(Updates with breakdown of aid request in third paragraph.)
By Roger Runningen
June 13 (Bloomberg) -- President Barack Obama is urging Congress to pass a jobs bill to avoid layoffs of teachers, firefighters and police and maintain the U.S. economic recovery.
“We cannot afford to slide backward,” Obama said in a letter to Congress yesterday. “We must take these emergency measures.”
Obama is supporting a measure pending in the Senate that also would increase taxes on buyout fund managers and take other steps to shore up the economy. He is requesting $23 billion for teachers and other public-service workers and $25 billion for additional federal Medicaid funding for the states, said Ken Baer, a spokesman for the Office of Management and budget.
The president cited strains on state budgets brought on by unemployment, foreclosures and declining revenue. About 84,000 jobs have been lost at state and local levels so far as governments try to balance budgets.
“If additional action is not taken, hundreds of thousands of additional jobs could be lost,” he said in the letter.
Such conditions leave a “mounting employment crisis at the state and local level that could set back the pace of our economic recovery,” Obama said.
The Senate package under consideration calls for trimming a House-passed tax increase on investment fund managers, quintupling a levy on oil companies and sending an additional $24 billion to state governments to help fill holes in their budgets.
Unemployment Benefits
Other provisions would extend unemployment benefits, restore a series of tax cuts, extend municipal bond subsidies and increase Medicare payments to doctors.
Senate Republican Leader Mitch McConnell of Kentucky, one of the recipients of Obama’s letter, issued a statement last night saying the president is failing to address the need to bring federal spending under control.
“We have a debt crisis, a jobs crisis, a housing crisis, a financial crisis, and an oil spill that the American people clearly don’t believe government is effectively responding to,” McConnell said. “So you can understand the American people’s skepticism when they’re told that simply adding more government is the solution to government’s previous failures.”
House Majority Leader Steny Hoyer, a Maryland Democrat, said there is “spending fatigue” in Congress, though he also said money is available from the $862 billion stimulus program passed by Congress last year.
‘Deep Ditch’
“You cannot not continue to stimulate an economy that is still struggling to get out of the deep ditch that we found it in about 18 months ago,” Hoyer said today on ABC’s “This Week” program. “Nobody wants to see 300,000 teachers or fire or police laid off.”
Representative John Boehner of Ohio, the Republican leader in the House, said the money shouldn’t be approved without cuts elsewhere in the budget.
“The spending spree in Washington is continuing to run unabated,” Boehner said on ABC. “To move this without finding other offsets in spending, I think, is irresponsible. It’s just putting more debt on the backs of our kids and our grandkids.”
--With assistance from Brian Faler, Ryan Donmoyer and Susan Decker in Washington. Editors: Mark Rohner, Laurie Asseo.
To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net
