Obama plan seen sparking 400,000 education jobs

WASHINGTON (Reuters) - President Barack Obama's latest economic plan could save or create up to 400,000 education jobs, the White House said on Tuesday as Obama pushed his $447 billion plan to revive the economy.

Obama's proposed American Jobs Act would provide $30 billion for state and local efforts to retain, rehire and hire educators, supporting 392,400 jobs, according to projections released by the Education Department and White House Council of Economic Advisers.

That money would last one to two years and states would have to sign agreements they would not use the funding for other purposes.

"We know that putting hundreds of thousands of education workers on the unemployment line would be terrible for children, terrible for education, and would do great damage to our nation's economy," Education Secretary Arne Duncan said in a call with reporters.

State and local governments are still wounded by the collapse in their revenues caused by the housing bust, financial crisis and recession. They are slashing spending, putting schools in a "mixed but deteriorating fiscal situation," the non-partisan Government Accountability Office. recently reported.

Nearly three-fourths of schools expect to cut spending this school year, according to the GAO.

The White House report said state and local funding cuts were putting as many as 280,000 teacher jobs at risk next year.

Texas would get the biggest boost from Obama's initiative, with an estimated 39,500 education jobs being supported by the plan. Obama visited the state on Tuesday to promote his tax and spending plan intended to drive down the nation's 9.1 percent unemployment rate.

But the $2.6 billion Texas would gain in the legislation may not appeal to its Republican governor, Rick Perry, who is running for president on pledges to limit the federal government's reach. Texas, in a move to balance its budget, cut $4 billion from state education funding this year.

Prospects of Obama's legislation passing dimmed on Monday, when the House of Representatives' majority leader, Republican Eric Cantor, said the bill as a complete package was dead.

Republicans have said they would back portions of it.

Educators make up more than half of the local government workforce, according to the Labor Department. From August 2010 to August 2011, schools and school districts shed 194,000 education workers. Since the recession began, local governments have lost 243,000 school positions.

California would receive the most money under Obama's plan, $3.62 billion, which the report said would support 37,300 jobs. Florida would receive $1.67 billion, supporting 25,900 jobs, and New York $1.77 billion for 18,000 jobs. Illinois, hit by chronic budget problems, would receive $1.24 billion for 14,500 jobs.