$838 Billion Stimulus Plan Clears Senate Procedural Hurdle

BY Admin  February 9, 2009 at 6:00 PM EST

U.S. Capitol

The bill advanced as President Obama prepared to deliver a primetime address to the nation about his economic recovery plan. Earlier in the day, he hosted a town hall meeting in Elkhart, Ind., where the unemployment rate has reached 15.3 percent — one of the highest in the nation, the Associated Press reported.

Senators met over the weekend for a rare debate session and agreed to cut about $100 billion from their package of spending and tax cuts. The Senate measure must still be reconciled with the House’s $820 billion version, which passed with no Republican support.

Moments before the vote, the Congressional Budget Office issued a new estimate that put the cost at $838 billion, an increase from the $827 billion figure from last week, according to the AP.

The two bills are similar in many ways, but there are some major differences including $40 billion in aid to state governments for education and other programs included in the House version, but not the Senate’s. The House bill also contains $2.6 billion for a first-time homebuyer tax credit, but there is an income cap. The Senate’s measure has $18.5 billion for a credit to any homebuyer, with no income cap.

Two key players in crafting the Senate version, Sens. Susan Collins, R-Maine, and Ben Nelson, D-Neb., said Monday that this is the best that can be achieved in the current circumstances.

“This bill is not perfect. We’re not claiming that. But in fact I think this bill will help to create 3.5 million jobs. … We’re facing a crisis and it makes no sense to have a partisan divide,” Collins said, according to the AP.

The Senate bill retained the core of Mr. Obama’s plan to combine hundreds of billions of dollars in spending to boost consumption by the public sector with tax cuts designed to increase consumer spending.

Much of the new spending would be for victims of the recession in the form of extending unemployment insurance through the end of the year and increasing benefits by $25 a week, free or subsidized health care and increased food stamp payments, the AP reported.

Mr. Obama and Democratic Party leaders are hoping to get a bill signed by Feb. 16.