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It is very important to bear in mind that the Senate proposal- that has not yet been voted on - differs from the House proposal that passed in Washington on the 28th. The allocations & distribution methods of fund for schools may wind up differently than that in the House proposal.We continue to report to you on this 'work in progress' so that you are informed. In the end, there will have to be a compromise solution that emerges from this federal legislative process. GSCS will keep you up to date and informed. Again, the attached articles refer to the House proposal; the Senate proposal is thought to be up for a vote next week. President Obama is pressing the Congress for quick passage - perhaps mid-February - so that the stimulus can begin to help move the economy as soon as possible. NOTE: if your district is planning on school construction in the near future it is advisable to cross your "T's" and dot your "i's" now so that your district may be ready and in line for any funding that could come its way due from the stimulus package.
New York Times January 29, 2009
(Education noted in bold red font below)
January 29, 2009
News Analysis
Stimulus Components Vary in Speed and Efficiency
WASHINGTON — At first, it will trickle into paychecks in small, barely perceptible amounts: perhaps $12 or $13 a week for many American workers, in the form of lower tax withholding.
For the growing ranks of the unemployed, it will be more noticeable: benefit checks due to stop will keep coming, along with an extra $25 a week.
At the grocery store, a family of four on food stamps could find up to $79 more a month on their government-issued debit card.
And far bigger sums will appear, courtesy of Washington, on budget ledgers in state capitals nationwide: billions of dollars for health care, schools and public works.
There is no doubt that the impact of the $819 billion economic stimulus package advanced by President Obama and approved by the House on Wednesday will start to be felt within weeks once the final version becomes law.
But estimating how effective the huge program of tax cuts and spending will be in getting America’s economic engines humming again is a far more complex calculation requiring almost line-by-line scrutiny of the 647-page bill, lawmakers, economists and policy analysts say.
While it may be difficult to predict how well the overall plan will work, it is easier to draw conclusions about its individual components, gauging them against the basic goal of any stimulus: to promote economic activity and create jobs as quickly and efficiently as possible.
Devising any economic stimulus plan is tricky: initiatives that can be carried out relatively fast, like tax cuts, tend to provide less bang for the buck in terms of generating jobs and economic growth, while initiatives likely to spur more robust activity, like public works projects, can take so long to get under way that they arrive too late.
Tax Cuts
The provisions intended to have the swiftest impact are the tax cuts, totaling $275 billion, roughly a third of the package.
Republicans say the cuts are too small, some Democrats say they were ill designed in a vain effort to appease House Republicans, and some economists say both sides are right: that the plan should include more effective tax cuts and more of them, and also address specific problems like the weak housing market.
Mr. Obama’s signature tax cut would provide a credit of up to $500 for individuals and $1,000 for couples. It won praise in an analysis by the Tax Policy Center, a nonpartisan research group, because it could be carried out quickly, by reducing the amount of money withheld from paychecks.
But the same group also criticized it because it would help families earning as much as $150,000 a year, who are more likely to save than spend. (Saving, or paying off debt, might make sense for individual households, but what the economy needs most is for people to spend money, helping stores to sell more, factories to produce more and employers to avoid cutting additional jobs.)
Some experts say adjusting withholding rates could prove complicated, delaying the money. But the White House says the plan would work even better than a lump-sum rebate; some research suggests that rebate checks are more likely to be saved than tax reductions spread out over a length of time.
Even some economists who generally support the stimulus think that the main tax proposal would provide limited economic lift.
“People are going to spend 30, 40 cents on the dollar, so the multiplier is going to be low,” said Adam S. Posen, deputy director of the Peterson Institute of International Economics.
Aid to States
One area where analysts say the bill would be relatively effective is in providing assistance to states, many of which, to comply with balanced-budget requirements, are facing the prospect of steep cuts in jobs and services. Aid to states does not expand economic activity, but it helps prevent cuts that would make the downturn even worse.
An $87 billion provision increasing the federal contribution for Medicaid costs is expected to go a long way to help states close their budget gaps.
But there has been little discussion so far on a proposal by the Senate Republican leader, Mitch McConnell of Kentucky, that aid to states be provided in the form of loans, encouraging them to spend the money wisely and, once the economy rebounds, obligating them to help reduce the national debt.
The bill would also create a $79 billion state fiscal stabilization fund, disbursing half the money in late 2009 and half in late 2010. The Congressional Budget Office has estimated that little of that money would be spent this year.
Infrastructure
The greatest prospect of delay in spending is on infrastructure. The bill provides $30 billion for highway construction and tens of billions more for other transportation projects, water projects, park renovation, military construction, local housing projects and more.
A Congressional Budget Office analysis found that only 64 percent of the bill’s spending would be completed within 19 months, and spending on construction projects was among the slowest.
If the economic recovery is slow, that timing could work out perfectly, giving the economy a jolt just when faster-acting components are wearing off. But if there is a quicker-than-expected rebound, many of those projects could start just in time to compete with renewed private spending.
Then there is the risk that the projects themselves have little or no long-term economic value and simply drive up the budget deficit. Democrats bowed to Republican pressure on Tuesday and stripped from the bill a $200 million provision for National Mall restorations.
Education, Health Care And Alternative Energy
A look at more than $140 billion in the bill’s spending on education finds some that can move quickly — for instance, $13 billion each over two years for Title I schools, which serve impoverished students, and for special education under the Individuals With Disabilities Education Act.
But also included are programs that even under the most optimistic timetable will take longer to complete, like $20 billion for school renovations. These would provide little near-term help for the economy.
Similar scrutiny could be trained on health care and especially on alternative energy programs. Like some of the education spending, a large chunk of health care spending would not start until 2012 or later, when, most experts think, the recession will be over.
Automatic Stabilizers
Unemployment benefits and food stamps are such useful stimulus tools that budget analysts refer to them as “automatic stabilizers.”
They are built into the system, allowing money to flow quickly to people who need it and are likely to spend it.
The House bill would spend $20 billion over five years on added food stamps. If the recovery legislation is adopted by mid-February, officials say, the first added food stamps will be delivered in April and nearly all of that aid used that month.
The legislation would also devote roughly $43 billion over two years to extend and increase unemployment benefits. The provision would add as much as 33 weeks of benefits, for states with the highest unemployment rates.
House Passes Stimulus Plan Despite G.O.P. Opposition
WASHINGTON — Without a single Republican vote, President Obama won House approval on Wednesday for an $819 billion economic recovery plan as Congressional Democrats sought to temper their own differences over the enormous package of tax cuts and spending.
As a piece of legislation, the two-year package is among the biggest in history, reflecting a broad view in Congress that urgent fiscal help is needed for an economy in crisis, at a time when the Federal Reserve has already cut interest rates almost to zero.
But the size and substance of the stimulus package remain in dispute, as House Republicans argued that it tilted heavily toward new spending instead of tax cuts.
All but 11 Democrats voted for the plan, and 177 Republicans voted against it. The 244-to-188 vote came a day after Mr. Obama traveled to Capitol Hill to seek Republican backing, if not for the package then on other issues to come.
Mr. Obama, in a statement hailing the House passage of the plan, did not take note of the partisan divide but signaled that he expected changes to be made in the Senate that might attract support.
“I hope that we can continue to strengthen this plan before it gets to my desk,” he said. “But what we can’t do is drag our feet or allow the same partisan differences to get in our way. We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do.”
Mr. Obama followed the House vote with a cocktail party at the White House for the Congressional leaders of both parties, from the House and the Senate. The House Republicans, including the minority leader, Representative John A. Boehner of Ohio, were fresh from their votes against the recovery package.
The failure to win Republican support in the House seemed to echo the early months of the last Democratic administration, when President Bill Clinton in 1993 had to rely solely on Democrats to win passage of a deficit-reduction bill that was a signature element of his presidency.
Mr. Obama’s chief of staff, Rahm Emanuel, had met Tuesday night at the White House with 11 moderate House Republicans, none of whom ended up supporting the bill. “The most important number here for this recovery plan is how many jobs it produces, not how many votes it gets,” Mr. Emanuel said.
As Senate Democrats prepare to bring their version of the package to the floor on Monday, House Democrats and the administration indicated they would ultimately accept a provision in the emerging Senate package that would adjust the alternative minimum tax to hold down many middle-class Americans’ income taxes for 2009. The provision was not in the House legislation.
Its cost would drive the overall package’s tally to nearly $900 billion. That would exceed the roughly $850 billion limit that Mr. Obama has set for Congress, House Democratic leadership aides said, and leave no room for other proposals that senators of both parties are poised to seek during Senate debate next week.
While the House and Senate measures are similar, they are most likely to differ in ways that could snarl negotiations between Democrats from the two chambers, and delay getting a measure to the president. In particular, House and Senate Democrats are split over how to divide $87 billion in relief to the states for Medicaid, with senators favoring a formula more beneficial to less-populous states.
Democrats’ own differences aside, they also are under pressure from the White House to be open to proposals from Senate Republicans who might support the final legislation if their interests are accommodated, and which might draw a few Republican supporters on a final vote next month in the House.
The provision on the alternative minimum tax, for example, was a priority for Senator Charles E. Grassley, Republican of Iowa, who added it Tuesday in the Finance Committee’s work on the legislation.
Democrats’ goal is to have the stimulus package, which is roughly two-thirds new spending and one-third tax cuts, to Mr. Obama’s desk for his signature by Feb. 13, before Congress breaks for Presidents’ Day.
“He said he wanted action, bold and swift, and that is exactly what we’re doing today,” Speaker Nancy Pelosi, Democrat of California, said as debate began.
Democrats voluntarily dropped from the package several provisions that Republicans had singled out for derision in recent days, including money to restore the Jefferson Memorial and for family planning programs. But the day’s debate contrasted with the president’s conciliatory gestures.
Representative Virginia Foxx, Republican of North Carolina, said that former President George Bush’s signature tax cuts in 2001 had created years of growth but that the nation’s problems started when Democrats regained majorities in Congress in the 2006 elections.
Representative Steny H. Hoyer, Democrat of Maryland and the majority leader, said that “the economics that got us into this mess” were the Republicans’ policies for the six years that Republicans controlled both the White House and Congress, through 2006.
The House voted down several Republican proposals, including a substitute package made up entirely of tax cuts for individuals and businesses. Republicans did not say how much their package would cost, although Mr. Boehner said it would be far less than the Democratic plan. That tax-cut-only approach was defeated on a mostly party-line vote of 266 to 170; two Democrats joined all but nine moderate Republicans in voting for the Republican plan.
By another near-party-line vote, 270 to 159, the House rejected a Republican plan to delete a number of spending programs, including several representing top campaign promises of Mr. Obama, and to add instead $36 billion for highway construction, more than doubling the $30 billion in the bill, and $24 billion for Army Corps of Engineers projects.
After the final vote, Representative Eric Cantor of Virginia, the second-ranking House Republican, called the Democratic package “a spending bill beyond anyone’s imagination.”
Some Democrats seemed surprised that no Republicans voted for the measure.
“Not one person felt his or her district needed to have any of this assistance?” Representative Rosa DeLauro, Democrat of Connecticut, asked of the Republicans. “That can’t be.”
Brad Woodhouse, president of the union-supported, pro-Democratic group Americans United for Change, e-mailed a statement condemning the Republicans’ opposition under the subject line “Political Suicide.”
January 29, 2009
Klein Implores Legislators to Reduce Cuts to Schools
ALBANY — Joel I. Klein, the New York City schools chancellor, pleaded with state lawmakers on Wednesday to reduce proposed budget cuts and to give the city more flexibility in how state aid is spent, saying that as things stand, the schools could have to lay off 15,000 employees, many of them teachers, next year.
Testifying at a joint hearing of the Assembly Ways and Means Committee and the Senate Finance Committee, the chancellor said the school system now faces a $1.4 billion shortfall from its 2009-10 budget: $700 million in state cuts, $500 million in city cuts and $200 million in what he described as increases in “additional obligations,” including salary increases and special-education mandates.
The chancellor implored lawmakers to reconsider a proposed $84 million cut from the current school year’s budget, saying the move could “really wreak havoc.” And while a stimulus package from the federal government could “ameliorate” the school system’s budget crunch, he said, it would not eliminate the problem.
But his most controversial request was for greater flexibility in how the city and its 1,499 schools can spend new state money mandated by a court order after a long-running lawsuit. The Legislature has required that some of that money be spent on certain efforts, like reducing class sizes, and in particularly needy schools.
“You’ve got to give our schools more flexibility,” Mr. Klein said. “If you try to constrict it and say, ‘You’ve got to spend it on new programs, not cover old programs,’ were going to create more problems.”
Mr. Klein warned that without such flexibility, many schools serving middle-class children could suffer disproportionally.
“When you’re talking about a growth time, giving more money to high-poverty, high-needs schools is a good strategy, and I’ve supported that,” he said. “But in a cut time, you want the cuts to be equitable. I want to be responsible to all 1.1 million kids and their parents.”
Billy Easton, executive director of the Alliance for Quality Education, an advocacy group, said he hoped that lawmakers refused the chancellor’s request to give the school system more spending flexibility.
“The greater needs of needier kids don’t change with the economy,” he said.
“To say that a bad economy is a reason not to do more for the highest-needs kids, it just doesn’t make any sense.”
Last spring, legislators balked when Mr. Klein made a similar plea for greater freedom on how to spend certain portions of state aid.
If legislators were receptive to Mr. Klein’s entreaties on Wednesday, they did not indicate it. Several questioned the chancellor on how budget cuts would affect class sizes, an issue that many parents are passionate about but that the Bloomberg administration has not made a priority, and raised what is poised to be a hot topic in Albany in the months to come: the fate of a 2002 law, which expires at the end of June, giving New York City’s mayor control of its schools.
Assemblyman Herman D. Farrell Jr., chairman of the Ways and Means Committee, said he was troubled that under mayoral control, parents had little say in policy decisions, a situation he described as “a silencing of the lambs.” Mr. Farrell also said the chancellor and Mayor Michael R. Bloomberg were too closely aligned. “You’ve got to have tension” between the two positions, he said. Mr. Farrell, a Manhattan Democrat, suggested a new position, which he described as “subchancellor or superchancellor or uberchancellor,” to ensure two distinct voices.
