Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Europe's Plan for Putin - Will Russian Leader Bend After New Sanctions? (part 2)

Read more

DEBATE

Europe's Plan for Putin - Will Russian Leader Bend After New Sanctions?

Read more

FOCUS

Pakistan's Ahmadis living in fear of extremist attacks

Read more

WEB NEWS

Web users show solidarity with Iraqi Christians

Read more

THE INTERVIEW

Gilles Kepel, Islamic and Arab world specialist

Read more

BUSINESS DAILY

Argentina braced for another debt default

Read more

DEBATE

Too Late for Sanctions? Pressure Mounts on Russia over Ukraine (part 2)

Read more

DEBATE

Too Late for Sanctions? Pressure Mounts on Russia over Ukraine

Read more

MEDIAWATCH

'What would you do?'

Read more

  • US and EU slap Russia with fresh sanctions over Ukraine

    Read more

  • Scores killed as Israel ramps up Gaza bombardment

    Read more

  • Graphic: Ebola spreads across West Africa

    Read more

  • In pictures: ن - a sign of support for Iraq’s persecuted Christians

    Read more

  • Calls mount to ban France’s ‘violent’ Jewish Defence League

    Read more

  • Venezuela: Hugo Chavez’s ‘little bird’ strikes again

    Read more

  • France extradites suspected Jewish Museum shooter to Belgium

    Read more

  • Video: How tourism is helping Rwanda’s gorillas, ex-poachers

    Read more

  • Rare Sri Lankan leopard cubs born in French zoo

    Read more

  • France evacuates its nationals from Libya

    Read more

  • US says Russia violated arms treaty by testing cruise missile

    Read more

  • Argentina in last-ditch effort to avert default

    Read more

  • Karzai’s cousin killed in Afghan suicide attack

    Read more

  • Libya oil tanker fire blazes out of control

    Read more

  • In pictures: From Gaza to Mosul, bittersweet end of Ramadan for Muslims

    Read more

  • Moroccan police arrest French al Qaeda recruiter

    Read more

Americas

Congress reaches deal on Obama stimulus plan

Video by Kate WILLIAMS

Latest update : 2009-02-12

The US House of Representatives and the Senate have reached a preliminary agreement on a downsized $789 billion economic stimulus package. Both chambers could begin voting on the final bill as early as Thursday.

REUTERS - U.S. lawmakers prepared on Thursday to pass a $789 billion stimulus package to revive the struggling economy in a victory for President Barack Obama that some warned may have costly consequences.

 

The new president, three weeks on the job, had wanted broad bipartisan support for the economic rescue plan but deep differences with most Republicans over the size and scope of the plan prevented him from achieving that goal.

 

Instead, just a handful of Republicans are expected to vote for the measure which includes tax credits for individuals and families, tens billions of dollars for infrastructure projects and aid for the growing rolls of unemployed as well as assistance for those without health care.

 

Government data released on Thursday showed the number of U.S. workers filing new claims for unemployment benefits eased last week but by less than expected, showing the labor market in the grip of a deep recession.

 

The stimulus package is split 36 percent for tax cuts and 64 percent in spending and other provisions, just below the 40/60 split Obama called for in his effort to begin pulling the economy out of the recession that started in December 2007.

 

The stimulus package was finalized after marathon talks between a small group of negotiators in the House of Representatives and Senate. Both chambers may vote on the final bill as early as Thursday, but the timetable could slip.

 

One of the criticisms of the plan is that it will cause the swollen U.S. budget deficit to grow even larger. Before factoring in the latest stimulus plan, U.S. government bond dealers estimated the 2009 deficit would top $1.6 trillion.

 

"Combine this new spending and the borrowing it will require, with the trillions of dollars still needed for the banking system, and we are about to test the outer limits of our national balance sheet," the Wall Street Journal said in an editorial.

 
Uncharted territory
 

"We aren't deficit scolds, but these levels are uncharted territory, especially if any economic recovery is weak because the spending doesn't stimulate," the paper said.

 

As part of his campaign to build support for the package, Obama will fly to Peoria, Illinois on Thursday to visit a factory owned by heavy equipment maker Caterpillar Inc, which he has said would rehire some laid-off workers if the stimulus is approved.

 

"We're at the doorstep of getting this plan through the Congress, but the work is not over," Obama said. "When we do, the challenge will shift to administering successfully this endeavor of enormous scope and scale."

 

Obama had demanded that Congress act before the end of the coming holiday weekend in the hope that the stimulus would begin to create and save up to 4 million jobs. Senators put the jobs number closer to 3.5 million under the compromise deal.

 

Passage of the bill in the Senate has hinged on the support of a handful of moderate Republicans and negotiators agreed to scale back some proposals to win their backing.

 

Three moderate Republican senators, Susan Collins, Olympia Snowe and Arlen Specter, had demanded that the negotiators pare the bill to below $800 billion before they would vote for it.

 

The White House agreed to narrow a tax credit for workers that would now total $400 for individuals and $800 for couples. An earlier version of the bill would have granted $500 and $1,000 respectively.

 

To help states facing growing budget shortfalls, the House had proposed $79 billion while the Senate had agreed to $39 billion. They compromised at $54 billion including some funds that could be used for modernizing schools.

 

Money for building new schools was stripped out and congressional negotiators also scaled back tax incentives aimed at boosting flagging home and automobile sales that were deemed too expensive.

 

Obama indicated on Wednesday that the federal government might also offer more help to struggling U.S. automakers but only if they make progress and present clear proposals next week that show they can be commercially viable.

 

"My goal, consistently has been to offer serious help once a plan is in place that ensures long-term viability and that we're not just kicking the can down the road," he told reporters from 16 regional newspapers. "What the nature of what that help ends up looking like, I think is going to depend on the plan."

 

Date created : 2009-02-12

COMMENT(S)