House, Senate reach $789B stimulus deal

Posted Feb. 11, 2009, at 9:30 p.m.

WASHINGTON — House and Senate leaders tentatively agreed Wednesday to a $789 billion economic stimulus bill weighted heavily toward infrastructure and education spending, with significantly less devoted to the tax cuts championed last week by some Senate Republicans.

The pared-down package includes $54 billion for school construction and improvements and more than $150 billion for all infrastructure and transportation spending. The biggest change in the makeup of the stimulus package affected tax cuts, which shrank from 42 percent of the Senate’s bill to roughly 35 percent in the agreement announced Wednesday afternoon.

Under the tentative agreement, many tax breaks, including a credit for homebuyers and aid to those buying cars, were reduced. Sen. Susan Collins, R-Maine, said the White House itself agreed to reduce its signature working tax credit from $1,000 to $800 per person.

“We have now substantially tilted this toward an infrastructure bill,” Collins said. “That is the most powerful component in this bill to create jobs.”

Collins was one of three Republican senators to vote Tuesday for the $838 billion Senate stimulus package, which passed 61-37. The other two were Olympia Snowe of Maine and Arlen Specter of Pennsylvania. The $820 billion House version passed last month with no Republican votes. Maine’s Democratic Reps. Mike Michaud and Chellie Pingree voted with the majority.

Snowe, who spent the day Wednesday in and out of Senate Majority Leader Harry Reid’s office, said between negotiations that she thought the “emphasis on the spending side was appropriate.”

“We wanted to make this a stimulus bill, not an omnibus bill,” Snowe said in an interview before the details of the compromise were announced. “Some spending is essential, but beyond that, we [didn’t] want to be getting ahead of the normal appropriations process.”

The revised spending figures announced Wednesday included $50 billion to help stabilize state governments facing crippling deficits, $11.5 billion to fund special education and $10 billion for Title I programs to help low-income kindergarten through grade 12 students.

“The American people need to know that the process working here in Washington will ultimately reverse the economic slide in this country,” Snowe said.

Maine Gov. John Baldacci praised the bill’s passage in a statement Wednesday, saying Collins and Snowe “demonstrated strong leadership and political courage.”

“They are facing intense criticism from their national party leaders and from some Democrats, who have fallen into the trap of counting on federal assistance before a final bill has passed the Congress,” Baldacci said. “The work they are doing is difficult and too often thankless. I fully support their efforts and will do whatever I can to ensure that they are successful in passing a stimulus plan that puts America back to work.”

The agreement offers roughly $90 billion to help states struggling to pay for their share of Medicaid programs and preserves a higher threshold for the Alternative Minimum Tax, a measure passed more than 30 years ago to tax the income of the wealthy.

The AMT rollback will help families as well as small businesses that pay income taxes, Snowe said.

Collins also met with New York City Mayor Michael Bloomberg Wednesday to discuss education funding in the final stimulus package. At the meeting, American Federation of Teachers Vice President Richard Iannuzzi demanded that the conference committee keep the roughly $19 billion the House had allocated to school construction and repair.

In the end, Collins said she agreed to allow states to spend up to $10 billion on “school repairs and modernization” as part of the broad fund the federal government will provide the states.

“I was very concerned about the precedent of establishing a new federal program for school construction, because historically, that has been the responsibility of state and local governments,” Collins said. “Once established as a separate program, it would be very hard to argue that it’s just temporary relief.”

Wednesday night, Rep. Pingree’s office said she was not prepared to indicate how she would vote on the stimulus package until the language was completed.

Rep. Michaud said he would vote for the final bill even though it did not contain as much infrastructure spending as he would have liked.

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