Deal reached in Senate on economic stimulus plan
Obama warns economic crisis would turn into catastrophe without package
By Robert Schroeder, MarketWatch
Last update: 6:49 p.m. EST Feb. 6, 2009
WASHINGTON (MarketWatch) -- Senators reached a tentative deal on a $780 billion economic stimulus plan late Friday, reports said, potentially clearing the way for a vote later Friday night on the huge package of spending and tax cuts.
Senators have been working to whittle down the overall cost of the package, aiming at a price tag of about $800 billion. The plan had grown to nearly $1 trillion as lawmakers loaded it up with amendments.
The deal was reached following the latest batch of bad news for the U.S. economy, with the Labor Department reporting nonfarm payrolls fell by a seasonally adjusted 598,000 in January.
Speaking at the White House Friday morning, President Barack Obama said it was "inexcusable" for the measure to get bogged down "while millions of Americans are being put out of work."
"If we drag our feet and fail to act, this crisis will turn into a catastrophe," Obama said. "The bill before Congress isn't perfect, but it is absolutely necessary," he said.
Obama spoke shortly after the Labor Department report. The U.S. unemployment rate jumped to 7.6%. See full story.
Senators have been working both to amend the bill and find ways to cut it down. A tax break aimed at home buying alone added $35.5 billion to its overall cost. Another amendment giving tax breaks to buyers of new cars and light trucks pushed the package's price up by an estimated $11 billion.
"We are nearing the time when negotiations must be completed and action must begin," said Senate Majority Leader Harry Reid on Friday morning.
Reid and House Speaker Nancy Pelosi both pointed to the jobs report and said it's time to pass the plan and send it to Obama for signature.
"With a record 3.6 million American jobs lost in just the last 13 months, we cannot afford to delay legislation that will create new jobs and invest in a stronger economy for years to come," said Pelosi in a statement Friday morning.
Pelosi said Congress must complete the legislation next week.
Obama is hitting the road early next week to sell the stimulus plan, traveling to Indiana and Florida to hold town hall meetings. On Monday, he'll travel to Elkhart, Ind., and on Tuesday he'll go to Ft. Myers, Fla., press secretary Robert Gibbs told reporters Friday. Elkhart's unemployment rate recently jumped to 15.3%, and Ft. Myers's climbed to 10%, Gibbs said.
"It's important to go directly to where people are hurting," Gibbs told reporters Friday.
Once passed, the Senate bill will have to be reconciled with the House version before being sent to Obama. Some Republicans including Rep. John Boehner, the party's leader in the House, are pushing for more tax cuts to be included in the bill but Obama is resisting loading it up with tax breaks.
"We can't embrace the losing formula that says only tax cuts will work for every problem we face," Obama said Thursday night at a retreat for House Democrats. End of Story
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