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Published: Thursday, 2/12/2009

Negotiations trim stimulus to $789B

FROM THE BLADE S NEWS SERVICES

WASHINGTON The Democratic-controlled Congress and White House quickly agreed yesterday on a compromise $789 billion economic stimulus bill designed to create millions of jobs in a nation reeling from recession.

The House of Representatives could vote as soon as today, and passage there is certain. Senate approval is less certain, but the three key moderate Republicans who supported the Senate version of the bill Sens. Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania said that they would support the compromise agreement.

The measure is expected to win support from virtually all Democrats and a handful of moderate Republicans.

President Obama could sign the measure within days.

More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95 percent of American workers, Senate Majority Leader Harry Reid (D., Nev.) said at a Capitol news conference where he was joined by moderates from both parties whose support is essential for the legislation s final passage.

House Speaker Nancy Pelosi (D., Calif.), Mr. Reid s main partner in negotiations, initially withheld her approval in a lingering disagreement over federal funding for school construction. We had to make sure the investment in education was in the bill, she said.

Mr. Obama, who has campaigned energetically for legislation, welcomed the agreement in a written statement that said it would save or create more than 3.5 million jobs and get our economy back on track.

The emerging legislation is at the core of Mr. Obama s economic recovery program.

Scaling back the bill to levels lower than either the $838 billion Senate measure or the original $820 billion House-passed measure caused grumbles among liberal Democrats, who described the cutbacks as a concession to the moderates, who are under pressure from conservative Republicans to hold down spending.

Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans.

The President s signature tax cut was preserved a break for millions of lower and middle-income taxpayers of $400 per individual and $800 per couple. That s less than the $500 and $1,000 the White House originally sought.

Wage-earners who don t earn enough to pay income taxes would get a reduction in the Social Security and Medicare taxes they pay.

The bill also includes help for victims of the recession in the form of expanded unemployment benefits, food stamps, health coverage, and more. Also part of the package is billions of dollars for states that face the prospect of making deep cuts in school aid and other programs.

Another provision will mean a one-time payment of $250 for millions of beneficiaries who receive Social Security, Supplemental Security Income, or veterans pensions and disability, officials said. They added that the measure will include $46 billion for transportation projects such as highway, bridge, and mass transit construction.

The President also won money for two other administration priorities information technology in health care, and green jobs to make buildings more energy efficient and reduce the nation s reliance on foreign oil.

The bill will be the beginning of the turnaround for the American economy, predicted Sen. Joe Lieberman, the independent from Connecticut.

Many Republicans disagreed.

It appears that Democrats have made a bad bill worse by reducing the tax relief for working families in order to pay for more wasteful government spending, Rep. John Boehner of Ohio said.

Some Republicans griped about being shut out of negotiations. Rep. Jerry Lewis of California, top Republican on the House Appropriations Committee and a negotiator on the bill, said he was excluded from private meetings to piece together a final bill.

I have never before in my 30 years in Congress seen such secrecy, he complained.

But some prominent Republicans straddled the issue.

Alaska Gov. Sarah Palin said her state was ready to accept a projected $1 billion in federal funds. But she criticized increased spending on social programs, which she said could wind up costing her state in the long run and don t necessarily stimulate the economy.

The events capped a frenzied 24-plus hours that began at midday Tuesday when the Senate approved its version of the bill on a mostly party-line vote of 61-37. Mr. Reid, Ms. Pelosi, and White House Chief of Staff Rahm Emanuel plunged into meetings designed to produce agreement in time for Mr. Obama to sign the bill by midmonth.

Ms. Pelosi was conspicuously absent from yesterday s news conference in which members of the Senate announced the agreement. Moments later, Mr. Reid arrived in her office, and the two talked by phone with Mr. Emanuel, officials who spoke on condition of anonymity said.

Officials had said previously that one of the final issues to be settled was money for school modernization, a priority for Ms. Pelosi and Mr. Obama and one on which they differed with Sen. Susan Collins (R., Maine) and other moderates whose votes will be essential for final Senate approval.

Originally, Ms. Pelosi and House Democrats wanted a new program dedicated to school construction, but Ms. Collins held firm against that. In the end, officials said the agreement added $10 billion to a State Stabilization Fund, with the additional provision that governors may use some of the money for modernizing school buildings but not building new ones.



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