Senate passes Obama's economic recovery plan

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(Agencies)
Updated: 2009-02-11 10:08

WASHINGTON – US President Barack Obama's economic recovery plan has passed the Senate and is on its way to difficult House-Senate negotiations. Just three Republicans helped pass the plan on a 61-37 vote and they're already signaling they'll play hardball to preserve more than $108 billion in spending cuts made last week in Senate dealmaking. Obama wants to restore cuts in funds for school construction jobs and help for cash-starved states.

Senate Minority Leader Mitch McConnell, R-Ky., talks to reporters after the final passage of the stimulus bill, Tuesday, Feb. 10, 2009, at the Capitol in Washington. [Agencies]

Those cuts are among the major differences between the $819 billion House version of Obama's plan and a Senate bill costing $838 billion. Obama has warned of a deepening economic crisis if Congress fails to act. He wants a bill completed by the weekend.

The bill backed by the White House survived a key test vote in the Senate Monday despite strong Republican opposition, and Democratic leaders vowed to deliver legislation for US President Barack Obama's signature within a few days.

Monday's vote was 61-36, one more than the 60 needed to advance the measure toward Senate passage on Tuesday. That in turn, will set the stage for possibly contentious negotiations with the House on a final compromise on legislation the president says is desperately needed to tackle the worst economic crisis in more than a generation.

The Senate vote occurred as the Obama administration moved ahead on another key component of its economic recovery plan. Officials said Treasury Secretary Timothy Geithner would outline rules on Tuesday for $350 billion in bailout funds designed to help the financial industry as well as homeowners facing foreclosure.

Monday's vote was close but scarcely in doubt once the White House and Democratic leaders agreed to trim about $100 billion on Friday.

As a result, Republican Sens. Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania broke ranks to cast their votes to advance the bill.

Sen. Edward M. Kennedy, D-Mass., battling a brain tumor, made his first appearance in the Capitol since suffering a seizure on Inauguration Day, and he joined all other Democrats in support of the measure.

"There is no reason we can't do this by the end of the week," said Majority Leader Harry Reid of Nevada. He said he was prepared to hold the Senate in session into the Presidents Day weekend if necessary, and cautioned Republicans not to try and delay final progress.

He said passage would mark "the first step on the long road to recovery."

Moments before the vote, the Congressional Budget Office issued a new estimate that put the cost at $838 billion, an increase from the $827 billion figure from last week.

"This bill has the votes to pass. We know that," conceded Sen. John Thune, a South Dakota Republican who has spoken daily in the Senate against the legislation.

As if to underscore its prospects for passage, the US Chamber of Commerce, a prominent and powerful business group, issued a statement calling on the Senate to advance the measure.

Even so, in the hours before Monday's vote, Republican opponents attacked it as too costly and unlikely to have the desired effect on the economy. "This is a spending bill, not a stimulus bill," said Sen. Lamar Alexander, R-Tenn.

All 36 votes in opposition were cast by Republicans.

The two remaining versions of the legislation are relatively close in size - $838 billion in the Senate and $819 billion in the House, and are similar in many respects.

Both include Obama's call for a tax cut for lower-income wage earners, as well as billions for unemployment benefits, food stamps, health care and other programs to help victims of the worst recession in decades. In a bow to the administration, they also include billions for development of new information technology for the health industry, and billions more to lay the groundwork for a new environmentally friendly industry that would help reduce the nation's dependence on foreign oil.

At the same time, the differences are considerable.

The measure nearing approval in the Senate calls for more tax cuts and less spending than the House bill, largely because it includes a $70 billion provision to protect middle-class taxpayers from falling victim to the alternative minimum tax, which was intended to make sure the very wealthy don't avoid paying taxes.

Both houses provide for tax breaks for home buyers, but the Senate's provision is far more generous. The Senate bill also gives a tax break to purchasers of new cars.

Both houses provide $87 billion in additional funds for the Medicaid program, which provides health care to the low income. But the House and Senate differ on the formula to be used in distributing the money, a dispute that pits states against one another rather than Republicans against Democrats.

There are dozens of differences on spending.

The Senate proposed $450 million for NASA for exploration, for example, $50 million less than the House. It also eliminated the House's call for money to combat a potential flu pandemic.

On the other hand, the Senate bill calls for several billion more in spending for research at the National Institutes of Health, the result of an amendment backed last week by Specter.