Congress has approved and President Obama has signed into law a bill that will send $430 million to Minnesota to help pay for health care and to save public school teachers’ jobs. The breakdown is $167 million for education and $263 million in additional funding for health care provided by Medicaid.

Hard caps on nondefense domestic discretionary spending will not significantly reduce long-term deficits. That’s because the biggest factors contributing to long-term deficits are primarily the 2001 and 2003 Bush tax cuts and the costs associated with the wars in Iraq and Afghanistan – not domestic discretionary programs. According to the Center on Budget and Policy Priorities:

The U.S. Senate faced a critical vote yesterday on measures that are important to the country’s continued economic recovery, including a six-month extension of additional federal funding to states for Medicaid (also known as FMAP), as well as an extension of Unemployment Insurance. The failure to pass these provisions threatens to slow the nation’s economic recovery.

Congress is considering whether to provide states with additional funding for health care, helping state governments at a time when most are facing budget shortfalls and considering reductions in health care and services. Unfortunately, the opportunity to protect access to health care for many Minnesotans may be slipping away.

President Obama’s proposed 2011 budget would reduce the federal deficit by about $1.3 trillion over the next decade, according to an analysis from the Center on Budget and Policy Priorities. Under current law, projected federal deficits would total more than $11 trillion from 2011 to 2020, but the President’s budget cuts that down to $9.8 trillion.

The nonpartisan Congressional Budget Office (CBO) has found that federal health care reform legislation will make a significant dent in the federal deficit. The CBO estimates that the new law will reduce the federal deficit by $143 billion from 2010 through 2019 and by $1.3 trillion from 2020 through 2029. A recent paper by the Center on Budget and Policy Priorities explains how this occurs, and refutes some arguments being made to the contrary.

On March 21, the U.S. House passed the Senate health care reform bill by a vote of 219-212 and then passed a reconciliation package of changes to the Senate bill by a vote of 220-211. Minnesota Reps. Ellison, McCollum, Oberstar and Walz voted for both bills. Reps. Bachmann, Kline, Paulsen and Peterson voted against both bills.

The budget that President Obama will send to Congress on February 1 must address two seemingly conflicting goals: he must propose additional short-term spending in order to help the nation’s economy recover so that we can reduce the long-term national debt. Spend more now to reduce debt later? Yes, and here’s why.

Democratic Congressional leaders are putting together the final health care reform bill. The Obama administration is hoping Congress will pass a final health care reform bill in time for the President’s State of the Union address now expected the first week of February.

The House bill would extend coverage to an estimated 36 million uninsured Americans while the Senate bill would cover an estimated 31 million uninsured Americans.