Congress and White House near final deal on stimulus
WASHINGTON (Reuters) - President Barack Obama's push for a massive injection of tax cuts and government spending to jump-start the U.S. economy moved forward on Wednesday as Congress neared a deal on a bill costing $789 billion (549 billion pounds).
"We're close. I expect to have it done by 3 p.m. (8 p.m. British time)," said Senator Max Baucus, one of the negotiators on the package aimed at pulling the U.S. economy out of its deep recession.
Baucus said later the final package would cost $789 billion and that Democrats had the votes to pass it.
Democrats control both chambers in Congress and fellow Democrat Obama, in office for just three weeks, is pushing for a conclusion to the legislation by the weekend.
Baucus said it was very possible that the House would vote on Thursday on the compromise and the Senate would follow on Friday.
Hoping to shore up the vital support of three moderate Republican senators, congressional negotiators were under pressure to shrink the overall size of the bill and appeared to be getting results.
The House of Representatives has passed a bill costing about $820 billion, while the Senate's version would have cost $838 billion. The two chambers are trying to come up with a compromise bill.
Among the changes negotiated to lower the overall cost, according to congressional aides, was a somewhat smaller tax credit for workers that would now total $400 for individuals and $800 for couples. An earlier version of the bill would have granted $500 and $1,000 respectively.
And in a possible move to shore up House Speaker Nancy Pelosi's backing, negotiators were talking about adding more money than the Senate version did for education. But details were still lacking.
Other tax changes could include modifying tax incentives to encourage home and automobile buying, according to senators.
Obama has said the economic stimulus, with its goal of creating and saving up to 4 million jobs, was needed to avert "catastrophe" in the U.S. economy.
Seeking to blunt Republican criticisms that the legislation contains wasteful spending that won't necessarily stimulate the economy, Obama said on a visit to a Virginia construction site: "We're going to do more than has ever been done before to make certain that every tax dollar is spent wisely and on its intended purposes."
According to one House Republican aide, negotiators were still debating how to handle a controversial provision encouraging the use of U.S.-made materials in construction projects funded by the bill. An early version of the legislation angered U.S. trading partners.
Several other spending components of the bill were still being discussed, congressional aides said. But a one-year fix of the Alternative Minimum Tax, costing about $70 billion, was still in the package, according to lawmakers. That fix would prevent middle-class taxpayers from being sucked into higher taxes paid by the wealthiest, which Congress never intended.
Congressional negotiators, with White House Chief of Staff Rahm Emanuel at their side, continued to work on a compromise bill with the goal of presenting it at 3 p.m. EST (8 p.m. British time) in a public session of leading House and Senate members.
If approved at that session, the compromise bill would be sent to the full House and Senate for final passage, possibly by week's end. Obama has said he would sign the measure into law promptly.
Alone, the stimulus package is unlikely to fix the U.S. economy because it does not address financial sector problems.
The Obama administration hopes to address this through a bank rescue program unveiled by Treasury Secretary Timothy Geithner on Tuesday. Wall Street plunged as traders expressed disappointment there were not more details.
(additional reporting by Donna Smith and Jeremy Pelofsky)
(Editing by Alan Elsner and Frances Kerry)