By Larry Jones
May 24, 2010

Despite garnering 161 cosponsors, the path forward for the Local Jobs for America Act, H.R. 4812, remains murky as fear grows that the $75 billion included in the measure to provide flexible aid to local communities could get jettisoned.

With the backing of the White House, Education Secretary Arne Duncan sent a May 18 letter to House Speaker Nancy Pelosi (CA) and Senate Majority Leader Harry Reid (NV) expressing grave concern about the ongoing budget challenges at the state and local levels that threaten hundreds of thousand of teacher jobs. In the letter, Duncan urged that $23 billion be included in the supplemental spending bill that is expected to be taken up in the coming weeks to fund military operations in Afghanistan and other urgent needs. He said the funds are needed to help state and local communities avoid large-scale teacher layoffs in the upcoming school year. Duncan also urged support for an additional $2 billion to help local communities fund police officers and firefighters jobs and $1 billion for early childhood education jobs.

The $25 billion for teachers, police officers and firefighters is included as part of the $100 billion Local Jobs for America Act, H.R. 4812, which was introduced last March by House Education and Labor Chairman George Miller (CA) with the backing of the U.S. Conference of Mayors, the National League of Cities and the National Association of Counties. The remaining $75 billion, which the Administration's letter did not mention for inclusion in the supplemental bill, would provide direct aid to local governments to help them avoid further layoffs of jobs government-wide. Unlike funding to support jobs in the supplemental, members are likely to insist on revenue offsets for the cost of programs not included in the supplemental.

In the Senate, Senator Tom Harkins (IA), Chair of the Appropriations Panel for Education, has also introduced a proposal that would provide an additional $23 billion for education by extending federal aid under the economic stimulus package for an additional year to help local communities avoid widespread layoffs of teachers. No funds were included to assist local governments with other jobs categories facing significant layoffs.

Commenting on the move to only include a portion of the jobs package in the supplemental, Conference of Mayors President Burnsville (MN) Mayor Elizabeth B. Kautz said, “While I am in favor of helping save the jobs for our teachers, police officers and firefighters, there are many other critical jobs that face the same threat at the local level including health care workers, public works, transportation/transit workers, inspection, economic development and sanitation workers just to name a few. It is important for our leaders in Washington to understand that local communities are facing a severe fiscal crisis and we need help addressing a broad variety of needs as we recover from the worse recession since the Great Depression.”

While Chairman Miller supports including funds in the supplemental bill for teachers and public safety jobs, he has not given up on winning support for the $75 billion portion of the bill that would provide direct aid to local governments. To support his case he cited a recent independent analysis conducted by Economic Policy Institute that found that in over half of the $75 billion in cost, $39 billion would be offset because it would keep an estimated 675,000 taxpayers on the payrolls while reducing the level of spending on unemployment benefits, health insurance benefits for unemployed workers, food stamps and other social safety net programs. “This analysis confirms that keeping Americans working is more beneficial to our economy than handing them a pink slip,” Miller said. The analysis also found that the legislation would create an estimated 150,000 additional jobs that would be supported by the spending of workers whose jobs were directly created or saved.