By BERNAMA,
WASHINGTON : The Democratic-led U.S. Senate on Friday reached a deal on a $780 billion (528 billion pound) stimulus package to stem a deepening recession, a potentially big win for President Barack Obama but undercut by his inability to draw much Republican support.
Democrats said the vote on the measure, closely watched internationally as a sign of U.S. commitment to act fast to help revive the world economy, could come later on Friday, although Republican could try to delay it by a few days.
With the United States in the grip of the worst economic crisis in more than 70 years — a report on Friday showed nearly 600,000 jobs were lost in December — Obama has demanded that a bill be put on his desk by February 16.
After five days of negotiations Democrats agreed to more than $150 billion in cuts to their original $937 billion proposal to trim what critics, most of them Republicans, called billions of dollars in unwarranted spending.
“We’ve got a deal,” Senator Sherrod Brown declared after a meeting with fellow Democrats on a compromise drafted by a group of moderate lawmakers from both parties.
Democratic Senator Ben Nelson, a leader of the group, said the stimulus would help to jolt the struggling economy through both middle class tax cuts and targeted investment.
“We trimmed the fat, fried the bacon and milked the sacred cows,” he said on the Senate floor. Massachusetts Democrat John Kerry said the compromise price tag would be made up of 42 percent tax cuts with 58 percent in new spending.
“It’s a good balance,” he said. Senate Finance Committee Chairman Max Baucus said it would pass with the support of three or four Republicans in the 100-member chamber.
MORE HAGGLING AHEAD
If the measure passes, lawmakers would have to resolve differences between it and an $819 billion version of the legislation approved last week by the House of Representatives without a single Republican vote.
Once a final bill is crafted and passed by both chambers, the measure would be sent to Obama to sign into law.
While a deal on the measures marks a solid start for Obama, who took office on January 20, the largely party-line support in the House and Senate were a setback in his drive to foster a new spirit of bipartisan cooperation in Washington.
Despite repeated calls to action from Obama, not a single Republican voted for the House version.
Opponents complained much of the new spending amounted to little more than a liberal wish list, and more should have been devoted to tax relief and job-creating construction projects instead of new rounds of other government spending.
Obama had said that he could accept a package in the $800 billion range and that failure to act could turn crisis into catastrophe. He rejected demands for wholesale changes by Republicans, saying it was their policies that had created the crisis in the first place.
Conrad said tax credits aimed at spurring home and automobile sales would remain in the Senate package. He also said that some 80 percent of the package would be disbursed over the first two years, higher than the 75 percent Obama had sought.
He also said that money for school construction would be eliminated in the legislation. Republican Senator John McCain, who lost to Obama in the November presidential election, criticized what he called a Democratic rush to pass the bill.
“They are establishing a very partisan approach to the greatest domestic challenge we face,” McCain charged.
Details of the administration’s other major initiative to address the crisis — how it will spend the remaining $350 billion of a bank rescue program agreed under President George W. Bush — are due to be announced on Monday.
A source with knowledge of the plan told Reuters the plan would offer to insure some distressed assets held by banks, authorise the government to purchase others, and spend up to $100 billion to buy and modify troubled homeowner mortgages.
(Additional reporting by Susan Cornwell and Steve Holland; Editing by Andy Quinn and David Storey)