Monday, August 9, 2010

LOCAL NEWS: Aid bill contains $655m for Mass.

$26b measure clears key US Senate hurdle; Patrick prepares plan to restore budget cuts.

WASHINGTON — Massachusetts stands to receive $655 million in federal Medicaid and education money under an aid package that narrowly cleared a key congressional hurdle yesterday despite opposition from the Bay State’s Republican senator, Scott Brown.

Democrats said yesterday that the $26 billion aid package would fill holes in state budgets and save hundreds of thousands jobs across the country, including 2,400 public education positions in Massachusetts.

“Today the United States Senate did its job,’’ said Senate majority leader Harry Reid. “We saved people’s jobs.’’

Governor Deval Patrick, while emphasizing that the federal aid hasn’t been finalized, said he will introduce legislation to spend the money on a range of state programs that were slashed in the $27.6 billion budget for the current fiscal year, which he signed June 30.

“I can tell you that my first choice will be to support public schools and to get as many teachers back in the classroom as possible, doing what they do best,’’ Patrick told reporters yesterday. “There are obviously also needs in human services that are going unmet because of this crisis.’’

The governor and state House and Senate leaders had been counting for much of the year on the federal money as they hammered out their proposed budgets for the current fiscal year. When the aid appeared in jeopardy earlier this summer, the governor and legislative leaders made reductions in their blueprints. The budget Patrick eventually signed cut local aid by 4 percent, or $160 million, affirming a reduction reluctantly made by the Massachusetts House and Senate. The budget also slashed spending on human services — including programs for the developmentally disabled, the mentally ill, and housing support — by nearly $74 million.

Now, if the aid package receives final congressional approval, many of those cuts could be rescinded. Under the measure approved yesterday, Massachusetts would receive $450 million in federal Medicaid funding and $205 million in educational funding.

One potential wrinkle, however, is that, with the Legislature now in informal sessions for rest of the year, one lawmaker can stop action on any bill. That means a lone Republican could prevent the state from spending the money.

State Senator Steven C. Panagiotakos, the chamber’s budget chief, said he did not foresee any opposition, and he expressed optimism that Massachusetts could revive an earlier plan to spend the federal money on some 250 state programs.

“It’s a lot of human services accounts, public safety, areas that have already taken two or three cuts since this recession began,’’ said Panagiotakos, a Lowell Democrat.

Brown, who has compromised with Democrats on other major legislation, voted against the aid package because he disagreed with a provision that raises taxes on some multinational corporations.

“We can pay for that by not increasing taxes in the middle of a two-year recession,’’ Brown said in an interview after the vote. “Do we do it the way we’ve done it in the past? Or do we try to find different ways to find monies that are already in the system to pay for these things?’’

Brown prefers a plan to divert $35 billion in unspent money from last year’s federal stimulus to pay for the aid package and other items. A similar proposal by Brown in the past has failed to gain widespread support.

The vote yesterday was not final but was widely considered the key step that will lead to passage. The Senate voted, 61 to 38, to overcome a Republican-led filibuster, one vote more than needed. The aid measure is expected to win final Senate approval by a similar margin in another vote today, and then the legislation would be sent to the House.

In a sign of the importance Democrats place on the bill, House Speaker Nancy Pelosi promptly called House members back to Washington from summer recess to vote next week on the aid package.

US Representative Barney Frank, a Newton Democrat, said the anticipated passage of the federal aid was the best form of economic stimulus, and would boost the economy. “I’m very optimistic we’ll pass it next week,’’ he said.

President Obama, in a statement, called yesterday’s Senate vote “an important step toward ensuring that teachers across the country can stay in the classroom and cash-strapped states can get the relief they need.’’

While Brown refused to sign on to the legislation, two other New England Republicans broke ranks to support the aid package: Susan Collins and Olympia Snowe, both of Maine, who have shown willingness to compromise with Democrats on jobs bills in the past.

Collins and Snowe had expressed concerns about an earlier version of the legislation, in part because it would have cut $107 million from Navy shipbuilding, which is one of their state’s major industries. Collins wanted the provision struck from the bill, and Reid agreed to remove it, according to Collins’s spokesman Kevin Kelley. A spokesperson for Snowe could not be reached.

The aid package provides $16 billion to ease Medicaid costs for states, and $10 billion to prevent cuts in public education. The package is paid for through federal spending cuts and a tax increase on multinational corporations. The nonpartisan Congressional Budget Office said the bill would cut the federal deficit by $1.4 billion over the next decade.

“It’s taken far too long to pass this legislation, but today we broke through the gridlock and finally voted to protect jobs, and make sure our kids start the school year right,’’ said Senator John F. Kerry, the Massachusetts Democrat, in a statement after the vote.

Republicans criticized the aid package as partisan legislation designed to win favor with public employee unions, a major constituency of the Democratic Party, while also encouraging multinational companies to move jobs overseas.

“The essence of this bill is to pay off education unions,’’ said Senator Judd Gregg, a New Hampshire Republican. “The way they paid for it is by penalizing job creators. This bill is a job outsourcer.’’

Senator Charles Schumer, Democrat of New York, argued that the country’s fragile economic recovery cannot afford a flood of thousands of laid-off teachers and firefighters, if Congress failed to act.

“If there’s only one issue for which we can find common ground this year, it should be jobs,’’ Schumer said.

Mark Arsenault and Michael Levenson Boston Globe August 5, 2010

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