Agreement Reached on Economic Stimulus, Senators Say (Update2)
By Brian Faler
Feb. 6 (Bloomberg) -- Senators agreed on an economic stimulus plan of at least $780 billion to rescue the U.S. economy from sinking into what President Barack Obama warns would be an even deeper recession if Congress doesn’t act.
Three Republicans agreed to join Democrats who control the chamber in supporting the measure. A Senate vote, possibly this weekend, would move Congress closer to Obama’s deadline of sending a bill to him by mid-February. The plan would have to be reconciled with the House-passed $819 billion package.
“We are passing a bold and responsible plan that will help our economy get back on its feet, put people to work and put more money in their pockets,” said Senate Majority Leader Harry Reid, a Nevada Democrat.
Nebraska Democrat Ben Nelson said he and other senators from both political parties worked “line by line, dollar by dollar” during daylong negotiations to cut more than $100 billion from the Senate’s prior $900 billion-plus proposal. The plan is “about jobs, jobs, jobs,” he said.
Democrats said the $780 billion compromise didn’t include the cost of programs, including tax cuts aimed at boosting the housing and auto industries, that were added to the earlier Senate plan during debate this week.
Today’s Labor Department report, showing that the jobless rate rose to 7.6 percent last month from 7.2 percent in December, added urgency to the congressional talks. Payrolls fell by 598,000, the biggest monthly decline since December 1974.
‘Moving Forward’
“We are pleased the process is moving forward and we are closer to getting Americans a plan to create millions of jobs and get people back to work,” White House spokesman Robert Gibbs said in a statement.
Earlier today, Obama urged Congress to wrap up its work, saying it would be “inexcusable” to get “bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work.”
Republican Senators Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania said they will support the package.
“This compromise greatly improves the bill,” Collins said.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, said he opposed the plan and doubted it would do enough to boost the economy.
“The president said originally he had hoped to get 80 votes” in the Senate, said McConnell. “It appears that the way this has developed, there will be some bipartisan support but not a lot.” He added: “Most of us are deeply skeptical that this will work.”
Broadband Access
Lawmakers agreed to cut $2 billion that had been set aside to promote broadband access in rural areas, $3.5 billion to make federal buildings more energy efficient, $200 million for NASA and $400 million for state and local law enforcement grants.
Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, said education initiatives would take among the biggest cuts under the accord. He estimated the plan now includes about $325 billion in tax cuts after a reduction of $18 billion.
The compromise reduces a proposed subsidy for laid-off workers who under federal law can continue to buy health insurance from their former employers, according to a description by the Senate Finance Committee.
The plan reduced the income cap for workers who would benefit from Obama’s $1,000 payroll tax credit to $140,000 for married couples and $70,000 for singles, from $150,000 and $75,000 respectively.
‘Build America Bonds’
Other provisions would reduce the value of a refundable child tax credit and certain types of new “build America bonds.” The compromise measure retains a $15,000 tax credit for people who buy homes over the next year and tax deductions for buyers of new cars, both of which were added to the larger measure this week, according to committee spokeswoman Carol Guthrie.
House Speaker Nancy Pelosi, a California Democrat, said earlier today she is “very much opposed to the cuts that are being proposed in the Senate” such as the reductions in education spending.
Lawmakers today approved an amendment imposing tougher restrictions on money for pet projects than those in the House bill. The House measure bars stimulus funding from going to casinos, aquariums, zoos, golf courses and swimming pools. The amendment adopted today includes those restrictions while also barring money from going to museums, arts centers, theaters, highway beautification projects, stadiums and parks.
“It’s about saying to the American people that we’re going to prioritize the spending,” said Senator Tom Coburn, an Oklahoma Republican who sponsored the amendment.
To contact the reporters on this story: Brian Faler in Washington at bfaler@bloomberg.net; Christopher Stern in Washington at joconnell3@bloomberg.net
Last Updated: February 6, 2009 22:50 EST |
