Senate advances stimulus plan

Tuesday, February 10th, 2009 at 8:31 pm by

On Tuesday, the U.S. Senate passed its version of a federal stimulus bill. Senate leaders had struggled to gain the 60 votes needed to close debate and secure passage.

The bill passed with 61 votes – 56 Democrats, three Republicans, and two independents.

To gain the votes, Senate Democrats were forced to cut several education initiatives from their original proposal, which closely resembled the version previously passed by the House of Representatives.

Now that both houses have passed bills, a conference committee will be convened to resolve differences. Leaders are aiming to have a bill pass both houses and on President Obama’s desk by Monday – Presidents’ Day.

The cuts in the Senate bill eliminated all funding for school construction and cut the state “stabilization fund” from $79 billion to $39 billion. The purpose of the stabilization fund is to enable states to reduce or avoid budget cuts, with priority given to education and higher education.

The Senate bill preserved nearly all the planned increases in federal aid for Title I services to disadvantaged students and special education pursuant to the Individuals with Disabilities Education Act. The Senate bill would increase IDEA funding by $13.5 billion nationwide, as would the House, and increased Title I aid by $12.4 billion, $600 million less than the House.

Our national affiliate, the American Association of School Administrators, has a good side-by-side comparison of the spending levels for education programs in the two houses’ bills.

The decision to cut the stabilization fund while essentially preserving the Title I funding is puzzling, on at least two fronts.

First, the stabilization fund would be more useful in preserving jobs in schools. Maintenance of effort requirements for the Title I increase would largely preclude its use for that purpose.

It’s also puzzling that the compromise resulting in this funding arrangement was brokered by a Democratic Senator from Nebraska and a Republican from Maine – two states that are not major beneficiaries of Title I funding.

Both houses do propose increases in the federal match for Medicaid. This increase is envisioned as providing general fiscal relief to states, enabling them to avert either tax increases or spending cuts – in health care and in other areas.

The Buffalo News summed up the impact of the Senate bill with an article titled, “New York loses millions, in Senate stimulus bill.” But the National Education Association estimates that New York would lose over $3 billion compared to the House plan due to the Senate’s cut to the stabilization fund and its elimination of school construction funding.

Congressional Republicans have been critical of the spending components of the stimulus bill, favoring tax cuts instead.  But there are valid arguments for public spending.  Consumers are saving, not spending right now — taking money out of the economy.  So tax cuts may get saved as well.

We’ve calculated that there could be 18,000 or more school positions eliminated if the Governor’s budget is adopted, many through layoffs.  Keeping those people in the workforce, spending money could have a bigger economic benefit than some tax cuts, in addition to the benefits for schooling.

A generally conservative commentator warns that mass layoffs could harm teaching quality — because of the seniority rules in collective bargaining agreements often force districts to eliminate the jobs of recently hired teachers who may be more effective than veteran colleagues.

This entry was posted on Tuesday, February 10th, 2009 at 8:31 pm and is filed under National Policy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Tags: