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Letter to the Senate Supporting the American Workers, State and Business Relief Act

March 05, 2010

Dear Senator:

On behalf of the National Education Association’s (NEA) 3.2 million members, we urge you to vote YES for the American Workers, State and Business Relief Act proposed by Senators Reid and Baucus to be offered as a substitute amendment to HR4213. Following Senate passage of the Jobs for Main Street Act, this bill represents another important step in providing essential resources to create/save jobs and jumpstart the economy. We urge you to pass this bill, which includes important Medicaid, pension, and educator tax deduction provisions, followed by quick action on additional urgently-needed pieces of a jobs package.  We also urge you to vote NO on any amendments that would be harmful to public education, including an amendment by Senator Lieberman to reauthorize the District of Columbia voucher program.


State budget outlooks are bleak, with shortfalls predicted to be as high as $180 billion to $190 billion in 2010 and 2011. These shortfalls, if left unaddressed, could have a devastating impact on schools, students and educators just one year after the ARRA helped save or create more than 300,000 education jobs. Our nation’s economy simply cannot afford to lose many of these jobs, nor can our students afford to lose teachers and education support professionals. In fact, it would be counterproductive to an economic recovery if state and local governments are forced to lay off public employees.


Given these critical needs, we strongly urge the Senate to pass immediate assistance to states to create/save public sector jobs, including an Education Jobs Fund, following passage of the American Workers, State and Business Relief Act. An Education Jobs Fund would extend state stabilization aid that has already proven effective and played a key role in helping to keep middle class Americans working. Last month, Christina Romer, head of President Obama's Council of Economic Advisers, stated that fiscal relief to states under the American Recovery and Reinvestment Act has been "one of the triumphs" and has had "more bite than we would have thought." This observation coming from the CEA Chair affirms the economic value to the nation of this aid and reinforces the need to continue such assistance through an Education Jobs Fund.


An Education Jobs Fund will help put more faculty into higher education classrooms, including those at community colleges (where enrollments have increased as much as 40-50 percent,) so that students can get the education they need to get back to work. It will also help keep schools fully staffed with pre-k through post-secondary teachers and education support professionals at a time when many students are experiencing great stress. A recent University of California study found that children in families where the head of the household had lost a job were 15 percent more likely to repeat a grade. A January 2010 report from the bipartisan First Focus Campaign for Children found that 1 in 7 children are living with an unemployed parent, nearly a doubling of children in just over two years.


The bill on the floor this week does include several very important provisions.  We hope the Senate will act quickly to pass this bill.  We are particularly pleased that the current bill as proposed by Senators Baucus and Reid:

  • Includes an extension of the higher federal match to states for payments to doctors to low-income families under Medicaid (FMAP). This extension will provide an incentive for states to commit resources to Medicaid while helping ensure services for beneficiaries. In addition, it will relieve some – but not all -- of the current budget pressures that would otherwise force additional cuts to education and healthcare services.
  • Provides private pension relief in the form of a 15-year amortization of unfunded pension liability for single employer plans. So many employers during this financial crisis have faced enormous difficulty ensuring both their ability to meet payroll as well as fully funding their pension plans. Inclusion of this provision will allow employers needed time to adjust to the decline in the market and ensure the viability of their retirement plans. The immediate pension funding burden will force employers to announce more layoffs, freeze plans, and even potentially declare bankruptcy. Inclusion of this language will help save jobs by creating more cash liquidity for businesses, making it easier to retain employees and potentially create new jobs as well. This provision has bipartisan support and is also supported by the U.S. Chamber of Commerce.
  • Extends the educator tax deduction, which expired at the end of the 2009 tax year. The educator tax deduction helps recognize the financial sacrifices made by teachers and paraprofessionals, who often reach into their own pockets to purchase classroom supplies such as books, pencils, paper, and art supplies. For example, during the 2005-2006 school year, educators’ out-of-pocket expenses totaled nearly $2,000 – $826 for classroom supplies and $926 for instructional materials on average, according to the National School Supply and Equipment Association.

Again, we urge passage of the American Workers, State and Business Relief Act, followed by immediate action on additional state assistance for public sector jobs.

Sincerely,

Kim Anderson                                                                                               
Director of Government Relations