US congress set to pass $798bn stimulus plan
Washington, February 13, 2009
The US Congress on Friday is expected to pass a $789 billion economic stimulus package that is aimed at unleashing large spending and tax cuts to help dig the economy out of a 14-month recession.
The Democratic-controlled House of Representatives and Senate are expected to approve the emergency package, giving President Barack Obama a political victory but falling short of his goal of broad Republican backing.
The president has urged 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.
'When they finally pass our plan, I believe it will be a major step forward on our path to economic recovery,' Obama said on Thursday at a plant owned by heavy equipment maker Caterpillar Inc.
Obama said that the company's chief executive told him that he could rehire some of the employees that have been laid off once the stimulus plan was approved.
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 were able to move ahead with the package because they trimmed it down 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