Page last updated at 23:41 GMT, Wednesday, 11 February 2009

US lawmakers reach stimulus deal

Senate majority leader Harry Reid
Senate majority leader Harry Reid said there had been give and take

Members of both houses of Congress have reached a deal over US President Barack Obama's economic stimulus plan.

Senate majority leader Harry Reid said the deal "bridged differences" between an $820bn House version of the bill and a $838bn Senate version.

The package, now worth $789bn (549bn), includes tax cuts and spending aimed at rescuing the US economy.

Votes on the final bill - which the president welcomed as a "hard-fought compromise" - could come on Thursday.

The middle ground we have reached creates more jobs than the original Senate bill and costs less than the original House bill
Senate majority leader Harry Reid

Mr Obama is poised to sign the bill into law as soon as Congress passes it.

"I want to thank the Democrats and Republicans in Congress who came together," he said, "with the urgency that this moment demands."

Mr Reid, a Democrat, said the stimulus bill should create 3.5 million jobs.

He added that more than one-third of it would be dedicated to tax cuts and incentives for middle-class Americans.

"The middle ground we have reached creates more jobs than the original Senate bill and costs less than the original House bill," said Mr Reid.

The US stock market ended the day slightly higher following the announcement.

Negotiations needed

The House approved its $825bn version of the package last week without any Republican support.

The Senate voted 61-37 to approve a different $838bn version on Tuesday, with few Republicans opting to back it.

The two versions had to be reconciled in a joint House-Senate committee before facing final votes in the two chambers.

President Obama increased the pressure on Congress this week, saying they should show bold and swift action. The president has said he wants the bill on his desk ready to sign by this weekend.

The bill includes help for victims of the recession in the form of unemployment benefits, food stamps, health coverage and more, as well as billions for states that face the prospect of making deep cuts in their own public spending.

Business closes in Los Angeles
The bill includes help for victims of the recession
The BBC's Richard Lister, in Washington, says it is one of the most expensive pieces of legislation ever to come before the US Congress and it has caused bitter partisan divisions.

Republicans wanted something half the size comprising mostly tax cuts, while many Democrats wanted more money spent on America's infrastructure.

There could still be some tinkering with the plan before it comes to the vote, our correspondent says.

Vice President Joe Biden said the passage of the bill would be an important psychological moment for the country as it grapples with the economic downturn.

"It is the thing that will kick-start the confidence, the psychology that we can climb out of this," he said.

Senator Max Baucus, a Democrat from Montana and one of the negotiators, said earlier that 35% of the total would be in the form of tax cuts.

Print Sponsor

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific