Economic stimulus legislation at the heart of President Barack Obama's recovery plan is on trackfor final votes Friday in the House and Senate after a dizzying final round of bargaining thatyielded agreement on tax cuts and spending totaling $789 billion.
Obama, who has campaigned energetically for the legislation, welcomed the agreement, sayingit would "save or create more than 3.5 million jobs and get our economy back on track."
The $500-per-worker credit for lower- and middle-income taxpayers that Obama outlined duringhis presidential campaign was scaled back to $400 during bargaining by the Democratic-controlledCongress and White House. Couples would receive $800 instead of $1,000. Over two years, that movewould pump about $25 billion less into the economy than had been previously planned.
Officials estimated it would mean about $13 a week more in people's paychecks this year whenwithholding tables are adjusted in late spring. Next year, the measure could yield workers about $8a week. Critics say that's unlikely to do much to boost consumption.
"The most highly touted tax cut in the original proposal now translates into $7.70 a week formiddle-class workers," said Senate GOP Leader Mitch McConnell of Kentucky.
Millions of people receiving Social Security benefits would get a one-time payment of $250under the agreement, along with veterans receiving pensions, and poor people receiving SupplementalSecurity Income payments.
An additional $46 billion would go to transportation projects such as highway, bridge andmass transit construction; many lawmakers wanted more.
Brendan Daly, spokesman for Speaker Nancy Pelosi, D-Calif., and Don Stewart, an aide toMcConnell, said final votes are likely in the House and Senate on Friday.
The Obama plan offers a 60 percent subsidy to help unemployed people pay health insurancepremiums under the COBRA program and divvies up $87 billion among the states to help them withtheir Medicaid costs for the next two years. It provides $19 billion to modernize healthinformation technology systems, even though such funding will create few jobs right away.
To tamp down costs, several tax provisions were dropped or sharply cut back. A provisionpopular with Republicans and the big business lobby that would have awarded about $54 billion tomoney-losing businesses over the next two years was instead limited to small businesses, greatlyreducing its cost.
A $15,000 tax credit for anybody buying a home over the next year was dropped; instead,first-time homebuyers could claim an $8,000 credit for homes bought by the end of August. Carbuyers could deduct the sales tax they paid on a new car but not the interest on their car loans.
But nothing could shake negotiators from insisting on including $70 billion to sheltermiddle- to upper-income taxpayers from the alternative minimum tax, originally passed a generationago to make sure the super-rich didn't avoid taxes.
The move is aimed at easing headaches that would follow if Congress passed it later in theyear - rather than creating jobs. The Congressional Budget Office estimates that provision willhave relatively little impact on the economy.
In late-stage talks, Obama and Senate Majority Leader Harry Reid, D-Nev., pressed for $8billion to construct high-speed rail lines, quadrupling the amount in the bill that passed theSenate on Tuesday.
Reid's office issued a statement noting that a proposed Los Angeles-to-Las Vegas rail mightget a big chunk of the money.
Scaling back the bill to levels lower than either the $838 billion Senate measure or theoriginal $820 billion House-passed measure caused grumbling among liberal Democrats, who describedthe cutbacks as a concession to the moderates, particularly Sen. Arlen Specter, R-Pa., who arefeeling heat from constituents for supporting the bill.
Specter played an active role, however, in making sure $10 billion for the NationalInstitutes of Health, a pet priority, wasn't cut back.
After final agreements were sealed Wednesday afternoon, staff aides worked into the nightdrafting and double-checking in hopes of officially unveiling the measure Thursday.
