Obama Pushes for More State Aid

In a letter, Obama called for Congress to continue giving states a higher matching rate for Medicaid health insurance expenses. That aid would continue help to states that first came in last year’s economic stimulus law. Obama also pushed lawmakers to set up a fund to prevent layoffs of teachers. He said those measures were some of the most cost-effective ways of spurring the economy.

Already this year, roughly 84,000 jobs have been lost in state and local governments, despite those governments taking “difficult steps to balance their budgets,” Obama wrote.

“If we allow these layoffs to go forward,” the president warned, “it will not only mean hundreds of thousands fewer teachers in our classrooms, firefighters on call and police officers on the beat, it will also mean more costs helping these Americans look for new work, while their lost paychecks will mean less tax revenues and less demand for the products and services provided by other workers.”

But the calls for more spending got a chilly reception on Capitol Hill. House Republican Leader John Boehner of Ohio criticized the idea on ABC News’ “This Week,” The Wall Street Journal noted. “It’s just putting more debt on the backs of our kids and our grandkids,” Boehner said. “The American people want spending cut now.” Steny Hoyer, the Number Two Democrat in the House, was quoted in the Washington Post saying it has been hard to find votes for the proposals because of “spending fatigue” among members of Congress.

At least 30 states drafted their budgets for next year assuming that Congress would extend the higher Medicaid reimbursement rates, The New York Times reported.