By Alexander Bolton
Posted: 02/12/09 08:08 PM [ET]

Congress is poised to pass a $789 billion stimulus package in time to meet a self-imposed Presidents Day deadline, fulfilling President Obama’s first priority for reviving the national economy.

The House is scheduled to vote on the final version of the package Friday and Senate lawmakers said they expected a final vote in their chamber by Saturday.

Details of the package, which includes more than $500 billion in federal spending and more than $280 billion in tax relief, were still being sorted out late Thursday. Most Republicans in both chambers had yet to receive copies of the conference report as of 5:00 p.m.

So far only three Republicans — all centrist senators — have backed the bill. House GOP leaders were working to limit defections among centrists in the final hours.

Nonetheless, the votes are there for passage and Senate Republicans have indicated they do not plan to use procedural tactics to slow the process down.

“The bill going forward is one we’re all proud of,” Speaker Nancy Pelosi (D-Calif.) said. “It has bipartisan support — at least in the Senate.”

The impending passage had little effect on the Dow Jones Industrial Average, which fell by more than 200 points before rallying late in the day to close down six points.

The centerpiece of the proposal is a middle-income tax adjustment that would save individuals up to $400 and couples up to $800. The plan would also fund $150 billion in infrastructure projects, $54 billion to a state fiscal stabilization fund and nearly $90 billion to pay for state Medicaid shortfalls.

Democrats had said they would unveil the legislation in the morning but kept pushing that goal back throughout the day.

One of the outstanding disagreements was a dispute over the net-operating-loss carryback tax credit, which gives business greater flexibility to write off losses incurred in 2008 and 2009.

Sen. Olympia Snowe (Maine), one of the three Republican centrists who are needed to pass the plan in the Senate, favors the provision, which has little support among House Democrats.

Negotiators gave conflicting reports on Thursday on whether the question had been resolved.

The 65-35 ratio of spending to tax relief is close to the 60-40 split Obama first proposed in January, which several prominent Democrats criticized initially for focusing too much on tax cuts.

Obama advisers hope to highlight expected passage of the package as a major early victory for the new president and have discussed a primetime signing ceremony with television networks.

But Obama fell short of his goal to build bipartisan support for the package. Not a single Republican voted for the House version last month.

That could change. House Minority Leader John Boeher (R-Ohio) is worried about losing two Michigan Republicans — Candice Miller and Fred Upton, according to a source close to the leader.

But House Republican Whip Eric Cantor (Va.) expects possibly greater defections among centrist GOP members.

One Cantor aide took exception with Boehner’s prediction, noting that Cantor is in charge of rounding up votes.

Boehner later conceded he might be wrong. “As you all know, the leader is not involved in the whip count,” he said.

Yet Republicans continued to bash the plan Thursday.

We haven’t seen all the details of the deal between the House and Senate Democrats but some of the early reports suggest this bill has gotten only worse,” said Senate Republican Leader Mitch McConnell (Ky.) on the chamber floor.

“This bill was supposed to be a stimulus that was timely, targeted and temporary,” he added. “Unfortunately it appears to be none of the above.”

McConnell has told colleagues that he will demand adequate time to review the details of the package but has advised colleagues not to raise a series of objections that could stall progress for days.

Several influential GOP allies in the business community have voiced support for the stimulus plan.

“No package of this size can be perfect but we need a bill that will unlock capital markets, free up credit, and create momentum in the economy,” said Bruce Josten, head of government relations at the U.S. Chamber of Commerce.

The National Association of Realtors gave tacit approval of the bill, despite Democratic leaders’ decision to shrink the size of a tax credit for homebuyers from $35 billion to $6.6 billion.

Senate Democrats hope to pass the bill Friday, with Sen. Sherrod Brown (D-Ohio), returning from his home state where he is to attend a memorial service for his mother, said Democratic aides.

Democrats were also uncertain whether Sen. Edward Kennedy (D-Mass.), who is battling brain cancer, would be available.

On the House side of the Capitol, Democrats initially balked at the final agreement and the elimination of $20 billion for school construction to appease Sen. Susan Collins (R-Maine), who feared it would create a precedent of federal funding for what has been traditionally a responsibility of the states.

Members of the House Congressional Black Caucus circulated a letter Wednesday protesting cuts to Head Start, jobs programs and school construction.

But they emerged from a meeting in the office of House Majority Whip James Clyburn (D-S.C.) Thursday afternoon to declare broad support.

“We didn’t get everything we wanted,” said Rep. Maxine Waters (D-Calif.). “Would I have liked to have seen more money? Yes. Does this mean we can stop fighting? No.”

Conference negotiators made several changes to make the plan more attractive to Republicans, such as including a $70 billion one-year freeze of the Alternative Minimum Tax.

The final package is about $50 billion cheaper than the Senate-passed bill and $30 billion than the House version.


Jared Allen, Silla Brush, Molly K. Hooper and Mike Soraghan contributed to this report.

© 2009 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc. To subscribe or visit go to:  http://thehill.com