States can expect $80 billion for schools: Schumer

By Joan Gralla

NEW YORK (Reuters) - President-elect Barack Obama's proposed stimulus plan is expected to include about $80 billion of school grants for states, U.S. Senator Charles Schumer said on Monday.

Speaking at an Albany news conference with fellow Democrat Gov. David Paterson, Schumer said states should get about one-third of the $800 billion total the U.S. government will spend to rescue the economy from a painful recession.

The state aid will include extra funds for Medicaid, the state-federal health-care program for poor, and New York should get at least $5 billion of that aid, Schumer said.

"(If) the states at the same time are taking money out of the economy, either raising taxes or laying off people, then the government is giving with one hand and taking with another," said Schumer.

Paterson said New York sends billions of dollars more in taxes to the federal government than it gets back.

"This is not a hand-out, it's a hand-back," he said.

Paterson is one of five governors leading the charge to include education dollars in the national plan. He also joined the list of governors bidding for the infrastructure component of the economic revival plan. New York has about 1,922 projects waiting in the wings, which would cost $11.7 billion, he said.

This could create around 300,000 jobs, assuming each $1 billion of spending prompts employers to hire 33,000 workers, Paterson said.

(Editing by Leslie Adler)