Senate Democrats have accepted a smaller economic stimulus package that was proposed by a bipartisan team, key senators announced Friday, paving the way for full Senate passage.
The compromise would cap the package at $780 billion. The package had grown to $937 billion after senators added to it, and President Barack Obama has said he'd accept a deal around $800 billion.
Sen. John Kerry, D-Mass., said the $780 billion proposal breaks down this way: 42 percent is for tax cuts and 58 percent is new spending.
Earlier, the package teetered after hours of backroom meetings failed to produce an agreement that could attract crucial GOP votes.
Senate Majority leader Reid, D-Nev., had met with key Republican moderates Susan Collins of Maine and Arlen Specter of Pennsylvania. Both had hoped to pare back nonessential spending items in the measure, while a third moderate, Olympia Snowe, R-Maine, worked with Democrats to trim the bill's $340 billion in tax cuts by perhaps $25 billion.
Reid suggested to reporters that he had two GOP backers for the bill but needed at least one more because neither wants to be the crucial 60th vote if all 58 members of the Democratic caucus support Obama.
Senate Majority leader Reid, D-Nev., had met with key Republican moderates Susan Collins of Maine and Arlen Specter of Pennsylvania. Both had hoped to pare back nonessential spending items in the measure, while a third moderate, Olympia Snowe, R-Maine, worked with Democrats to trim the bill's $340 billion in tax cuts by perhaps $25 billion.
Reid suggested to reporters that he had two GOP backers for the bill but needed at least one more because neither wants to be the crucial 60th vote if all 58 members of the Democratic caucus support Obama
Officials strongly suggested that Sen. Edward M. Kennedy’s vote would be needed to assure passage. The Massachusetts Democrat, battling a brain tumor, has been in Florida in recent days and has not been in the Capitol since suffering a seizure on Inauguration Day more than two weeks ago. The senator’s office did not comment.
'All out blitz' next weekObama tried to apply pressure Friday, calling days of delay "inexcusable" and announcing trips to Indiana and Florida next Monday and Tuesday to push for passage. Obama also planned a primetime news conference on Monday night.
White House senior adviser David Axelrod told a meeting of House Democrats Friday that there will be "an all-out blitz" next week to sell the bill, according a lawmaker who attended, NBC reported.
Axelrod touted poll numbers that he said showed overwhelming support among the public for the measure.
"We will get this done and you will have a great story to tell," Axelrod told the Democrats, according to the lawmaker who spoke to NBC News.
Sen. Claire McCaskill, a Missouri Democrat who is also part of the bipartisan group, said Republican resistance had centered on the cost and the precedent of Obama's stimulus plan.
Some Republicans are against the notion of having the federal government take on responsibilities that historically have been handled by the states, she said. "They're arguing about the precedent we're setting of the federal government beginning to do things like school construction," she said.
Collins circulated a roster proposing $88 billion worth of net cuts from the measure. She proposed eliminating money in the bill for K-12 education while boosting funding for Pentagon operations, facilities and procurement by $13 billion.
If a compromise on trimming the bill cannot be reached — or if it will not fly with Democratic loyalists — the alternative for Senate Democrats to try to ram the measure through with just a few Republican supporters, such as Snowe.
Reid said on Thursday night that if progress stalled on the bill he would file a motion to set up a showdown procedural vote for Sunday.
McCain criticizes spending Sen. John McCain, R-Ariz., took to the Senate floor Friday to argue that the federal government is not as efficient in spending money as the private sector.
"This is something that has been absolutely clear for years. And it's the reason we don't have socialism in this country," he said.
He cited a report from the Congressional Budget Office, which noted growing government debt would crowd out private investment.
The CBO report, released Wednesday, estimated that the stimulus bill "would reduce output slightly in the long run. ... The principal channel for this effect is that the legislation would result in an increase in government debt. ... In economic parlance, the debt would 'crowd out' private investment."
But the CBO said that the Senate bill would help create jobs in the short term: by the fourth quarter of next year, it would increase employment by 1.3 million to 3.9 million jobs, CBO estimated.
Delay 'inexcusable,' Obama says
Obama on Friday decried as "inexcusable and irresponsible" the delay, noting that an estimated 3.6 million Americans had lost their jobs since the recession began.
Obama's remarks, delivered while naming of an outside economic team of advisers, were some of his most direct and pointed in support of the massive economic package that the Senate was considering on Friday. Obama acknowledged the plan was not perfect and pledged to work with lawmakers to refine the measure.
"Every day that Washington fails to act, that recovery is delayed," he said.
The president named his economic team of advisers as the nation dealt with more bad news in the unemployment report for January. Employers slashed payrolls by 598,000, the most since the end of 1974, catapulting the unemployment rate to 7.6 percent. The rate is the highest since September 1992.
"These numbers demand action. It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work," Obama said.
"That's 3.6 million Americans who wake up every day wondering how they are going to pay their bills, stay in their homes, and provide for their children," he said.
'Painful' cuts for Democrats
Sen. Dick Durbin, D-Ill., told reporters that some of the proposed cuts would be "painful" for Democrats in the area of education and money to states.
Republican leader Mitch McConnell of Kentucky said the GOP is ready to support a bill, "but we will not support an aimless spending spree that masquerades as a stimulus."
He added: "Putting another $1 trillion on the nation's credit card isn't something we should do lightly. We need to get a stimulus. But more importantly, we need to get it right."
The massive measure is a key early test for Obama, who has made it the centerpiece of his fledgling presidency.
The bill still contains a "Buy American" protectionist measure that drew strong criticism from major U.S. trading partners including Japan, Australia and Canada.
In the face of warnings by Obama that such rules could cause trade wars, the Senate has agreed to specify in the bill that U.S. international trade agreements should not be violated. It rejected, however, an effort by McCain, Obama's opponent in last year's presidential campaign, to remove the stipulations altogether.
