Senators debate hard-fought stimulus compromise

WASHINGTON (CNN) — Senators resumed debate Saturday on a massive economic recovery package after a group of lawmakers reached a compromise that trimmed billions in spending from an earlier version.

Senate Majority Leader Harry Reid told his colleagues Friday the debate would continue into Monday. A vote could come Tuesday on the plan, which President Barack Obama has touted as a tonic for the nation’s badly battered economy.

The compromise agreement was reached Friday after days of private meetings between centrist Democrats and Republicans who felt the $900 billion price tag on the Senate’s earlier version was too high.

“There is a winner tonight,” said Sen. Joe Lieberman, an independent from Connecticut and one of the moderates whose support was crucial in efforts to corral enough votes for the plan. “It’s the American people, and they deserve it.”

Senate Democratic leaders are so confident the package will hold that Democratic staffers in the House and Senate are not waiting for the final Senate vote to hash out differences between their two bills, according to a Senate Democratic leadership source, who said behind-the-scenes negotiations were under way Saturday.

Senators had trimmed the plan to $780 billion in tax cuts and spending on infrastructure, housing and other programs that would create or save jobs.

However, Reid spokesman Jim Manley said the deal will ultimately include two amendments that have already passed with broad support — a $15,000 tax credit for 2009 home buyers and a tax deduction for those who purchase a new car. Those two measures bring the total to $827 billion. 

The key vote will still be on the $780 billion package, with a final vote to come on the package plus the amendments later.

Several senators said the compromise agreement axed money for school construction and nearly $90 million for fighting pandemic flu, among other things. A $7 billion item for energy-efficient federal buildings was cut in half, to $3.5 billion.

Eliminated, among many other items, was $40 billion for state fiscal stabilization; $1 billion for energy loan guarantees; $16 billion for school construction; $1 billion for Head Start/Early Start programs; $98 million for school nutrition; $122 million for new U.S. Coast Guard polar icebreakers and cutters, $200 million for the National Science Foundation, $300 million for federal prisons and $3.5 billion for higher education construction.

The remaining spending includes more than $76 billion for education — including college Pell grants and help for states struggling to pay for their schools — $43 billion in transportation infrastructure and more than $3 billion for job training, according to the office of a senator involved in negotiations.

Tax cuts include incentives for small businesses, a one-year fix of the unpopular alternative minimum tax and tax cuts for low- and middle-income families, said Sen. Susan Collins of Maine, the most prominent Republican negotiator in the bipartisan talks.

“Our country faces a grave economic crisis, and the American people want us to work together,” she told fellow senators. “They don’t want to see us dividing along partisan lines on the most serious crisis facing our country.”

Putting more pressure on senators to act was news Friday that employers slashed another 598,000 jobs off U.S. payrolls in January, pushing the unemployment rate to 7.6 percent.

All or nearly all Democrats are expected to support the package. But 60 votes are needed in the 100-member Senate to bring the issue up for a vote. There are 56 Democrats in the Senate and two independents who caucus with them. Results from Minnesota’s senate election — in which Democrat Al Franken appears to hold a 200-vote lead — have not been certified amid court challenges.

Democratic Sen. Ted Kennedy of Massachusetts was expected to be at the Capitol to vote on the plan, Capitol Hill sources said. Kennedy, who has been diagnosed with brain cancer, has not been on the Senate floor since collapsing during a luncheon on Inauguration Day, January 20.

The Senate began considering amendments to the plan shortly before 10 p.m. Friday, and adjourned about 12:40 a.m. Saturday.

While Democrats appeared to believe they had enough Republican support to push the compromise plan through, most GOP members still were speaking out against the plan — saying spending is not the answer to cure economic woes.

“This is not bipartisan,” said Sen. John McCain, who lost the 2008 presidential election to Obama. “If this legislation is passed, it’ll be a very bad day for America.”

Minority Leader Sen. Mitch McConnell compared the plan to President Franklin Delano Roosevelt’s “New Deal” public works program — which he said did not help the nation out of the Great Depression.

“We’re talking about an extraordinarily large amount of money, and a crushing debt for our grandchildren,” said McConnell, of Kentucky. “Now, if most Republicans were convinced that this would work, there might be a greater willingness to support it. But all the historical evidence suggests that it’s highly unlikely to work.”

If the package passes the Senate, yet another compromise — between the House and Senate versions — must be hammered out before the legislation can be sent to Obama to sign. Obama has said he would like to sign the stimulus by Presidents Day on February 16.

Source: CNN Politics