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Deal on Senate stimulus bill victory for Obama

world Updated: Feb 07, 2009 12:09 IST

AP
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President Barack Obama scored a major legislative victory as Senate Democrats reached agreement with a small group of Republicans on an economic stimulus measure aimed at combatting the worst recession in decades.

"The American people want us to work together. They don't want to see us dividing along partisan lines on the most serious crisis confronting our country," said Senator Susan Collins of Maine, one of three Republican moderates who broke ranks and pledged their votes for the bill.

Democratic leaders expressed confidence the concessions they had made to Republicans and moderate Democrats to trim the measure had cleared the way for its passage. No final vote was expected before Monday.

While senators hashed out a deal on the economic stimulus plan, the president and his wife, Michelle, took daughters Malia and Sasha to see the Alvin Ailey American Dance Theater performance at the Kennedy Center.

As they entered their box seats, designated with the presidential seal, the crowd gave them a standing ovation amid cheers and snapshots. Some in the balcony above the Obamas reached down, apparently hoping the president would touch their hand. Officials put the cost of the bill at $827 billion, including Obama's signature tax cut of up to $1,000 for working couples, even if they earn too little to pay income taxes.

Also included are breaks for homebuyers and people buying new cars. Much of the new spending would be for victims of the recession, in the form of unemployment compensation, health care and food stamps.

The agreement announced on Friday night capped a tense day of backroom negotiations in which Senate Majority Leader Harry Reid, joined by White House chief of staff Rahm Emanuel, sought to attract the support of enough Republicans to pass the measure. Democrats hold a 58-41 majority in the Senate, including two independents, but it takes 60 votes to pass the bill because it would raise the federal deficit.

At $780 billion, the legislation would be smaller than the measure that cleared the House of Representatives on a party-line vote last week. It also would mean a sharp cut from the bill that has been the subject of Senate debate for a week. That measure stood at $937 billion.

Beyond the numbers, though, any agreement would keep Democratic leaders on track to fulfill their promise of delivering him a bill to sign by the end of next week.

The deal on the stimulus measure caps a difficult week in which Obama saw some of his key appointments delayed or derailed because of tax problems.

Obama earlier had ratcheted up the pressure on lawmakers as a new jobs report posted the worst results in a generation, 598,000 positions lost in January and the US unemployment rate rising to 7.6 per cent, the highest since September 1992. An estimated 3.6 million Americans have lost their jobs since the recession began. "These numbers demand action. It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work," Obama said.

"Now is the time for Congress to act." Since his January 20 inauguration, the president repeatedly has reached across the aisle to resistant Republicans as the stimulus plan has wound its way through the Democratic-controlled Congress. But even as he continued to make gestures of bipartisanship, he has sharpened his tone as he seeks to sell the pricey package to both the public and Republican lawmakers who want less spending and more tax cuts.

Obama also planned to take his message outside of the capital next week, participating in town hall-style meetings in two cities that are struggling. White House spokesman Robert Gibbs said Obama plans to visit Elkhart, Indiana and Fort Myers, Florida, on Monday and Tuesday to tell residents what his stimulus plan would mean for them.

While the Democrats' majority in the House of Representatives allowed them to pass their $819 billion version of the stimulus package even though they won no Republican support, Senate passage had proved far more difficult. If the plan passes in the Senate, both versions would have to be reconciled and more changes could still come.

At its core, the stimulus legislation is designed to ease the worst economic recession in generations, and combines hundreds of billions of dollars in new spending with tax cuts. Much of the money would go for victims of the recession in the form of welfare, unemployment compensation and health care.

There are funds, as well, for construction of highways and bridges, and it also includes a "Buy American" protectionist measure for iron and steel that has drawn strong criticism from major US trading partners including Japan, Australia and Canada. But the administration also decided to use the bill to make a down payment on key domestic initiatives, including creation of a new health technology industry and so-called green jobs designed to make the country less dependent on imported oil.

And Democrats in Congress decided to add additional huge sums for the states struggling with the recession, as well as billions more for favored programs such as parks, the repair of monuments in federal cemeteries, health and science research and more.

With Obama enjoying post-inauguration support in the polls and the economy shrinking, Democratic leaders in Congress have confidently predicted they would have a bill to the president's desk by mid-February.

But Republicans, freed of the need to defend former President George W Bush's policies, have pivoted quickly to criticize the bill for its size and what they consider wasteful spending.