For a week, Senate Republicans have been blocking a jobs and small business bill, as well as aid to states. That led to the tricky parliamentary move Harry Reid pulled last night, as David described earlier.
Harry Reid will move to strip out the text of an FAA authorization bill and substitute instead language to address the additional domestic spending that was itself stripped out of the supplemental appropriations bill the other day. That's $10 billion for teacher job retention and $16.1 billion for FMAP (Federal Medical Assistance Percentage) payments. (That's Medicaid money for the states.) Like the House did and appears to be doing again, the Senate will now isolate out a popular piece of a bill that's stalled and try to get that to a vote.
That's where the Solomon's choice comes in. Republicans--particularly those "moderates" Snowe, Collins, and Brown--have forced this absolutely critical funding to save jobs in the states to be offset. In other words, the money has to come from somewhere else. The Hill explains where it's coming from.
The entire cost of the bill is covered by offsets, such as a provision to end tax credits on corporate foreign-earned income. Closing the foreign income tax credits will raise $9 billion in revenue.
Democrats will also make $8.4 billion in spending recissions. Another $6.7 billion will come from cuts to the Supplemental Nutrition Assistance Program (SNAP).
Supplemental nutrition assistance is also known as food stamps. Ezra has a good explanation of how this came about.
Some background: The Recovery Act included an immediate 13.6 percent increase in food stamps (which are now known as SNAP). That increase equals out to a maximum of $80 per household -- and these are not rich households. But the price of food has leveled out, and in some cases decreased, in the recession. Meanwhile, the number of people who needed help skyrocketed to more than 40 million. For that reason, the program's costs ballooned from an expected $20 billion to about $65 billion. The new price tag scared some, so people began talking about cutting the benefits back.
And here we are. Democrats needed to offset spending on two worthy, important programs. So they're cutting another important, worthy program. But you really can't think of a worse program to cut than SNAP. SNAP is an extraordinarily well-targeted stimulus. It goes to poor households, for something they need to buy. According to Mark Zandi's numbers, it's literally the most stimulative way to spend a dollar: Better than state and local aid, or unemployment insurance. You get more than $1.70 of economic activity for each buck you put in.
Those "moderate" Republicans are forcing Reid to rob the nutrition program in the future to prevent even more massive layoffs at the state level now. As Ezra says, this is a very hard choice, one which the same Republicans who want to extend the Bush tax cuts to the country's richest people are forcing. Dems have to deal with it, since they are held hostage to the filibuster, to try to save at least some of the jobs that are at risk if the state aid doesn't pass.
As it stands now, the National League of Cities, the National Association of Counties, and the U.S. Conference of Mayors are reporting that 481,000 state and local workers will be laid off in the coming year.