Deal reached on $789 billion stimulus

House and Senate negotiators announced this afternoon that they had reached agreement on a $789 billion economic stimulus bill, clearing the way for final Congressional action and President Obama’s signature.

“The differences between the House and Senate versions, we’ve resolved,” Senator Harry Reid of Nevada, the Democratic majority leader, said in a Capitol news conference. The differences were resolved by a lot of intense “give and take,” Mr. Reid said, “and if you don’t mind my saying so, that’s an understatement.”

Senator Susan Collins of Maine, a centrist Republican whose support was crucial to the outcome, said the final package includes $150 billion in spending on infrastructure, including transportation facilities, and considerable tax relief. Moreover, she said, it includes significant money to aid state governments.

Despite intense lobbying by governors, the final deal slashed $35 billion from a proposed state fiscal stabilization fund, eliminated $16 billion in aid for school construction and sharply curtailed health care subsidies for the unemployed.

In driving down the total cost of the stimulus bill — from $838 billion approved by the Senate and $820 by the House — legislators also sharply reduced proposed tax incentives for buyers of homes and cars that held huge public appeal. Senator Collins said getting the final number to under $800 billion was more than symbolic; it meant “a fiscally responsible number,” she said.

But the final bill retained a $70 billion tax cut that would spare millions of middle-class Americans from paying the alternative minimum tax in 2009, which some Democrats decried as wasting a large chunk of the bill on something that would do little to lift the economy and that Congress would have approved regardless of the recession.

(Via NYT)