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House and Senate Democratic leaders, negotiating into the night to forge a compromise with moderate Republicans, reached agreement Wednesday on a $789 billion economic recovery bill that President Barack Obama has called critical to pulling the country out of its worst financial crisis since the Great Depression.
The bill, slimmed down and reworked to win the few Republican votes needed to assure final approval by the Senate, would finance infrastructure and construction projects, extend unemployment benefits, subsidize health care coverage for people out of work and provide tax relief for many. Democrats say it will create or preserve 3.5 million jobs nationwide. The House could vote on the bill as early as today, and the Senate soon afterward.
Republicans lined up early against the bill, saying it was bloated with unnecessary government spending, featured too few tax cuts, and would substantially increase the national debt. Until the three Republican moderates defected late last week, it remained possible that the minority would be able to delay the bill from moving forward and perhaps force radical changes.
Some Democrats complained that the package was not big enough but said they had no choice but to accept it if the measure was to escape a Republican filibuster in the Senate. And the stimulus package was both the first major initiative of the Obama administration and a critical first step in its plan for reviving the nation's economy.
"There is no choice here, colleagues," Senate Finance Committee chairman Max Baucus, D-Mont., told senators gathered in an ornate room in the Capitol to seal the deal. "We must enact this legislation to get jobs in this country."
While the agreement came faster than many on Capitol Hill expected, it didn't arrive without moments of high drama.
At one point Wednesday, Senate Democrats enthusiastically declared to the media that an agreement had been struck — only to discover moments later that no House members had shown up to put their stamp of approval on the final details. House leaders, whose members had voted for a substantially larger measure, refused to acknowledge that any deal had been reached at all.
That led to a two-hour session in House Speaker Nancy Pelosi's office where intensive efforts were made to resolve a sticking point: the exact terms of a provision authorizing money for school renovation.
Support from three moderate Republicans, Sens. Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania, was necessary to avoid a filibuster by Republicans in the Senate. The three, who helped shape the package approved by the Senate, said they would not support a final bill that did not reflect the more than $100 billion in spending cuts they helped slice out of the bill last week.
As a result, almost $50 billion had been slashed from the bill that passed the Senate on Tuesday.
But House spending provisions involving aid to budget-strapped state governments were added during the negotiations. The provisions were important to the White House, which took on a leading role in pushing the parties to an agreement in last 24 hours.
The expenditures were offset in the bill by eliminating a provision that would expand Medicaid benefits and the tweaking of several tax cut provisions concerning, among other things, the purchase of homes and cars.
Late Wednesday, after the deal had been struck, Obama thanked "the Democrats and Republicans in Congress who came together around a hard-fought compromise that will save or create more than 3.5 million jobs and get our economy back on track."
The speed of the negotiations was attributable in part to the presence of a team from the White House, which injected itself deeply into the process. The president's chief of staff, Rahm Emanuel, met with members late Tuesday night, leading an administration lobbying team that also included budget director Peter Orszag, deputy budget director Rob Nabors and congressional liaison Phil Schiliro.