The U.S. Congress Friday was expected to pass a $789 billion economic stimulus package aimed at unleashing large spending and tax cuts to help yank the economy out of a 14-month recession.
Quick approval of the emergency package would give President Barack Obama a political victory but fall short of his goal of broad Republican backing.
The president has urged the Democratic-controlled Congress to pass the stimulus bill before the end of the upcoming holiday weekend so he can sign it into law. Its goal is to create or save 3.5 million jobs in an economy that has seen massive job losses since the recession began in December 2007.
The House of Representatives was preparing to vote by midday and the Senate was expected to follow in the early evening, but there was still no final agreement between Senate Democratic and Republican leaders to do so.
While Obama has pointed to heavy equipment maker Caterpillar Inc as an example of a company that has said it could begin rehiring again after the bill passed, his top economic adviser cautioned it would be a slow recovery.
"It is going to take time to work this through," Lawrence Summers, director of the White House National Economic Council, said on NBC’s "Today Show." "We’re not promising that you’re going to see some miracle cure, some silver bullet for the economy."
Most Republicans opposed the stimulus plans Democrats put forward, saying they expanded government spending too much and did not include enough tax cuts that they argued would better boost the ailing economy.
The final package includes $507 billion in spending and money for social programs like the Medicaid health insurance program as well as $282 billion in tax cuts that include small tax incentives to spur home and automobile sales as well as business tax deductions.
"In my view, and in the view of my Republican colleagues, this is not the smart approach," Senate Minority Leader Mitch McConnell said.
Democrats trimmed down the package from as much as $937 billion, which brought them three Republican votes that were needed to overcome procedural hurdles in the Senate.
Senators Susan Collins, Olympia Snowe and Arlen Specter agreed to back the legislation if it was pared down to below $800 billion. To achieve that, one major cut was tens of billions of dollars from grants to help states plug growing budget gaps.
Money for building new schools was also stripped out and congressional negotiators also severely scaled back tax incentives aimed at boosting flagging home and car sales that were deemed too expensive.
Still, the measure includes almost $54 billion to help states with their budget deficits and to modernize schools, $27.5 billion for highway projects, $8.4 billion for public transportation and $9.3 billion for Amtrak and high-speed rail service, among other projects.
(Reuters)
