Dem, GOP Lawmakers Reach Stimulus Deal

Feb. 11, 2009— -- After a day of closed-door negotiations, Congressional leaders struck a deal on a trimmed-down version of the stimulus plan, scaling it back to $789 billion, with House and Senate leaders working into the evening to overcome last-minute hurdles.

Democratic and Republican leaders went into a conference committee meeting, where differences in the House and Senate versions of a bill are resolved publicly, at 5 p.m. to hash out the details of the plan, but the meeting was postponed for the second time for unknown reasons.

The stimulus, which includes roughly $242 billion in tax cuts and $507 billion in spending, was hashed out by Democrat and moderate Republican senators this morning, who announced triumphantly at 3 p.m. today that they had reached an agreement on a slimmed-down version -- an announcement that was undercut by silence on the House side.

"The middle ground we've reached creates more jobs than the original Senate bill and costs less than the original House bill," Senate Majority Leader Harry Reid, D-Nev., said after a meeting of Senate Republican and Democratic leaders Wednesday morning.

"This is obviously a very difficult vote in view of the large deficit and national debt which we have, but I believe it is indispensable that strong action be taken because of the serious economic conditions ... and millions being foreclosed from their houses," said Sen. Arlen Specter, R-Penn. "The economists are uniform in their predication that we face the potential consequences of a catastrophe."

But the plan was met with some backlash from House Democrats, who complained about not being included in the negotiations.

To quell a last-minute rebellion by the liberal leaders, who were unhappy with the scaled-down bill, senators met at the office of House Speaker Nancy Pelosi, D-Calif., to negotiate the plan this afternoon and increased the funds allocated to states for school construction.

The White House thanked congressmen on reaching a "hard-fought compromise."

"It's also a plan that will provide immediate tax relief to families and businesses, while investing in priorities like health care, education, energy, and infrastructure that will grow our economy once more," President Barack Obama said in a written statement. " I'm grateful to the House Democrats for starting this process, and for members in the House and Senate for moving it along with the urgency that this moment demands."

Sorting Out the Issues

"Every school in America will get 10,000 bucks if they're lucky," said Sen. Tom Harkin, D-Iowa, guessing that might be enough to buy two energy efficient windows. "And what's that going to do for them?" he asked. "We're trying to add new heating facilities. We're trying to add renovations. And doing it by formula doesn't do it."

Another problem, sources said, was that some House Democrats thought the bill gives states too much discretion on how to use some of the money intended for education. Some Congressman are concerned that governors will not use the money to help poor school districts.

Harkin said he'd ultimately vote for it, but he doesn't like the concessions made to get the support of the moderate Republicans.

Transportation Secretary Ray LaHood, a former Republican congressman from Illinois, told ABC News' Jake Tapper today that House members "like to be in the room when these things are put together. And they haven't been."

And that was evident as some House leaders openly expressed their disappointment. House leaders John Boehner, R-Ohio, and Eric Cantor, R-Va., said they had been kept in the dark about the negotiations.

"From everything I'm hearing about the so-called deal, I'm very disappointed," Boehner said. "It appears they have made a bad bill worse by reducing the amount of tax relief for American families and small businesses and adding more wasteful Washington spending."

Cantor asked: "My question is, what is the majority trying to hide?"

One member of the conference committee, Rep. Jerry Lewis, the ranking Republican on the House Appropriations Committee, said in a statement: "In the dead of night, Democrat congressional leaders and White House officials negotiated the almost trillion-dollar stimulus legislation without a scrap of public scrutiny or bipartisan involvement. I have never before in my 30 years in Congress seen such secrecy and blatant lack of regard for the American public. This begs the question: If the Democrat majority is so proud of this stimulus legislation, what are they hiding from?"

Democratic congressional leaders and White House officials huddled in Pelosi's office until after midnight Tuesday night, attempting to come to a final agreement. But the California Congresswoman was not present at Wednesday's proceedings. White House chief of staff Rahm Emanuel was a major player in the meetings and was present on Capitol Hill today during the negotiations.

Making Everyone Unhappy?

To appease critics, several provisions were taken out or added to the stimulus plan as originally proposed. Sources told ABC News that in order to get the stimulus below $800 billion, President Obama agreed to scale back the tax cuts he promised in the campaign and which are a major component of the stimulus -- from the $500 for individuals and $1000 for couples that was promised, to between $400 and $800. Sources said some of the House education funding had been restored.

One of the toughest issues to negotiate on was direct funding to the states -- the so-called "State Fiscal Stability Fund." In the House bill, the fund was allotted $79 billion; the Senate compromise cut it to $39 billion. According to one negotiator, the House reluctantly agreed to the lower Senate number.

Some Republican lawmakers complained earlier today that they had been shut out of the negotiations. But even some Democrats were not very happy.

Obama continued to tout the plan Wednesday. Speaking in Virginia, the president said the plan would help states build their infrastructure and help create jobs.

"Now, there are those who've expressed the opinion that we won't be able to do it, who say that this plan is too big to be implemented effectively and efficiently," he said. "As president, I expect to be judged -- and should be judged -- by the results of the program."

All signs suggest that this will work out but drama remains high for now.

ABC News' Dean Norland and Rick Klein contributed to this report.