By DAVID ESPO, AP Special Correspondent news.yahoo.com
WASHINGTON – House and Senate negotiators agreed to pare economic stimulus legislation below $800 billion and reached for a final deal with the White House on Wednesday on a bill designed to create millions of jobs in a nation reeling from recession.
"Time's getting short," said Sen. Susan Collins, R-Maine, one of a handful of Senate moderates whose votes are crucial to the bill's passage.
As if to underscore the urgency, President Barack Obama said executives at Caterpillar Corp. told him they would rescind some of the 22,000 layoffs they recently announced once the stimulus is signed into law.
Several Democratic officials said there was an informal deadline of Wednesday afternoon for at least tentative agreement on an overall bill, a time that coincided with a scheduled formal meeting of House and Senate negotiators.
The real decisions were made in Capitol office suites where House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and other key lawmakers, often joined by White House officials and their own aides, worked late Tuesday night and picked up again in the morning.
Sen. Max Baucus, D-Mont., one of the negotiators, said there was agreement to hold the bill to $789 billion, tens of billions below the cost of both the House and Senate bills that had cleared in recent days, and that 35 percent of the total would be in the form of tax cuts.
The reductions in the bill's size caused grumbles among liberal Democrats, who described them as a concession to the moderates, particularly Sen. Arlen Specter, R-Pa., who are under pressure from conservative Republicans to hold down spending.
The principal components of the emerging measure included money to help victims of the recession, as much as $44 billion in aid for states, which face cuts of their own as a result of lower tax receipts, and the president's proposed tax cut for lower and middle-income wage earners.
Officials said there was agreement to accept the White House's call to provide the tax break to workers who pay Social Security taxes but do not earn enough to owe income taxes, although it was possible the amount would be scaled back somewhat. The president sought $500 for individuals and $1,000 for couples.
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.
It also appeared a compromise was in the works on the administration's demand for school construction funds. Sen. Tom Harkin, D-Iowa, told reporters that $6 billion would be set aside, and officials said it would be limited to repair and modernization work.
With numerous demands for the funds in the bill, lawmakers worked to satisfy competing demands.
A Senate-passed provision giving $10 billion to the National Institutes of Health for research — a favorite of both Harkin and Specter, appeared likely to survive.
The officials who described the negotiations did so on condition of anonymity, saying they were not authorized to disclose the details of the closed-door negotiations.
Obama has spoken out repeatedly in recent days to urge Congress to act quickly in the face of the worst economic crisis since the Great Depression.
"We're at the doorstep of getting this plan through Congress, but the work is not over," he said in Springfield, Va., where he visited a construction site.
Even after the measure becomes law, he said, the challenge will be to effectively make use of the funds in an "endeavor of enormous scope and scale."
Republicans, too, took note of the size of the bill, and they said it included billions that would be wasted.
The original House bill, with a price tag of $820 billion, passed without a single Republican vote.
The $838 billion Senate bill that cleared on Tuesday had the backing of only three of 41 Republicans — but that was enough to give it the 60 votes it needed.
Collins told reporters she hoped fellow GOP lawmakers would reconsider when the final compromise comes to a vote "rather than just reflexively oppose this."
She said the negotiators had "tightened and scrubbed it" to eliminate wasteful spending.
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Associated Press Writers Andrew Taylor and Ben Feller contributed to this story.
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