WSJ reports state and local govts would benefit from more than $160 billion in federal aid under a plan pushed by House Democratic leaders in negotiations over the economic-recovery package taking shape on Capitol Hill. The House has taken the lead on the issue in closed-door discussions on the broader recovery package, which is sought by President-elect Barack Obama and is expected to have an overall price tag approaching $800 billion. Individuals familiar with the proposed state assistance said the broad outlines are likely to be accepted by the Senate, which is working on a plan of similar scope, as well as the incoming Obama administration. Under the plan, some $80 billion would be steered toward a new "education stabilization fund," which would be used to help states avoid cutbacks in teachers and classroom programs. An additional $87 billion would be set aside for Medicaid, the federal-state program that helps low-income families and is facing budget constraints. A further $3 billion would be spent on certain Medicaid regulatory initiatives.
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