New Bill Would Send Billions of Dollars in Federal Aid to Cash-Strapped States

Cash-strapped states are one step closer to receiving billions of dollars more in federal assistance, mostly for Medicaid and education.

The 61-39 vote in the senate was mostly partisan, only two republicans, both senators from Maine, supported sending 26 billion dollars more in funding to cash strapped states.

It includes more than 16 billion in additional funding for Medicaid and 10 billion for emergency personnel and teachers.

Democrats say the money will come just in time for the new school year.

“This is a bill for kids,” says Senator Tom Harkin, a democrat from Iowa. “To keep kids in classes that aren't overstuffed, over sized, to make sure they get the proper instructional material, to make sure they don’t get cut off of classes because teachers aren't there.”

But the measure comes on the heels of another big expense---extending unemployment benefits.

Earlier in the week, republican senator Mitch McConnell criticized the rush to help state funding, saying it will create a "permanent need for future state bailouts, at a time when we can least afford it."

State officials and public employee unions have been aggressively lobbying congress for more money and about 30 states already included the Medicaid dollars in next year's budget. Democrats’ senate majority leader Harry Reid says the money is necessary to save jobs.

“They've always been there for us: the teachers, the civil servants, police and fire,” said Reid. “The least we can do is be there for them.”

The bill will interrupt August recess for the house, which is being called back from summer recess Tuesday to vote on the bill.

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