President Barack Obama urged House lawmakers to pass a $26 billion jobs bill Tuesday morning in an effort to push through a key component of his election-year economic agenda.
House Speaker Nancy Pelosi (D-Calif.) recalled House lawmakers Tuesday for an emergency vote on the bill just as they were settling into the six-week summer recess. The bill is designed to prevent teachers and other municipal workers from being laid off.
Democrats say the legislation would save the jobs of 160,000 teachers across the country, as well as 150,000 first-responders, including police officers and firefighters. The measure would also provide billions in Medicare aid for cash-strapped states. In addition, the bill would provide $600 million for enhanced border security.
300,000 Jobs on the Brink
"We can't stand by and do nothing while pink slips are given to the men and women who educate our children or protect our communities," Obama said in a Tuesday morning speech in the Rose Garden. "That doesn't make sense. If we do nothing, these educators won't be returning to the classroom this fall."
Democrats view the measure as a critical step to save the jobs of hundreds of thousands of teachers, police officers and firefighters -- a move that would inject a boost of stimulus funding as the economy sputters. House Republicans oppose the measure as a handout to teachers' and municipal unions.
"As millions of children prepare to go back to school -- many in just a few days -- the House will act quickly to approve this legislation once the Senate votes," Pelosi said in a statement last week. "In consultation with our leadership, I am calling members of the House back to Washington at the beginning of the week to pass this bill and send it to President Obama without further delay."
Senate Democrats approved the $26 billion measure last week. Once the House passes the bill, it will be sent to Obama, who has pledged to sign it. The bill would allocate $16 billion to help states with Medicare payments and $10 billion to keep teachers on the job, just in time for the resumption of classes for millions of students.
Economist: Aid to States Is Effective Stimulus
Gus Faucher, an economist at Moody's Analytics, (formerly Moody's Economy.com), says the measure is a good idea and if anything, it doesn't spend enough money.
"We think that the economy could actually use even more stimulus," Faucher tells DailyFinance. "The economy is growing, but not fast enough. There is the possibility of a double-dip recession, and this would help alleviate that."
Faucher says aid to state and local governments is among the most potent stimulative tool in the federal government's arsenal. Such assistance "is a particularly effective stimulus because you get more bang for your buck," Faucher says. "We estimate that for every dollar in state and local spending you get $1.41 back in the form of economic stimulus."
GOP: Just Another Union Handout
Republicans portrayed the bill as yet-another attempt at economic stimulus, which they say has thus far failed to revive the economy as Obama and Democrats had promised. "The American people don't want more Washington 'stimulus' spending, especially in the form of a payoff to union bosses and liberal special interests," House Minority Leader John Boehner (R-Ohio) said in a statement.
Republicans have seized on the deficit as their key election-year issue, but Faucher says in the short term, fiscal concerns pale in comparison to jump-starting the economy. "It's more important to get the economy going again, and then in a year or two we'll worry about the deficit," says Faucher.
Democrats, meanwhile, accuse Republicans of thwarting a common-sense bill to keep teachers, police officers and nurses on the job. "Why wouldn't House Republicans want to keep 310,000 teachers, first responders and private-sector workers on the job instead of on the unemployment lines?" Pelosi said Monday.
The House is scheduled to vote on the bill Tuesday afternoon.
Take the first steps to building your portfolio.View Course »