7 Feb 2009

US Senate trims Obama's stimulus package

8:41 pm on 7 February 2009

United States senators have reached provisional agreement on a huge stimulus package designed to revitalise the American economy.

A deal has been hammered out by Democrat and Republican negotiators for a package worth $US780 billion, which knocks more than $150 billion off the package sought by President Obama, a Democrat.

The Democrats say they are making the compromise in order to gain vital Republican support. "We trimmed the fat, fried the bacon and milked the sacred cows," Democratic Senator Ben Nelson said on the Senate floor.

With a vote expected next week, the ailing Democratic figurehead Ted Kennedy may be called to the Capitol for the first time since he collapsed during Mr Obama's inauguration.

But even if the bill passes the Senate, there's more negotiating ahead: the House of Representatives needs to agree to the Senate's revisions first.

Once a final bill is crafted and passed by both chambers, it will be sent to Mr Obama - who has demanded that a bill be on his desk by 16 February - to sign into law.

'Bipartisan it's not' - John McCain

Senate Finance Committee chairman Max Baucus reckons the compromise plan will pass with the support of three or four Republicans in the 100-member Senate - a far cry from the broad bipartisan backing that Mr Obama had originally hoped for.

Republican Senate Minority Leader Mitch McConnell denounced the pact, saying that "most of us are deeply sceptical that this will work".

Republican Senator John McCain, whom Mr Obama defeated in last year's presidential campaign while promising to work with the Republicans, scoffed at the measure - and the promise.

"You can call it a lot of things," Mr McCain said, "but bipartisan isn't one of them."

Democrat Senator John Kerry, a former presidential candidate, said the compromise package would be made up of 42% in tax cuts and 58% in new spending. "It's a good balance," he said.