Political News

Democrats end filibuster on jobs, Medicaid bill

Posted August 4, 2010 2:59 a.m. EDT
Updated August 4, 2010 12:30 p.m. EDT

— Senate Democrats on Wednesday broke a Republican filibuster over a $26 billion measure to help states and local school boards with their severe budget problems.

The bill, which could to a floor vote later this week, 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.

Wednesday’s vote to break the filibuster comes after Democratic leaders made final tweaks to the measure to win the votes of moderate Maine Republicans Olympia Snowe and Susan Collins. Snowe and Collins 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 is so essential to their state’s economy. Majority leader Harry Reid got rid of the proposed cuts Monday night.

The measure 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. The federal government has been picking up a larger percentage of state Medicaid costs, but that program runs out the end of this year.

The legislation, which also must pass the House if the Senate approves it, is 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.

“We’ve made bitter choices,” said Pennsylvania Gov. Ed Rendell, a Democrat. “In the last three years Pennsylvania has raised more than a billion dollars in new revenue and we’ve cut spending by over $3.5 billion. It’s not like we haven’t done anything, and we’re coming to Washington and saying, ‘Bail us out.’”

North Carolina was counting on about $500 million in Medicaid money to fill holes in its budget, and lawmakers had to make contingency cuts before passing the 2010-11 budget in June in case Congress didn't approve the money.

U.S. Sen. Kay Hagan said Wednesday that North Carolina would receive about $343 million under the scaled-back bill.

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

"The funding is expected to keep over 140,000 educators across the country from losing their jobs," Hagan said. "North Carolina would receive close to $300 million, which from some of the numbers I'm looking at, would save probably 4,500 education jobs in North Carolina."

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.

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 is running ads Wednesday in four Maine newspapers urging Collins and Snowe to vote to break the filibuster.

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.