]. Twenty-five congressmen didn’t take the time out of the recess to return to D.C. and vote on the bill, including 7 Democrats and 18 Republicans.

According to the White House’s Council of Economic Advisers,161,000 teacher layoffs will be averted by the bill. Furthermore, the left-of-center Economic Policy Institute estimates that the Medicaid portion of the bill could save up to 158,000 jobs.

The bill is fully offset — meaning that it will not add to the deficit — by cutting $11.9 billion to food stamps (bringing the program back to pre-Recovery Act levels), closing a tax loophole that U.S. companies use to operate tax-free in other countries, and $6.7 billion in recessions from Recovery Act programs, the Defense budget, and other areas. In total, the Congressional Budget Office’s analysis of the bill found that it would save the federal government $1.37 billion over the next ten years.

Still, as evidenced by the vote results, Republicans were not impressed with it at all. This morning, House Minority Leader Rep. John Boehner [R, OH-8] took to the podium to attach what has proven to be one of the most politically-poisonous labels to the bill — he called it a “bailout.”

“Everyone knows that state budgets have been hit hard and no one wants teachers or police officers to lose their jobs,” Boehner said. “But where do the bailouts end? Are we going to bail out states next year and the year after that too? At some point we’ve got to say ‘enough is enough.”

Now that the Dems have finally gotten this job-saving measure all taken care of, the question is will they be able to move on legislation that is actually designed to create new jobs for the 20 million or so unemployed people in this country. Senate Dems have been trying since late June to overcome a GOP-lead filibuster of the Small Business Jobs and Credit Act, but are still three votes short.

The bill would allow the Treasury Department to lend $30 billion to small banks with incentives designed to encourages the banks to then loan the money out to small businesses that are looking to expand and hire. Banks taking loans from the Treasury under the bill would pay a dividend of only 1% if they increase small business lending above 2009 levels by 10% or more. If they decrease lending, they would have to pay dividends of up to 7%. The Congressional Budget Office estimates that the bill would have a positive net impact on the deficit of $1.1 billion over ten years.

When the Senate returns in September, the small business bill is expected to be one of the top items on their agenda. But with everything else they want to do — e.g. energy, immigration, appropriations, campaign finance — it could easily get abandoned if they can’t make any progress after the recess in rounding up the three votes they need to break the filibuster.

Pictured above are several members of the House Democratic leadership, and a couple school children, at the bill enrollment ceremony today.

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