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Senators Reach Accord on Stimulus Plan as Jobs Vanish

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  • Greg Cannon
    http://www.nytimes.com/2009/02/07/us/politics/07stimulus.html?hp Senators Reach Accord on Stimulus Plan as Jobs Vanish By CARL HULSE and DAVID M. HERSZENHORN
    Message 1 of 1 , Feb 6, 2009
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      Senators Reach Accord on Stimulus Plan as Jobs Vanish

      Published: February 6, 2009

      WASHINGTON — Senate Democrats reached an agreement with Republican moderates on Friday to pare a huge economic recovery measure, clearing the way for approval of a package that President Obama said was urgently needed in light of mounting job losses.

      The deal, announced on the Senate floor, was a result of two days of tense negotiations and political theater. Mr. Obama dispatched his chief of staff to Capitol Hill to reassure senators in his own party and called three key Republicans to applaud them for their patriotism.

      Earlier, when it looked as if a vote might take place Friday night, officials said, a government plane was dispatched to Florida to bring back Senator Edward M. Kennedy, a Massachusetts Democrat who has brain cancer.

      The fine print was not immediately available, and the numbers were shifting. But in essence, the Democratic leadership and two centrist Republicans announced that they had struck a deal on about $110 billion in cuts to the roughly $900 billion legislation — a deal expected to provide at least the 60 votes needed to send the bill out of the Senate and into negotiations with the House, which has passed its own version.

      The pact, which is expected to be approved in the next few days, was concluded just hours after the Labor Department announced that 598,000 jobs were lost in January. The contraction in jobs is already worse than in any other recession since at least the early 1980s. And economists warn that several more shoes are about to drop, a message that added urgency to the Senate deliberations.

      As the negotiations were under way, lawmakers said it was time to stop quibbling about the exact parameters of the legislation — which mixes safety-net spending, tax cuts and a huge infusion of dollars into federal programs — and to begin work toward a final agreement that could be sent to Mr. Obama next week.

      “Our country can’t wait another day for another approach,” said Senator Ben Nelson, a Nebraska Democrat who is a leader of the bipartisan coalition that hammered out the agreement.

      The details were negotiated at an afternoon meeting in the office of the Senate majority leader, Harry Reid of Nevada, involving Mr. Reid, other top Democrats and two Republican senators, Susan Collins of Maine and Arlen Specter of Pennsylvania. After they came to terms, the senators brought in the White House chief of staff, Rahm Emanuel, for assurance that the deal was acceptable to the administration. Mr. Emanuel signaled it was.

      “With today’s unemployment numbers reaching more than 3.6 million workers,” Mr. Emanuel said after the session, “delay and failure were not an option.”

      Mr. Obama also called the two Republicans, as well as Senator Olympia J. Snowe of Maine, another Republican expected to support the agreement, to acknowledge that they were acting against pressure from their party and, one official said, to thank them for their patriotism in helping to advance the bill at a critical time.

      Earlier in the day, Mr. Obama urged Congress to act expeditiously. “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,” said the president, who has recently shown less patience for Republican resistance to the legislation.

      Most Senate Republicans remained against the measure, which they criticized as a case study in excessive spending that would do little to lift the economy. Some conservatives indicated Friday night that they would push for time to study the new legislation before any final vote.

      “We want to stimulate the economy, not mortgage the future of our children and grandchildren by the kind of fiscally profligate spending embodied in this legislation,” said Senator John McCain of Arizona, the defeated Republican presidential nominee, who has emerged as a chief opponent of the proposal.

      The cuts proposed by the Senate included an array of popular spending programs that critics said should not be part of a fiscal recovery bill, even if they represent laudable policy goals, because they would not deliver a quick enough jolt to the economy.

      The biggest cut, roughly $40 billion in aid to states, was likely to spark a fierce fight during negotiations with the House over the final bill. Many states, hit hard by the recession, face wrenching cuts in services and layoffs of public employees as they struggle to comply with laws requiring them to balance their budgets.

      Economists say that while aid to states does not provide a new boost to the economy, it does prevent states from making cuts that would directly undercut the federal stimulus program — like laying off workers even as Washington is trying to create jobs.

      When debate began earlier this week, the price tag on the Senate version of the stimulus bill was roughly $884 billion but that number grew to more than $900 billion as senators agreed to add provisions, including tax breaks totaling $30 billion for purchases of homes and cars.

      Lawmakers said that by poring over the 736-page bill they had excised about $110 billion, bringing the total cost to about $780 billion — $40 billion less than the stimulus bill approved by the House last week. Because of consumer tax breaks and spending for health research that had been added in the Senate, the new total for the measure could be about $820 billion. But even the senators behind the compromise were uncertain of the number.

      In addition to the large cut in state aid, the Senate agreement would cut nearly $20 billion that had been proposed for school construction; $8 billion to refurbish federal government buildings and make them more energy efficient; $1 billion for the early childhood program Head Start; and $2 billion from a plan to expand broadband data networks in rural and underserved areas.

      The administration had initially hoped that it could win the support of as many as 80 senators, but that goal disappeared after House Republicans voted unanimously against the measure. As questions were raised about the total spending, getting even three or four Republican senators to sign on became difficult.

      Ms. Collins said she believed the changes significantly improved the measure. Mr. Specter said that while he still had reservations about the measure, he had come to accept Mr. Obama’s push to enact the economic plan by the middle of this month.

      “I believe we do have to act,” Mr. Specter said, “and under the circumstances this is the best we can do.”

      But several other Republicans who had taken part in the bipartisan talks said they could not support the compromise.

      “Unfortunately, there was too much in the Democratic counterproposal that was not stimulative,” said Senator George V. Voinovich, Republican of Ohio, “and that did not provide the jump-start our economy so desperately needs.”

      The Senate Republican leader, Mitch McConnell of Kentucky, said most Republicans remained unconvinced that the package would reinvigorate the economy.

      “You have to balance the likelihood of success versus the crushing debt that we’re levying on the backs of our children, our grandchildren and, yes, their children,” Mr. McConnell said.

      Mr. Reid, the majority leader, called on Republicans to get behind the plan.

      “This is a critical day for this new Congress and our country,” he said. “Faced with this grave and growing economic crisis, Republicans must decide today whether they will join the president and Congressional Democrats on that road to recovery.”

      David Stout contributed reporting.
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