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Obama Threatens Veto of War Bill Over Education Cuts

By Brian Faler

July 1 (Bloomberg) -- The Obama administration threatened to veto the House version of a war-funding bill because it would rescind $800 million in education funding to help finance $10 billion in state aid to prevent teacher layoffs.

“The administration is more than willing to work with the Congress to pursue responsible ways to finance education jobs,” a White House statement said. “It would be short-sighted to weaken funding for these reforms just as they begin to show promise.”

House Appropriations Committee Chairman David Obey, the lead sponsor of the legislation, said tough choices were needed to ensure the money for teachers doesn’t add to the government’s budget deficit.

“I didn’t come here to be Arne Duncan’s congressman,” said Obey, a Wisconsin Democrat, referring to the secretary of education. “Who do people think put the money into these programs in the first place? I did,” Obey said, adding: “Welcome to Washington and welcome to hard choices.”

The dispute over education funding in the war bill threatens to become an intraparty fight over spending just months before the congressional elections in November. Lawmakers are struggling to reconcile conflicting pressures to spend more on jobs-related initiatives without adding to the government’s $1.5 trillion budget deficit.

Senate Version

The Senate last month approved its version of the legislation, totaling $60 billion, including $37 billion for the wars in Iraq and Afghanistan, $5 billion in disaster relief and $2.9 billion in aid to Haiti. The plan included $13 billion for a Department of Veterans Affairs decision to increase the number of ailments presumed to be tied to use of the defoliant Agent Orange during the Vietnam war.

The Senate measure didn’t include the changes in education aid, which House Democrats added to the bill in an effort to prevent an estimated 140,000 teacher layoffs.

Defense Secretary Robert Gates urged lawmakers earlier this month to complete work on the legislation before leaving town for a weeklong July 4 recess. Otherwise, he said, the Pentagon would be forced to do “stupid things” such as taking money out of other programs to ensure adequate war funding. He said the agency may have to furlough civilian employees if the money isn’t approved by mid-August.

Jobless Aid Program

Lawmakers also failed to agree on an extension of an unemployment-assistance program before leaving town. The House today passed legislation to continue the program through November. The extension was blocked in the Senate a day earlier by Republicans in a fight over how to finance it. The Senate will try again to pass the measure when lawmakers return to Washington.

More than 2 million Americans may see their jobless benefits interrupted by mid-July, according to the Labor Department.

House Democrats had debated passing the Senate war-funding measure unchanged to get the money to the Pentagon. They ultimately decided to seek additional spending items.

Democrats also added $5 billion for Pell college tuition grants, $304 million for studies and aid to fishermen and others affected by the oil spill in the Gulf of Mexico and $701 million for border security.

Pay to Delay

Those costs would be partially financed by provisions clamping down on so-called pay-to-delay payments made by brand- name drug companies to generic-drug makers to delay lower-priced generic drugs from entering the market.

“We’re not a rubber stamp for whatever the Senate does. We have opinions too,” said Representative James McGovern, a Massachusetts Democrat, regarding the House additions to the measure.

Senator Thad Cochran, the ranking Republican on the Appropriations Committee, said his colleagues won’t accept the House changes and that reconciling the competing drafts of the measure will delay getting a bill to Obama’s desk until “at least” late July.

The war-funding bill is H.R. 4899. The unemployment measure is H.R. 5618.