Democrats seek GOP help for last-ditch jobs bill

[August 04, 2010]  WASHINGTON (AP) -- A $26 billion measure to help states and local school boards with their severe budget problems faces a make-or-break vote Wednesday as Senate Democrats try one last time to advance their faltering jobs agenda.

The bill 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 a GOP filibuster comes after Democratic leaders made final tweaks to the measure in hopes of winning 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.

It's 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.'"

Democratic Colorado Gov. Bill Ritter said he had already accounted for a six-month increase in federal funding for Medicaid when putting together the state's budget for the coming year. If Congress does not provide that additional money, "that means making $211 million in cuts immediately," Ritter said.

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

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.

Democrats, who control the chamber with 59 votes, will need to pick up at least one Republican to muster the 60 required to defeat the GOP filibuster.

Collins has been a past supporter of giving states help with their budgets and was the driving force behind an aid package enacted in 2003 that added $20 billion to the deficit. Now, she's both concerned about the deficit and the means used by Democrats to address those concerns.

"It was a different situation," Collins said. "We didn't have a deficit of $1.5 trillion."

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.

[Associated Press; By ANDREW TAYLOR]

Associated Press writer Kevin Freking contributed to this report.

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