Watch CBSN Live

Senate Jobs Bill Clears Key Hurdle

Updated at 4:17 p.m. ET

U.S. Senate Democrats on Wednesday overcame Republican opposition and cleared the way for a $26 billion measure to help states ease their severe budget problems and save the jobs of tens of thousands of teachers and other public employees.

The bill advanced by a 61-38 tally that ensures the measure will pass the Senate on Wednesday or Thursday. The leader of the House of Representatives, Speaker Nancy Pelosi, a Democrat, said the House will return next week from a recess for a final vote that would deliver the bill to President Barack Obama, his larger jobs agenda curtailed by Republicans who argue against the spending it would entail.

Moderate Republican Sens. Olympia Snowe and Susan Collins cast the key votes to break the Republican delaying tactics.

The bill would extend programs enacted in last year's stimulus law to help preserve the jobs of teachers, police officers, firefighters and other public employees.

The legislation is scaled back from versions that stalled earlier this summer as part of a larger tax-and-spend measure extending jobless benefits and a variety of expired tax breaks. The first piece is $16 billion to help states with their health care for the poor budgets in the first six months of next year.

It is less generous than the help provided under the stimulus law but is still desperately sought by governors, who have already made big budget cuts as tax revenues have plummeted in the recession and warn of even worse cuts if the federal help is not continued.

The measure also contains $10 billion to help school boards hit with similar budget woes avoid teacher layoffs this fall.

"This legislation makes a difference," said Sen. Patty Murray, a Democrat. "Real people in real jobs. Real paychecks."

But most Republicans opposed the measure, calling it a payoff to public employee unions and warning that it would make the states ever-dependent on federal funds.

The spending is accompanied by tax increases and spending cuts to avoid increasing the budget deficit. The bill eliminates in March 2014 an expanded food stamp benefit enacted last year and limits the ability of some U.S.-based multinational companies to use foreign tax credits to reduce their U.S. taxes.

"That would have the effect of driving jobs overseas," said Sen. Lamar Alexander, a Republican.

Democrats, who control the chamber with 59 votes, needed to pick up at least one Republican to muster the 60 votes required in the 100-member chamber to defeat Republican stalling tactics.

Wednesday's vote to defeat the Republicans came after Democratic leaders made final tweaks to the measure in hopes of winning over Snowe and Collins. The duo also provided the key votes last month to pass a six-month extension of jobless assistance for the long-term unemployed.

A vote scheduled for Monday was postponed after an analysis by the Congressional Budget Office showed the measure would add to the budget deficit. Snowe and Collins also had been concerned about cuts to Navy shipbuilding accounts since the Bath Iron Works in their state of Maine is so essential to the state's economy. Majority Leader Harry Reid got rid of the proposed cuts Monday night.

View CBS News In