Talks continue after US Senate passes stimulus bill

The Senate passage of an $838bn (€649bn) stimulus bill triggered an intense round of late-night bargaining, with the White House and key congressional Democrats seeking agreement on a final compromise aimed at battling the worst economic crisis in decades.

Democratic officials said that in deference to Senate Republican moderates, it appeared the bill that eventually goes to President Barack Obama would be in the range of $800bn (€619.5bn) dollars – less than the Senate measure or a different bill that cleared the House several days ago.

These officials added that while numerous details remained to be worked out, it appeared a major expansion of an existing tax break for homebuyers, approved in the Senate last week, would be jettisoned.

There was also pressure to scale back a Senate-passed tax break for new car buyers, according to these officials, and to drop a provision limiting compensation for top executives of companies receiving federal bailout assistance.

All three provisions add to the cost of the bill, and in the case of limitations on executive compensation could presumably be passed in different legislation later in the year.

The officials who disclosed details of the talks did so on condition of anonymity, saying they were not authorised to discuss them.

The late-night negotiations reflected an urgency on the part of the White House and the Democratic-controlled Congress to move quickly against a recession that has sent joblessness soaring.

The officials added that bargainers hoped for an agreement as early as today.

Earlier, the Senate sailed to approval of its $838bn (€649bn) economic stimulus bill with only three Republicans in favour, Senators Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania.

Within hours of the 61-37 Senate vote, White House Chief of Staff Rahm Emanuel, Budget Director Peter Orszag and other top aides to Mr Obama had made the trip to the Capitol for series of meetings that stretched well into the evening.

A top priority for Mr Obama is to restore money to build and repair schools and to give cash-starved states more help with their budget problems.

Almost €60bn (€46.4bn) for those two programmes alone was cut at the insistence of Republican moderates last week in a bargain that was crucial to getting their votes.

Ms Snowe, Ms Collins and Mr Specter are demanding that the final bill resemble the Senate measure, which devotes about 42% of its €838bn (€649bn) in debt-financed costs to tax cuts, including Mr Obama’s signature $500 (€387) tax credit for 95% of workers, with 1,000 US dollars going to couples.

The €820bn (€634.8bn) House measure is about one-third tax cuts.