House, Senate quickly reach $790B stimulus deal

WASHINGTON -- Racing against a self-imposed deadline to finish an economic stimulus bill this week, congressional leaders tentatively agreed Wednesday to a $790 billion plan to boost the economy and create or save 3.5 million jobs.

Though details were still spilling out and some Republicans complained they had been left in the dark, House and Senate leaders said they hoped to pass the bill in both chambers by week's end, a timetable that could get it to President Obama by Monday. "This is when the recovery must begin," said Senate Majority Leader Harry Reid, D-Nev.

Obama, who has been pressuring Congress to act swiftly on the bill, released a statement thanking "Democrats and Republicans in Congress who came together around a hard-fought compromise that will … get our economy back on track."

The tentative deal capped a frenzied week on Capitol Hill during which a group of moderate senators cut billions from the bill so that it could clear an initial vote Tuesday. Three Republican senators — Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania — joined all Democrats and two independents in that vote. All three said they would vote for the compromise plan. Reid called them "three very brave people."

The measure includes a mix of tax cuts, help for victims of the recession in the form of unemployment, health insurance and food stamp benefits, and big investments in infrastructure, energy and education.

Negotiators trimmed $29 billion from the $819 billion House version of the stimulus by slashing spending and reducing tax cuts. Obama's signature "Making Work Pay" tax cut would be reduced 20%, to $400 annually for individuals and $800 for couples. Funding for school construction was eliminated from the bill.

"Today we have shown that, working together, we can address the enormous economic crisis facing our country," Collins said. She said Obama agreed to trim his hallmark tax cut to advance the bill to a final vote.

"Everybody gave. The president was willing to give," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "There is no choice here. This is a no-brainer."

Some House Republicans, all of whom voted against an earlier version, complained Wednesday that they had been cut out of behind-the-scenes negotiations leading up to the revised bill. By the time negotiators held a public meeting Wednesday night, work had largely been finished. "We're literally flying blind," said Rep. Dave Camp, R-Mich.

"It appears that congressional Democrats have made a bad bill worse by reducing tax relief for working families to pay for more wasteful government spending," said House Minority Leader John Boehner, R-Ohio.

Rep. Henry Waxman, D-Calif., complained that the final package was greatly influenced by the three Senate Republicans. Democrats consulted with them throughout the week to ensure the Senate would have the 60 votes needed to end a filibuster.

"It's been their way or nothing," Waxman said. "We're losing a lot of the jobs that the president wanted because of it."

In addition to reducing Obama's tax cut, proposals added by the Senate to provide tax credits to home buyers and tax deductions for people purchasing cars were greatly reduced.

The revised stimulus includes $54 billion to help states plug budget shortfalls, a compromise between the House and Senate versions. Negotiators said that's where any money for modernizing schools will have to come from following the removal of the separate school construction fund. House Speaker Nancy Pelosi, D-Calif., said she was disappointed the bill does not set aside a school construction fund.

Baucus said 35% of the bill's cost comes from tax cuts. That includes a patch lawmakers pass every year to shield middle-income American families from paying higher income taxes under the alternative minimum tax.

In addition to focusing his first prime-time news conference as president on the economy, Obama traveled to Indiana, Florida and Virginia this week to pressure Congress to act quickly on the stimulus. Thursday he plans to take his case to Illinois.

Major stock indexes skidded more than 4% Tuesday as the White House unveiled a plan to spend as much as $2 trillion in public and private money to prop up banks. Stocks partially rebounded as news of the stimulus deal broke; the Dow Jones industrial average closed up 51 points.

Senate Minority Leader Mitchell McConnell, R-Ky., suggested that the final Senate vote could fall largely along party lines.

"American families know they have a limit on spending their hard-earned money," McConnell said in a statement. "But now they must be wondering if the government has any limits on spending it for them."

Give-and-take resolves differences in plans

The White House and congressional leaders agreed Wednesday on a two-year, $790 billion economic stimulus plan. Here's how some of the differences between the House and Senate bills were resolved:

Sources: The Associated Press and USA TODAY research