By Richard Cowan and Susan Cornwell
WASHINGTON (Reuters) - President Barack Obama's push for a massive injection of tax cuts and government spending to rescue the U.S. economy gained momentum on Wednesday as Congress neared a deal on a $789 billion bill that could be approved by Friday.
"I'd rather not get into all the details, but it's 789," said Senator Max Baucus, one of the Democratic negotiators on the bill, referring to the hundreds of billions of dollars in tax cuts and government spending projects the stimulus package will contain.
Others said the numbers were still in flux, though, and lawmakers were considering reducing tax incentives for home and car purchases to shrink the cost as demanded by moderate Senate Republicans whose support is crucial.
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 in hopes it will begin to create and save up to 4 million jobs in an economy that has seen millions of workers laid off.
Negotiators are working on a compromise bill after the House of Representatives and Senate passed different versions. Although some final details were still being crafted in closed-door meetings that included White House officials, Baucus said it was "very possible" the House could vote on the compromise bill on Thursday, followed by the Senate's final vote on Friday.
"The votes are there for passage," said Baucus, who oversees tax policy in the Senate.
Barring last-minute hitches, the group of House-Senate negotiators will meet publicly at 3 p.m. EST (2000 GMT) to sign off on the compromise bill.
"I don't see anything that would constitute a dealbreaker," said Senator Ben Nelson, a moderate Democrat who worked with three Senate Republicans on an earlier compromise to break a logjam in that chamber.
POLITICAL PRESSURE
Without an economic stimulus bill, Obama has said the United States faces a possible economic "catastrophe."
Seeking to blunt Republican criticisms that the bill 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."
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 has passed a bill costing about $820 billion, while the Senate's version would have cost $838 billion.
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 boost 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.
Negotiators also had to figure out what to do about "Buy American" language encouraging the use of U.S.-made goods in construction projects financed by the stimulus bill. The initiative has angered U.S. trading partners.
The final bill would likely contain softer language that had been backed by the Senate, Baucus told reporters.
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.
Alone, the stimulus package is unlikely to fix the U.S. economy because it does not address financial sector problems that dried up credit.
The Obama administration hopes that will be addressed through a bank rescue program unveiled by Treasury Secretary Timothy Geithner on Tuesday. Initial reaction to that was cool from Wall Street, where stocks plunged as traders expressed disappointment there were not more details.
Republicans have been nearly unanimous in their opposition to the stimulus legislation, arguing it was poorly crafted and could end up wasting taxpayer money. Some House Republicans on Capitol Hill complained that they had been left out of the final negotiations.
Such complaints have underlined an uphill task for Obama, who won last November's election promising to work across party lines as president.
In recent days, Obama has traveled the country to rally public support for the bill, and he devoted much of his first news conference, on Monday, to stressing its importance.
(additional reporting by Donna Smith and Jeremy Pelofsky; editing by Frances Kerry)
