In an emergency session of Congress that cut into summer recess, the House on Tuesday approved a $26.1 billion federal aid package intended to help states bridge budget gaps and preserve teaching jobs.
The House passed the measure 247-161, clearing it for the signature of President Obama, who said the bill “will save hundreds of thousands of additional jobs in the coming year.”
Most Republicans voted against the legislation, calling it another stimulus measure that will do nothing to help lower the nation's 9.5 percent unemployment rate while making cash-strapped states more dependent on federal help.
Funding for the bill is supposed to come from future cuts to the food stamp program and tax increases on multinational businesses.
“This is a permanent tax increase on job creators in exchange for a temporary fix for the states,” said Rep. Bob Goodlatte, R-Va.
The legislation includes $10 billion for school systems and $16.1 billion to extend by six months a federal program that helps state governments pay for Medicaid services.
For months, most of the nation's governors have been clamoring for the extra Medicaid cash, and approximately 30 states built their 2011 budgets on the assumption that the Medicaid program, set to expire at the end of the year, would be extended. The remaining 20 states either made cuts to their budgets to make up for the potential shortfall or their legislatures were not in session and the money was never factored into their budgets.
California budgeted $1.5 billion in the expectation that the federal aid program would continue six more months.
Arizona is among the states that did not count on the extension and instead eliminated some of the coverage for the state's health insurance program for children and reduced funding for Medicaid recipients.
“If the federal government continues bailing out out the states, it will send them the message that they do not need to be prudent with their own money,” Rep. John Shadegg, R-Ariz., told The Washington Examiner.
Tuesday's debate on the bill revived the battle between Democrats and Republicans over the value of more stimulus spending.
“This is a vote for jobs, for education and for health care,” said House Energy and Commerce Committee Chairman Henry Waxman, D-Calif. “This will help states avoid the massive cuts in Medicaid eligibility, benefits and payments to providers.”
Republicans said Congress should instead be focused on tax cuts for small businesses in order to generate more job growth in the private sector.
“For the American people watching what is going on in Washington, I think this is clear evidence to the fact that there is a huge divide in terms of the vision that belongs to each party,” said House Minority Whip Eric Cantor, R-Va.