House-Senate negotiators were putting the final touches on a $790 billion economic stimulus package late Wednesday, readying the measure for final passage before the Presidents Day recess as pushed by President Obama.
"I want to thank the Democrats and Republicans in Congress who came together around a hard-fought compromise that will save or create more than 3.5 million jobs and get our economy back on track," Obama said in a statement.
Many priorities for both sides were jettisoned in the final deliberations, ranging from tax cuts for big corporations to veterans' funding. "It appears that congressional Democrats have made a bad bill worse by reducing tax relief for working families to pay for more wasteful government spending," House Minority Leader Boehner said.
Some House Democrats appeared just as perturbed as their GOP colleagues, who have continually complained about being shut out of the discussions. "On almost every issue, we took a `haircut' the Senate gave us," said Rep. James Moran, D-Va., although he was quick to note that "I'm not upset at the leadership; I'm just upset at the process."
But the bill is likely headed to Obama's desk despite the grumbling, lawmakers said. "Half a loaf is better than no loaf at all," said Rep. Shelley Berkley, D-Nev., who complained about school construction and her state's Medicaid allotment being curtailed.
Initially, only recipients of Troubled Asset Relief Program funding were to be excluded from the bill's signature business tax break, an extended five-year carry-back of net operating losses. But to make the cost fit within the reduced budget target, Democratic leaders agreed to cut the provision to about $2 billion, limited only to small businesses. House Ways and Means Select Revenue Measures Subcommittee Chairman Richard Neal, D-Mass., was not happy about that change.
"They're keeping a very tiny part of it, and I thought the NOL provision would have helped us sell this across the country," Neal said. "My argument here is you could defend every provision that came out of the House in the tax title. It was equitable; it was fair, and it was evenly distributed. And it was for the purpose of saying we would provide relief across the board."
Even with the hold-harmless treatment for smaller firms, overall small-business tax cuts amount to less than 1 percent of the final bill. "More can be done, when you compare it to TARP money that went to the largest banks in America," said House Small Business Chairwoman Nydia Velazquez.
Concerns raised by the Congressional Black Caucus were addressed after they sent a letter to House Speaker Pelosi earlier Wednesday. The compromise is expected to include $2 billion in additional money for rural broadband development over the Senate's bill and $10 billion in additional state stabilization funding directed toward school repairs. But members of the group continued to push for an additional $4.2 billion in funding for neighborhood stabilization programs to help stem the impact of the mortgage crisis and cut from the House bill.
"None of us will be completely happy, but it sounds like something we'll have to live with," said Rep. Elijah Cummings, D-Md., a member of the CBC, said about the bill.
CBC members are not the only ones angry about the neighborhood funding not being reinstated, particularly in light of the Obama administration's plans announced Tuesday to deal with the problems in the mortgage industry. "They've [the Obama White House] got a deaf ear on the thing that caused the problem," said one Democratic lawmaker.
Pelosi and Majority Leader Hoyer made the case for the compromise bill to a closed-door meeting of House Democratic lawmakers Wednesday evening. Hoyer noted the need for compromise but argued that House Democrats still got a great deal. "Approximately seven-eighths of the bill is what we had [in the House version]," Hoyer said he told lawmakers.
Hoyer confirmed that a version of "Buy American" restrictions on infrastructure spending akin to what the Senate approved remains. That language clarified that the provision would be applied in a fashion consistent with worldwide trade rules, but European Union ambassador John Bruton earlier in the day sent letters to conferees urging they tighten it further.
As drafted, the language "still risks creating a protectionist effect" by shutting out foreign bidders, Bruton wrote. He said that, at a minimum, a reciprocity provision should be added so foreign firms whose home countries provide open access to U.S. bidders would not be penalized.
With the White House pushing for the inclusion of language allowing the administration flexibility in parceling out infrastructure funding, Pelosi said the provision would not be in the bill. Democrats railed against the inclusion of similar measures in Iraq war funding legislation during the Bush administration. "It wasn't in the House and it wasn't in the Senate," said Pelosi. "I don't know how that could be in there. All I am saying is that it is something I couldn't support."
Including school-repair funding, total state fiscal relief totals about $54 billion, about two-thirds of the initial House version. There was some concern expressed among House Democrats about giving a blank check to states -- particularly to those with GOP governors who have been critical about the stimulus. Exactly what strings to attach to the state funding was still being discussed, lawmakers said.
On taxes, other "haircuts" were administered. Obama's "Making Work Pay" credit was shaved by about $30 billion, but workers will still get $400-$800. Eligibility for refundable child tax credits was lowered to $3,000 in wages, more than zero in the House bill but less than the $8,100 proposed by the Senate. A deduction for auto purchases was cut from $11.5 billion to $2 billion, while a $15,000 homebuyers' credit was cut in half -- and limited to first-time buyers.
The measure would provide about $60 billion in unemployment and health benefits for laid-off workers, including $15 billion in the form of one-time, $250 checks to retirees, disabled veterans and low-income individuals. Neal said the structure of that program was a problem for government employees in Massachusetts and eight other states, however, who do not contribute to Social Security. The effect of that would be a wealthy retiree could get a check, but a lower-income government worker would not, Neal said, adding that negotiators were working to resolve the matter.
In a win for the financial-services sector, conferees largely eliminated several Senate amendments that limited pay packages at financial institutions receiving Troubled Asset Relief Program funds, senators said. According to Senate Finance Chairman Max Baucus, the main remaining provision is a scaled-down version of an amendment by Senate Banking Chairman Christopher Dodd. "The executive compensation provisions [in the bill] is basically the Dodd amendment," Baucus said. The amendment, which previously banned TARP firms from paying a bonus, or other compensation to its 25 highest-paid employees, resembles restrictions on executive compensation set separately by Obama, Baucus said.
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