Lingle condemns federal bailout bill, Obama says 700 Hawaii teachers saved

HONOLULU—President Barack Obama signed the Education Jobs and Medicaid Assistance Act into law yesterday. The bill injects $26 billion into the economy—$10 billion intended to help states avoid teacher and staff layoffs in the coming school year and a $16 billion increase in funding for Medicaid reimbursements. Republicans, including Gov. Linda Lingle and Congressman Charles Djou, spoke out against the bailout, which cuts almost $12 billion for nutrition assistance to the poor beginning in 2014.

The White House projects that Hawaii will “potentially” save 700 education jobs from the $39 million the State receives.

Think tank New Foundation America blogged about how the education funds might be spent and provides a table listing the amount of jobs that would be saved in each state. According to their calculations, Hawaii would save 554 jobs.

For months, Obama and Congressional Democrats have been pushing the legislation they say would prevent as many as 160,000 teacher layoffs and 900,000 public and private sector layoffs altogether. Democrats also insist the bill is fully paid for, in part by closing tax loopholes that encourage corporations to ship American jobs overseas.

Democrats argue that, nationwide, this most recent bailout for our teachers is necessary to help school districts who have previously been using stimulus money.

The U.S. Education Department said it has been able to support 300,000 education jobs over the last two years through stimulus funding provided by the American Recovery and Reinvestment Act and that currently seven states have drawn down 100 percent of previously allocated jobs funding, while 18 states total have drawn down 80 percent or more. A July report from the independent Center on Education Policy found that 75 percent of school districts that received stimulus funds expect to cut teaching positions in the upcoming school year.

The $10 billion fund will support education jobs in the 2010-11 school year and be distributed to states by a formula based on population figures. States can distribute their funding to school districts based on their own primary funding formula or districts’ relative share of federal Title I funds.

Governor Linda Lingle issued the following statement on the passage of the $26 billion federal bailout bill:

“While the Democrats in Congress contend this latest federal bailout will not increase the national deficit, it also does nothing to reverse it or to reduce the level of government spending in Washington or at the state-level.

“What’s even more troubling is in order to pay for this latest $26 billion bailout of states, the Democrat-controlled Congress cut almost $12 billion from the Supplemental Nutrition Assistance Program (formerly known as food stamps), at a time when a record number of Americans—including almost 141,300 Hawaii residents—depend on this assistance to subsidize their food purchases.

“In addition, Congress rescinded $2.2 billion in unobligated highway funds, including an estimated $10 million that would have been used for Hawaii highway projects. 

“This federal bailout, like those that preceded it, is intended to be a one-time shot in the arm that must be paid for in the future. It merely defers the day of reckoning that will require a reprioritization of state services and a reduction of spending. Once the money is spent, states still need to figure out how to balance their budgets without federal stimulus funds.”

The governor’s argument was challenged by Associated Press’ Herbert Sample, who pointed out that Lingle, herself, requested funding for Medicaid months earlier: “Lingle and 41 other governors from both political parties signed a National Governors Association letter in February asking congressional leaders to provide the extra Medicaid funding through mid-2011 rather than allow it to lapse on Dec. 31. They also asked Congress to drop restrictions on how states managed their Medicaid caseloads.”