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House Clears $26.1 Billion State-Aid Package, Dems Slam GOP Obstructionism

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The House passed a bill Tuesday afternoon providing $26.1 billion to cash-strapped state governments, and preventing roughly 161,000 teachers and 158,000 public works employees from being laid off. The vote was 247-161.

President Obama has already signed the bill into law.

Democratic leadership has been under tremendous pressure to pass legislation before the start of the school year policy-wise, and before the November elections politics-wise.

"The frustration of course has been that the Republicans have a two-step strategy: First of all, obstruct anything from getting better, and then point out that things aren't getting better," said Rep. Barney Frank (D-Mass.). "I mean the bill that's being passed today, if it were passed a month ago, we wouldn't have had the job loss report last week and I think they're fine with that."

Technically, the bill provides $10 billion to fund education and $16 billion to fund Medicaid, but states have been expecting to get the federal assistance and a majority have already budgeted for it, meaning that if the funds were blocked, cuts would have to be made elsewhere -- costing the jobs of firefighters, cops and other state employees. The House was already in recess last Thursday when the Senate passed the jobs bill. But lawmakers were more than willing to sacrifice a couple of days at home in their districts to get the bill passed, according to Frank who supports the bill.

"If people wanted longer vacations they wouldn't take these jobs," said Frank, chairman of the House Financial Services Committee. "So when we heard that the Senate had passed the bill, people were delighted because it means that you're gonna get funds for the states. You're gonna have firefighters, teachers, public works employees back, you're going to have a better level of services... people were overwhelmingly happy that we get the chance to break that deadlock."

Many of the jobs protected under this bill belong to teacher unions or the American Federation of State, County and Municipal Employees, both key parts of the Democrats' political base. But the case for action has an economic and humanitarian basis, too: Forcing layoffs at the state level counteracts federal stimulative efforts and could push the economy toward a double-dip recession. And laying off state workers, only to have them receive state unemployment checks, makes little fiscal sense.

With Democrats fighting to keep control of the House, Republicans have argued the vote is a bailout of special interests, a charge which Democrats have vehemently denied.

Frank said the meeting covered not only the jobs bill, but also talk of the November elections. "Basically [we talked about] what the president's been saying -- that people don't understand how bad things were when he came into office and how much improvement there's been. It's very frustrating when the improvement is not as much as you want," he added. "There is a determination to basically take the message that Mark Zandi and Alan Blinder just gave in their report about how the package of measures taken since early '09 has substantially improved things, although obviously not yet to where we want them."

Frank was quick to point fingers at Republicans for blocking the path to progress, charging the GOP of using obstructionism to outmaneuver Democrats and maintain the feeble state of the economy.

"I hate to have to say this," he continued, "but I think it's very clear: [Republicans] don't want to see things get better. That's why they're obstructing the small business loan bill which by every calculation they should have been for... If you looked at the numbers last week -- private sector jobs went up. Not by as much as they should have, but they went up. The job loss was because of the kind of public sector job layoffs that this bill would have avoided if it had passed a month ago. So that's the other point is that there's frustration, that [Republicans] are kind of benefiting politically from their economic obstruction."

The bill reduces the deficit by $1.4 billion, and is paid for by closing a loophole that allows U.S. companies to get a tax break for moving jobs offshore. Unions are particularly pleased about this provision.

"Not only did these Republicans vote against saving jobs in America," said AFL-CIO President Richard Trumka in a statement, "they voted to keep encouraging corporations to outsource jobs during this recession."

Opponents object that it raises taxes on U.S.-based multinational companies. "With today's vote, Congress has now added to the growing disparity between the tax policies of the United States and most other major world economies," said Johanna Schneider, a spokeswoman for the Business Roundtable.

Schneider said American companies with worldwide operations directly employ 22 million American workers and support an additional 41 million U.S. jobs through their supply chain. "Further tax hikes will hinder the ability of these companies to protect and create American jobs and will slow our nation's economic recovery," she said.

House Minority Leader John Boehner of Ohio accused the Democrats of "scampering back to Washington to push through more special interest bailouts and job-killing tax hikes."

House Democrats were quick to defend their position. Las Vegas Democrat Shelley Berkley said her constituents are in dire need of the aid. In the past year, Nevada's unemployment rate -- at roughly 14 percent -- has grown faster than anywhere else in the country.

"This is not even a negotiable vote for me; it's important," Berkley told HuffPost. "I represent Nevada. My state is near bankruptcy, we can't afford to layoff teachers, firefighters -- it's a matter of public safety; it's a matter of educating our kids... Unless we're going to have poor people dying in the streets, we've gotta figure out a way of taking care of them. And this bill addresses that."

Democrat Dale Kildee, who represents Flint, Michigan, also underscored how much his constituents need the help. "Federal government has to give assistance to the states," he told HuffPost, "and this is, I think, a well-drafted bill to serve a very useful purpose. I'm from Michigan, which is very stricken right now. There's well over 20 percent unemployment in my city."

Democrats supporting the measure, like Henry Waxman (D-Calif.) and Jim Moran (D-Va.), were particularly passionate.

"Right now we've got to get this economy back on its feet," said Moran, who represents Northern Virginia. "And the most de-stimulating part of our economy right now is state and local spending. They're cutting back and in fact in the last three months they cut about 100,000 jobs. In the last two years they've cut over 300,000 jobs. These are people who won't be able to make their mortgage payments, who won't be shopping at stores, who will be pulling the economy down..."

When asked about the provision in the bill that cuts back on food stamp programs as a way to pay for the bill, Moran was a bit more hesitant.

"Well, I mean it's not going to hurt people," he explained. (Democrats hope to stave off the cuts before they kick in four years from now.) "It's something that was inevitable. And right now our highest priority has got to [be to] keep these teachers on the job so that there'll be teachers in the classroom when kids return for school in a month."

Minutes after the bill passed, House Speaker Nancy Pelosi announced on Twitter that Obama would sign the bill into law immediately. Watch Pelosi discuss the jobs package below.

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