Rep. Pence: ‘State Bailout’ is Handout to Teachers

ABC’s Z. Byron Wolf reports:

"Bailout" was the word of the day for Republicans on Capitol Hill as they united in opposition to a $26 billion spending bill to float state governments a lifeline on Medicaid payments and to save the jobs of teachers and first responders put in jeopardy by the long recession.

The Department of Education estimates that the bill will save between 100,000 and 300,000 teacher jobs nationwide and 3,600 teacher jobs in Indiana . But Rep. Mike Pence, who pointed out that he can’t be accused of disliking teachers; hes married to one, defended his vote against the bill.

“My wife more than a decade in the public school classrooms so I love teachers, but teachers, firefighters, policemen are all Americans and they all know that the economic policies of bailouts and handouts have failed to create jobs,” he said.

“Is saving these teacher jobs a handout, is that what you're saying?” I asked Pence.

“This is a state bailout today. I don't think there's any way to put a bow on that, that's what this is,” he said. Pence. He also dismissed Democrats’ argument that the bill is paid for with budget cuts and closing tax loopholes elsehwhere in the government, including food assistance for the poor.

Closing corporate tax loopholes, said Pence, is tantamount to “a permanent tax increases to pay for temporary spending.”

There will be more direct tax hikes next year unless Congress acts to extend Bush-era tax cuts. Pence vehemently supports extending all of those tax cuts, but would not say if he would ultimately support extending only tax cuts for the middle class if that is the only option the Democrats who run Congress give him.

Even though Democrats have suggested their plan is to extend tax cuts only for those Americans making less than $250,000, Pence called the scenario “game board discussion.”

He predicted that Democrats will change their minds about tax cuts after spending August campaigning in their districts.

“I know Democrats are planning on allowing this enormous tax increase in January, but I expect the American people are letting my colleagues in the Democratic Party know how they feel and I have a feeling that we still have a fighting chance to at least, at minimum, make sure that taxes don't go up on January 1 for any American,” he said.

Congress called off its summer break for one day to vote in the House of Representatives on a $26 billion state aid bill to rescue state governments from Medicaid bills and having to lay off up to 100,000 teachers nationwide.

If Republicans are in charge next year, Pence suggested they would not seek to offset the tax hikes elsewhere in the budget; allowing tax cuts to remain, he argued, would spur more business development ultimately create revenue through growth.

Pence’s pitch for the Republican plan: Fiscal discipline in Washington D.C., allow American small businesses, family farmers and individuals to keep more of their hard-earned tax dollars and we do those things, and I guarantee you, we'll create jobs and get this economy moving again.

On the other hand, while Pence had praise for notion of cost cutting at the Pentagon, he did not endorse the steep, $100 billion over ten years of cuts that Defense Secretary Robert Gates laid out yesterday.

“We appropriate the money here in Congress, they don't do that in the Pentagon,” said Pence. “But we welcome the input, we're welcome their recommendations. Here with a massive national debt, a trillion and a half dollars deficit this year for the second year in a row , now as far as the eyes can see, everything's got to be on the table and that includes- we've got to look at some responsible pruning of our defense spending and so, in the broadest possible sense, I commend the Secretary of Defense for starting that conversation.”

Pence and Gates have differed over defense spending the past. Gates, Pentagon leaders and the White House would like to shelve plans for a second, backup engine for the F-35 Joint Strike Fighter. The second engine, decried by good government groups and the White House as wasteful, is defended by Pence . Rolls Royce, which would make the second engine, employs 4,000 people in Indiana. And Pence has said that the competition of having two engines for the same aircraft could bring down costs. Here is the counter-argument .

Also on Top Line – Rick Klein and I talked with Dan Balz of the Washington Post about the plane crash in Alaska involving former Sen. Ted Stevens, and his legacy in the U.S. Senate. We rounded things out with the Colorado Senate races on this primary day.

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