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Senators Agree to $780 Billion Stimulus After Jobs Report

Posted by tothewire on February 7, 2009

Senators Charles Schumer, left, and Ben Nelson outside Senator Harry Reid's office on Friday as the negotiating continued over President Obama's stimulus package.

Senators Charles Schumer, left, and Ben Nelson outside Senator Harry Reid's office on Friday as the negotiating continued over President Obama's stimulus package.

WASHINGTON — Spurred by a dismal unemployment report for January and prodded by President Obama, senators reached an accord on Friday evening on an economic stimulus program of some $780 billion.

Democrats succeeded, after a long day of private negotiations and intense public debate, in winning the support of enough Republicans to move the package toward a final Senate vote, where Democrats are confident of passage, given the support announced by several Republicans. Exact outlines of the accord, which is somewhat smaller than the amount originally sought by President Obama, were not immediately available, but the senators agreed to cut some spending and strip out some business tax cuts to gain enough Republican support.

Senator Harry Reid of Nevada, the Democratic majority leader, hailed the agreement. “This is a very critical juncture for our great country,” he said on the Senate floor.

The timing of the Senate vote was not clear, but Mr. Reid signaled that action could take place over the weekend. Once it the package is approved, differences between the Senate legislation and a considerably different version passed recently by the House will have to be reconciled. President Obama has said he hopes all that can be accomplished in time for him to sign the measure within 10 days.

Three centrist Republicans, Arlen Specter of Pennsylvania and Olympia J. Snowe and Susan Collins, both of Maine, were among the senators wooed by Democrats, whose efforts were bolstered by Rahm Emanuel, the president’s chief of staff, who is a former Congressman from Illinois.

Senator Reid and Mr. Emanuel reportedly met with Ms. Collins and Mr. Specter Friday evening to smooth out any remaining wrinkles. Soon afterward, Mr. Reid conferred with his fellow Democrats to gain their approval.

Gaining enough Republican support was essential, since 60 votes are generally required under Senate rules to move a bill forward. “Is it perfect?” Senator Collins asked rhetorically on the Senate floor. “No.” But what was put together is a worthy compromise, she said.

Mr. Reid singled out two negotiators, Ms. Collins and Senator Ben Nelson, a conservative Democrat from Nebraska, as “two people who got us where we are, with great work by others.”

Mr. Nelson said the negotiators had gone over the proposed package “line by line, dollar by dollar” to reach a program that could gain wide support.

The Senate negotiations and day-long public debate were given new urgency by the announcement on Friday morning that 598,000 jobs were lost in January. Democratic 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.

“While we dither, Rome burns,” Senator Dianne Feinstein, Democrat of California, said, noting that the number of unemployed in her state was greater than the total population of other states.

At the White House, 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 grown increasingly impatient with Republican resistance to the legislation.

But Republicans argued that the urgency of the moment should not make them forget their party’s principles. “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 presidential candidate who was emerging as a chief Republican opponent of the proposal.

The accord emerged after hours of talks between Democratic leaders and a bipartisan group of lawmakers seeking some reductions in the price tag of the plan. The bipartisan group led by Senators Collins and Nelson worked throughout the day to reduce the spending to about $800 billion, in line with Mr. Obama’s initial request.

A memorandum circulating Friday afternoon listed proposed cuts that would bring a net reduction of about $80 billion from a measure that had grown to more than $900 billion. The document showed that money would be eliminated from education programs such as Head Start, criminal justice initiatives that included money for additional police, and some future spending on food stamp programs. The proposal would add spending on Pentagon programs, environmental cleanup and some transportation programs.

“This is a critical day for this new Congress and our country,” Senator Reid 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.”

“Lets not get dug in,” said Senator Joseph I. Lieberman, independent of Connecticut. “This is not a perfect bill, but it clearly is a very good bill. Most important, of all, it is a proposal that will pump money into American economy, into the pockets of working Americans and to businesses throughout this country.”

President Obama seized on Friday’s economic news — the Labor Department’s report that the unemployment rate shot up in January — to step up the pressure on the lawmakers. “Last month, another 600,000 Americans lost their jobs,” Mr. Obama said. “That is the single worst month of job loss in 35 years. The Department of Labor also adjusted their job loss numbers for 2008 upwards, and now report that we have lost 3.6 million jobs since this recession began.

“I am sure that at the other end of Pennsylvania Avenue, members of the Senate are reading these same numbers this morning. I hope they share my sense of urgency and draw the same, unmistakable conclusion: The situation could not be more serious. These numbers demand action. It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work. It is time for Congress to act.”

Senator Joseph I. Lieberman, independent of Connecticut, said he was worried that the Senate was becoming like a gathering of firefighters arguing about “how to get to the fire while the house keeps burning.”

Mr. Reid’s Republican counterpart, Senator Mitch McConnell of Kentucky, had insisted that his party colleagues would not sign on to “an aimless spending spree that masks as a stimulus.”

President Obama, after signaling for the last several weeks that he wanted to work with Republicans on the bill and accommodate their requests, suggested in sometimes-sharp language on Thursday night that his patience with the other party is wearing thin, and that the Democratic Party’s ideological approach should take precedence.

“Don’t come to the table with the same tired arguments and worn ideas that helped to create this crisis,” Mr. Obama told a gathering of House Democrats in Williamsburg, Va., referring to Republican demands for more tax cuts.

“We are not going to get relief by turning back to the very same policies that for the last eight years doubled the national debt and threw our economy into a tailspin,” Mr. Obama said. “We can’t embrace the losing formula that says only tax cuts will work for every problem we face, that ignores critical challenges like our addiction to foreign oil, or the soaring cost of health care, or falling schools and crumbling bridges and roads and levees.”

Stepping up his pressure on both parties on Capitol Hill to act swiftly to finish work on the bill in the next 10 days, the president said that the American people had not voted for “the false theories of the past” when they elected him in November, and that it was time to set aside “phony arguments and petty politics.”

The Democrats will need the support of at least two Republicans and probably more to win passage of the Senate’s stimulus bill, which for procedural reasons will require 60 votes. The Democrats now hold 58 seats, but only 57 have been voting this week. Senator Edward M. Kennedy of Massachusetts has been absent because of illness, but he is reportedly ready to come to the Capitol for a vote on the stimulus package.

By CARL HULSE and DAVID M. HERSZENHORN

David Stout contributed reporting.

http://www.nytimes.com

 

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