Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

$26 billion for states passes key test vote

By Tami Luhby, senior writer


NEW YORK (CNNMoney.com) -- The Senate overcame a key procedural hurdle Wednesday to send $26 billion more in federal aid to cash-strapped states.

The measure, which passed by a 61-38 vote, contains $16.1 billion in additional Medicaid money and $10 billion to prevent layoffs of teachers and first responders.

State officials have been desperately lobbying their representatives, saying they need the money to shore up their budgets. About 30 states had already included the additional Medicaid funds in their fiscal 2011 budgets, which began July 1, and would have to cut further if it doesn't come through. The bill is expected to save 290,000 jobs, according to Senate Democrats.

President Obama also weighed in Monday, asking lawmakers to pass the additional assistance to the states, which has been kicking around Congress in various forms for months.

Senate Democrats needed to garner at least 60 votes for the measure to pass this initial vote, meaning some Republicans had to cross the aisle. That help came in the form of Maine Republicans Susan Collins and Olympia Snowe.

A final vote could come late in the week, just before the Senate is scheduled to recess for the long August break. The chamber will vote before it leaves town, a Senate Democratic leadership aide said.

The measure would then have to go back to the House, which has already recessed. But Speaker Nancy Pelosi, D-Ca., said in a statement that she would call the chamber back into session early next week.

The Senate was originally scheduled to vote on the measure on Monday, but Reid pushed it back to amend the legislation after learning it would increase the deficit by $4.9 billion despite offset measures. The amended bill reduces the deficit by $1.4 billion.

The GOP, however, is not taking kindly to sending more aid to the states, saying the original $787 billion stimulus package was meant to do that.

"The trillion dollar stimulus bill was supposed to be timely, targeted and temporary," said Sen. Mitch McConnell, R-Ky. "Yet here we are, a year and a half later, and they're already coming back for more. The purpose of this bill is clear: it's to create a permanent need for future state bailouts, at a time when we can least afford it."

Congressional producers Ted Barrett and Deirdre Walsh contributed to this report. To top of page

Index Last Change % Change
Dow 15,973.84 313.66 2.00%
Nasdaq 4,337.51 70.67 1.66%
S&P 500 1,864.78 35.70 1.95%
Treasuries 1.75 0.10 6.33%
Data as of 7:08pm ET
Company Price Change % Change
Bank of America Corp... 11.95 0.79 7.08%
General Electric Co 28.26 0.81 2.95%
Cisco Systems Inc 25.11 0.43 1.74%
Chesapeake Energy Co... 1.59 -0.19 -10.67%
Freeport-McMoRan Inc... 5.53 0.64 13.09%
Data as of Feb 12
Sponsors

Sections

Antonin Scalia's death leaves the Supreme Court with eight justices to decide dozens of remaining cases. The pending docket includes a number of matters of interest to businesses, workers and investors. More

India's finance minister isn't worried about jobs being lost in the country's manufacturing sector despite warnings that industrial robots will dramatically reduce the need for factory workers in coming decades. More

Eastern Illinois University laid off 198 staff members this week, and the college president is blaming the state government. More