Senate and House negotiators agreed Feb. 11 on a compromise, $789 billion economic stimulus bill that includes some funding for school modernization, a priority item for President Obama and House Democrats. Exactly how much funding schools and colleges might get to renovate their buildings and make classrooms technology-ready was unclear as of press time.

The agreement opens the door for passage of the final stimulus package in both the House and Senate later this week, after each body of Congress had passed competing versions of the legislation.

House Speaker Nancy Pelosi, D-Calif., initially withheld her approval in a lingering disagreement over the school modernization funding. "We had to make sure the investment in education" was in the bill, she said.

Pelosi’s stand was prompted when the Senate on Feb. 10 passed a version of the bill that omitted $20 billion in proposed school modernization funding. (See "Schools lose in Senate stimulus ‘compromise.’") The House version of the bill included this money.

The final compromise version will allow schools to use some of the $54 billion in state emergency funding to pay for renovation projects, as long as the money is not spent on new school construction.

The $54 billion figure is a little less than half the difference between what the Senate ($39 billion) and House ($79 billion) had approved for money to offset state budget cuts.

Education Secretary Arne Duncan said schools desperately need new buildings and renovations as he made a pitch for more spending in Obama’s economic recovery bill.

"It makes no sense to me that we don’t see the huge stimulative impact of putting people to work now" by modernizing schools, Duncan said before a final agreement had been reached. "We have tremendous unmet need well beyond [the initially proposed] $20 billion."

More kids than ever are crammed into aging, run-down schools that need an estimated $255 billion in repairs, renovations, or construction, according to an analysis by the American Federation of Teachers. An earlier estimate from the National Education Association placed the cost even higher, in the range of $360 billion. Even at the originally proposed $20 billion figure, federal funding would have addressed only a fraction of the need.

Rebuild America’s Schools, a coalition of national organizations and school districts, has been vocal in its support for school modernization funds, saying that public school modernization improves local communities and helps students develop the skills needed to compete in the 21st-century workplace.

College campuses nationwide also were relying on construction spending originally included in the stimulus package to salvage projects considered "shovel ready."
 
Several Missouri colleges and universities have cancelled or postponed construction projects that were slated to be funded by the Missouri Higher Education Loan Authority (MOHELA). After missing a series of payments to the Missouri state government, MOHELA now owes more than $10 million. The agency finds itself in the red for the first time since its creation in the early 1980s.

In California, campus officials at the American River College were hoping the stimulus legislation would include construction funding that could relieve overcrowding in its limited classrooms. The college has been forced to use classroom space in a nearby high school to accommodate an overflow of students. Like officials at campuses nationwide, American River College administrators said the projects are ready for completion–all that’s missing is the money.

Obama, who has campaigned energetically for the legislation, welcomed the House and Senate agreement in a written statement that said the bill would "save or create more than 3.5 million jobs and get our economy back on track."

The legislation is at the core of Obama’s economic recovery program.

The president’s signature tax cut was preserved in the compromise bill–a break for millions of lower- and middle-income taxpayers of $400 per individual and $800 per couple. That’s less than the $500 and $1,000 the White House originally sought, although officials said it would mean an estimated $13 per week extra per paycheck.

The president also won money for two other administration priorities: information technology in health care, and "green jobs" to make buildings more energy-efficient and reduce the nation’s reliance on foreign oil.

The bill "will be the beginning of the turnaround for the American economy," predicted Sen. Joe Lieberman, the independent from Connecticut.

Republicans strongly disagreed.

"It appears that Democrats have made a bad bill worse by reducing the tax relief for working families in order to pay for more wasteful government spending," said Rep. John Boehner of Ohio.

But some prominent Republicans straddled the issue.

Alaska Gov. Sarah Palin, last year’s Republican running mate and a potential White House contender in 2012, said her state was ready to accept a projected $1 billion in federal funds if they make sense for the state. But she criticized increased spending on social programs, which she said could wind up costing her state in the long run and "don’t necessarily stimulate the economy."

The events capped a frenzied 24-plus hours that began at midday Feb. 10 when the Senate approved its original version of the bill on a virtually party-line vote of 61-37. Immediately after that vote, Senate Majority Leader Harry Reid, Pelosi, and White House Chief of Staff Rahm Emanuel plunged into a series of meetings designed to produce an agreement in time for Obama to sign the bill by mid-month.

Pelosi was conspicuously absent from a Feb. 11 news conference in which members of the Senate announced the agreement. Moments later, Reid arrived in her office, and the two talked by phone with Emanuel, according to officials who spoke on condition of anonymity.

Officials had said previously that one of the final issues to be settled was money for school modernization–a priority for Pelosi and Obama, and one on which they differed with Sen. Susan Collins, R-Maine, and other moderates whose votes will be essential for final Senate approval.

Originally, Pelosi and House Democrats wanted a new program dedicated to school construction, but Collins held firm against that. In the end, officials said the agreement added flexibility to a $54 billion State Stabilization Fund, to permit local governments to use some of the money for modernizing school buildings but not for building new ones.

There also was an unspecified last-minute change in a House proposal that would allow state legislatures to order the use of funds over the opposition of governors. Officials said that issue related in part to South Carolina, where GOP Gov. Mark Sanford has been a vehement critic of the legislation.

Obama has contended that the plan is essential to avoid turning what is already the worst economic crisis in a generation into a catastrophe.

Scaling back the bill to levels lower than either the $838 billion Senate measure or the original $820 billion House-passed measure caused grumbles among many Democrats, who described the cutbacks as a concession to moderates, particularly Sen. Arlen Specter, R-Pa., who are under pressure from conservative Republicans to hold down spending.

Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles.

Links:

U.S. Senate

U.S. House of Representatives

Rebuild America’s Schools