Congress could send billions to U.S. schools for jobs

WASHINGTON, July 2 (Reuters) - The U.S. Congress is closer to sending billions of dollars to public schools in order to save education jobs, just as layoffs rise in higher education and school districts across the country.

The U.S. House of Representatives approved creating a $10 billion fund for school jobs when it passed a defense spending bill late Thursday that also included money for domestic programs.

Because the House added billions of dollars in nonmilitary spending before passing the war funds, the measure must return to the Senate which has already passed its own bill for supporting troops in Afghanistan and Iraq.

According to a National Education Association analysis, the education fund will save approximately 138,000 education jobs.

"The much-needed funds will keep class sizes from ballooning and prevent many harmful cuts to critical services and programs for students," said NEA President Dennis Van Roekel in a statement issued late Thursday. "We urge the Senate to act swiftly to pass the emergency funding bill and stave off more economic damage to our schools."

Republicans in the Senate have grown wary about spending as the nation's debt and deficit continue to grow and stopped a move in May to create a similar education fund totaling $23 billion.

Government data on Friday showed that layoffs are already taking hold in education. State government education lost 4,000 jobs in June and local government education 500 jobs.

As elementary and high schools wind down for summer they typically shrink their workforce, but the number of those on local education payrolls is much smaller this June compared to a year ago. Currently, there are 8.01 million workers in local government education. Last June there were 8.09 million.

The $863 billion economic stimulus plan sent billions of dollars to states for education. The money will soon run out and U.S. Education Secretary Arne Duncan has warned of thousands of layoffs by the start of the school year.

To receive stimulus money, states pledged to keep school spending at certain levels. Once the plan expires, they will be free to cut and, because most states still face yawning budget gaps, there is a good chance they will slash school spending.

"We will not allow our children's education to become a casualty of the state of the economy," said U.S. Representative George Miller, who heads the House Education and Labor Committee.

(Reporting by Lisa Lambert; Editing by Andrew Hay)