WASHINGTON — Moving with lightning speed, Congress and the White House agreed today on a compromise $790 billion economic stimulus bill designed to create million jobs in a nation reeling from recession. President Barack Obama could sign the measure within days.
“More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95 percent of American workers,” said Senate Majority Leader Harry Reid at a Capitol news conference where he was joined by moderates from both parties whose support is essential for the legislation’s final passage.
House Speaker Nancy Pelosi, D-Calif., Reid’s partner in negotiations over more than 24 hours, initially withheld public approval in a lingering dispute over federal funding for schools. But her spkesman, Brendan Daly, said more than two hours after Reid’s announcement, “We are moving forward with this legislation, which will create or save more than 3 million jobs.”
Obama estimated 3.5 million in his own celebration of the agreement. He said it would “get our economy back on track.”
The emerging legislation is at the core of Obama’s economic recovery program, and includes help for victims of the recession in the form of expanded unemployment benefits, food stamps, health coverage and more, as well as billions for states that face the prospect of making deep cuts in school aid and other programs.
Another provision will mean a one-time payment of $250 for millions of beneficiaries who receive Social Security, Supplemental Security Income and veterans pensions and disability, according to officials.
The measure also preserves Obama’s signature tax cut — a break for millions of lower and middle income taxpayers. Wage-earners who don’t make enough to pay income taxes would get a reduction in the Social Security and Medicare taxes they pay.
The president also won money for two other administration priorities — information technology in health care, and “green jobs” to make buildings more energy-efficient and reduce the nation’s reliance on foreign oil.
The bill “will be the beginning of the turnaround for the American economy,” predicted Sen. Joseph Lieberman, the independent from Connecticut.
Republicans couldn’t have disagreed more.
“It appears that Democrats have made a bad bill worse by reducing the tax relief for working families in order to pay for more wasteful government spending,” said Rep. John Boehner of Ohio.
The events capped a frenzied 24-plus hours that began at mid-day Tuesday when the Senate approved its original version of the bill on a party-line vote of 61-37. Reid, Pelosi and White House Chief of Staff Rahm Emanuel plunged into a series of meetings designed to produce agreement in time for Obama to sign the bill by mid-month.
Pelosi was conspicuously absent from today’s news conference in which members of the Senate announced the agreement. But moments later, Reid arrived in her office, and the two talked by phone with Emanuel, according to officials who spoke on condition of anonymity.
Officials had said previously that one of the final issues to be settled was money for school modernization, a priority for Pelosi as well as Obama and one on which they differed with Collins and other moderates whose votes will be essential for final Senate approval.
There also was last-minute disagreement about a House proposal that could direct education funds to schools even if a state’s governor didn’t approve, they said, a squabble that one official said related principally to South Carolina.
Stocks moved higher in the moments after Reid stepped to the microphone just outside the Senate chamber. The Dow Jones industrials, which plunged 382 points on Tuesday, rose 51 points for the day.
Obama has been campaigning energetically for the legislation in recent days, saying it was essential to avoid turning what is already the worst economic crisis in a generation into a catastrophe.
As if to underscore the urgency, he said a few hours before the agreement was announced that machinery giant Caterpillar Inc. plans to rescind some of the 22,000 layoffs the firm recently announced — once the stimulus is signed into law.
Scaling back the bill to levels lower than either the $838 billion Senate measure or the original $820 billion House-passed measure caused grumbles among liberal Democrats, who described the cutbacks as a concession to the moderates, particularly Sen. Arlen Specter, R-Pa., who are under pressure from conservative Republicans to hold down spending.
Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles.
School construction was a problem apart from all others.
Sen. Tom Harkin, D-Iowa, said $6 billion would be set aside, and officials said it could be spent only on repair and modernization work, a limitation designed to appease the moderates.
But officials said House Democrats were holding out for as much as $9 billion.
With numerous demands for the funds in the bill, lawmakers worked to satisfy competing demands.
A Senate-passed provision to give $10 billion to the National Institutes of Health for research — a favorite of both Harkin and Specter, appeared likely to survive.