Senators Hash Out Stimulus Details With Another Nudge From Obama

WASHINGTON, Feb. 7, 2009 — -- A massive economic stimulus deal struck late Friday is expected to pass the Senate with limited Republican support -- but as senators gathered for a rare Saturday session to debate the details, the partisan divide loomed large.

Though a few moderate Republicans likely will vote for the stimulus plan -- which President Barack Obama today said is necessary to avoid a "national catastrophe" -- many other Republicans are furious about the deal, warning it is filled with wasteful spending that will lead to a dangerously high deficit.

"There's evidence that this is kind of a sugar high," said Sen. John Kyl, R-Ariz. "We put a lot of spending out right now. But once the high is gone and you crash, you're going to be in a recession."

The Senate proposal's $827 billion price tag -- up from a $780 billion figure touted Friday -- actually is more expensive than the $819 billion bill that passed the House of Representatives without any Republican votes.

Even if the current plan passes the Senate, as expected on Tuesday, it would need to be reconciled with the House version -- a process that is not expected to be easy. Senators expect tough negotiations because House Democratic leaders are not happy with some of the Senate changes.

"Keep in mind it's approaching $1 trillion," said Senate Majority Leader Harry Reid, D-Nev. "It's a piece of legislation that is job creating."

The House version passed last week included more spending but fewer tax cuts. House Democratic leaders are expected to push for more spending, arguing that it is needed to get the economy moving.

Obama: 'Do Whatever It Takes'

Obama today, in his weekly address, said officials must "do whatever it takes to keep the promise of America alive in our time.

"Yesterday began with some devastating news with regard to our economic crisis," he said, invoking "another round of alarming employment figures -- the worst in more than 30 years. Another 600,000 jobs were lost in January. We've now lost more than 3.6 million jobs since this recession began."

Obama then warned, "If we don't move swiftly to put this plan in motion, our economic crisis could become a national catastrophe. Millions of Americans will lose their jobs, their homes, and their health care. Millions more will have to put their dreams on hold."

Obama also sounded a more partisan tone he's been using in recent days, describing his opponents as offering "tired old theories that, in eight short years, doubled the national debt, threw our economy into a tailspin, and led us into this mess in the first place," and "a losing formula that offers only tax cuts as the answer to all our problems while ignoring our fundamental economic challenges."

Newly named Republican National Committee chairman Michael Steele slapped right back in the Republican address.

"Democrats have controlled both branches of government for less than a month -- and you have to wonder if all that power has gone to their heads," Steele said. "For the last two weeks, they've been trying to force a massive spending bill through Congress under the guise of economic relief."

Indeed, like Obama, Congressional Democrats insist the stimulus spending is necessary.

"What's the alternative to borrowing?" asked Sen. John Kerry, D-Mass. "There are only two alternatives: You can raise taxes -- and there isn't one of them [Republicans] who'll vote to do that -- or you can cut spending. And this is not the moment to cut spending. This is the moment to prime the pump."

The Plan: Tax Cuts and Spending

The bill includes a mix of about $366 in tax cuts and tax incentives, and about $461 billion in new spending, including:

$39 billion for clean energy projects

$27 billion for highway construction, and

$88 billion for education

Before the compromise struck Friday night with Republican moderates Sen. Susan Collins, R-Maine, and Sen. Arlen Specter, R-Pa., the cost of the Senate bill was more than $930 billion.

The compromise brought that total down by reducing the amount of aid the bill would give to state governments by $40 billion and the amount education spending by $20 billion. But the compromise still includes major funding in both categories -- $39 billion for state governments and $88 billion for education.

The Senate compromise also leaves in several controversial provisions that had been ridiculed as unlikely to stimulate the economy, including:

$1 billion for the 2010 census

$650 million for the conversion to digital TV, and

$198 million for Filipino veterans of World War II

Bipartisan Breakdown?

The deal is a big step for President Obama's economic recovery plan, but without the bi-partisan support he had hoped for.

Of the 41 Republicans in the Senate, only three are expected to support the bill, just enough to get it passed. They are Collins, Specter and Sen. Olympia Snowe, R-Maine.

Obama's former campaign rival is not happy.

"I've been involved in a lot of bipartisan legislation around here," Sen. John McCain, R-Ariz., told his Senate colleagues on Friday, "but I guarantee you this is not bipartisan."

Sen. Barbara Boxer, D-Calif., said the problem is Republicans who aren't willing to accept the results of the election.

"Get over it," Boxer said. "Come and talk to us. Come and work with us. This election was about change, not the same old, same old trickle-down tax cuts that don't work."

In his weekly address, Obama also offered something of a call for bipartisanship despite decrying Republican intransigence, saying the American people "don't expect Democratic solutions or Republican solutions -- they expect American solutions."

Likely in an effort to court key Republican senators, Obama also highlighted possible stimulus gains in the states they represent, saying the Senate bill would create "16,000 [jobs] in Maine, nearly 80,000 in Indiana -- almost all of them in the private sector, and all of them jobs that help us recover today, and prosper tomorrow."

Collins and Snowe represent Maine. Mention of Indiana, which Obama will visit Monday, is a likely signal to Sen. Dick Lugar, R-Ind., an Obama friend Democrats also have targeted.

ABC News' Jake Tapper in Washington and Michael S. James in New York contributed to this report.