Prospects for school funding help wilt in U.S. Senate

WASHINGTON, May 25 (Reuters) - Senator Tom Harkin said on Tuesday he would drop plans to attach a $23 billion public education fund to a supplemental defense spending bill, bowing to Republican opposition and procedural complications.

Harkin, a Democrat who chairs the Health, Education, Labor and Pensions Committee, said he would find another way to create the fund, that was modeled after the $40 billion state stabilization account in the economic stimulus passed last year.

The House of Representatives has included the fund in its supplemental appropriations bill. Once that bill passes, and the two chambers of Congress confer to reconcile their legislation, Harkin said he would fight to keep the fund in the final bill to be sent to President Barack Obama to sign into law.

“Republicans are adamant that they don’t want to fund the education. I have no Republicans who will vote for it,” he said.

Under Senate rules Harkin would have had to collect 60 votes in order to attach the amendment to the military spending bill, which would require some Republican support.

States are concerned about the ending of the two-year stimulus plan, saying their financial difficulties from the recession that began in 2007 will continue for many more years.

They have warned that if the federal government does not extend some of the stimulus aid, they will have to eliminate education jobs.

Republicans, however, have said that the fund represents a bailout for states that is too expensive for a country with a deficit of more than $1 trillion.

Earlier this month, Education Secretary Arne Duncan said that state and local budget challenges threaten 100,000 to 300,000 jobs.

Healthcare and education typically make up half of a state’s spending, according to Standard & Poor’s Ratings Services.

States face total budget gaps for fiscal 2011 of more than $100 billion, S&P said in a recent report. For most states, fiscal 2011 starts July 1. (Reporting by Lisa Lambert and Susan Cornwell; Editing by Kenneth Barry)