Stimulus bill cleared for House, Senate votes

Wed Feb 11, 2009 6:55pm EST
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By Richard Cowan and Jeremy Pelofsky

WASHINGTON (Reuters) - U.S. congressional negotiators on Wednesday reached a deal on $789 billion in emergency spending and tax cuts, handing a big victory to President Barack Obama in his effort to pull the economy out of a steep tailspin.

Negotiators in the House of Representatives and Senate overcame an apparent last-minute snag on funding to help states plug growing budget deficits and money for school construction that Obama had sought.

The huge package is aimed at reversing a deep recession and news of the agreement sent U.S. stock markets higher. The negotiators approved the compromise, setting up votes in the House on Thursday and likely soon after in the Senate.

Obama, whose early hopes for strong bipartisan support for the strategy were crushed by reluctant Republicans, said the deal would help save or create millions of jobs and "get our economy back on track."

The compromise stimulus package is "a plan that will provide immediate tax relief to families and businesses, while investing in priorities like health care, education, energy, and infrastructure that will grow our economy once more," he said in a statement.

Without a stimulus bill, Obama has said the country faces a possible economic "catastrophe."

With some 3.6 million jobs shed since the recession began in December 2007, heavy equipment maker Caterpillar Inc would be able to to rehire some of its 20,000 laid-off workers if the stimulus package passed, Obama said.

About 36 percent of the package is geared toward tax cuts, with the rest in spending, according to a Senate aide.   Continued...

<p>Senate Majority Leader Senator Harry Reid addresses the Senate floor on Capitol Hill, February 6, 2009. REUTERS/REUTERS TV</p>