Republicans in the U.S. Senate accepted on Thursday President Barack Obama's offer to search for a compromise on an economic stimulus bill that could end up costing around $900 billion, as long as tax cuts play a large role. The Senate is expected to start considering the massive bill next week, following passage on Wednesday in the House of Representatives of a slightly smaller bill, without the support of a single Republican.
Vice President Joe Biden, in a possible bow to Republicans, said there could be changes in some of the bill's spending and tax provisions once House and Senate negotiators meet to work out a compromise bill next month.
If the U.S. fiscal picture was not bad enough, with budget deficits running rampant, there was yet another dark cloud on the horizon.
Sen. Charles Schumer, a senior member of the Senate Banking Committee, said that if Washington undertakes an effort to buy up bad assets from struggling U.S. banks, it could cost taxpayers up to $4 trillion.
But for now, the economic stimulus was center stage on Capitol Hill. "We look forward to offering amendments to improve this critical legislation," Senate Republican Leader Mitch McConnell said.
For example, Sen. Charles Grassley of Iowa told reporters: "We're going to try to make a case for more investment" while aiming to delete what he and fellow Republicans think would be wasteful spending.
Democratic amendments are expected as well. Senate Banking Committee Chairman Christopher Dodd said he might try to insert a 90-day moratorium on home foreclosures, which have been skyrocketing.
Another senior Democrat, Senate Budget Committee Chairman Kent Conrad, told reporters, "I would have a very hard time voting for this package as it is." Among changes he'd like is a broader tax credit to encourage homebuyers.
Congress is rushing to meet a mid-February deadline set by Obama for enacting the legislation aimed at lifting the economy out of a 13-month-long recession.
Obama said the economic stimulus bill will not be his only salve for the sick economy. He said he will soon move to thaw credit markets and overhaul financial regulations.
Despite talk of the two parties working together, tensions were obvious.
Senate Democratic Leader Harry Reid said he was "confident that we are going to get Republican support on the bill," but added that Republicans could "sit back and nit-pick" the legislation. If there is not a bipartisan vote, "it's not our fault," he said.
One top Senate Republican left the door open to slowing down the bill next week.
"Whatever we can do -- whether that is offer an amendment, whether it's voting against the bill because it could not be amended, whatever parliamentary opportunities are available to us, we will explore," said Senator Jon Kyl of Arizona, the number-two Republican.
The House bill was touted as costing $825 billion, but might be closer to $819 billion when accounting for its future impact on the deficit. The Senate bill, with different tax components, would come close to $900 billion.
Obama says he wants to work with Republicans not only as he promotes the stimulus package but looks ahead to other major initiatives, such as expanding health care, stemming global warming and revamping the Social Security retirement program.
MORE TAX CUTS
McConnell said a main goal for the Senate Republicans will be to increase the amount of tax cuts in the package so they amount to 40 percent of the overall measure, with the rest emergency spending.
The House-passed bill is closer to 33 percent being devoted to tax cuts -- not hugely different from McConnell's goal.
The Senate Republican leader's formula contrasted with what many House Republicans sought: only tax cuts and no new spending at all.
The Senate will begin its debate next week with fresh statistics that likely will underscore the dire shape of the U.S. economy.
On Friday, the government will issue its latest estimate of U.S. gross domestic product. Many economists think it will show that the economy suffered a 5.4 percent contraction last year, which would be the worst performance since 1982.
Data released on Thursday showed the number of U.S. jobless claiming benefits jumped to a record in mid-January, and new orders for durable goods fell for a fifth straight month in December, while sales of newly built single-family homes slumped to their lowest levels since records started in 1963.
U.S. stocks fell on Thursday on the bleak economic news.
http://www.reuters.com
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