US

Senate reaches deal on smaller stimulus package

Article published on the 2009-02-07 Latest update 2009-02-07 10:22 TU

US Senate Majority Leader Senator Harry Reid (D-NV) addresses the Senate floor on Capitol Hill in Washington
(Credit: Reuters)

Democrats in the US Senate on Friday presented a slimmer plan to inject at least 780 billion dollars into the US economy, which they say has enough support from rival Republicans to pass next week. This revised plan chops 157 million dollars off the previous plan that Senate Republicans considered bloated. The House had passed the bigger deal last week, but it was stymied in the Senate.

If it is passed in the Senate next week, as is hoped, lawmakers would reconcile the rival bills and then vote on what will probably be a consolidation of the the two.

Democrats were confident that they had enough Republican votes to pass the bill, keeping in line with US President Barack Obama's demand to see a final product on his desk by 16 February.

The new deal came out of closed-door wrangling between the two main parties. Republicans continue to be skeptical of the plan, that they say could go up to 1.2 trillion dollars if the additional 350 billion dollars to tackle debt is added.

"If this legislation is passed, it will be a very bad day for America," said Republican Senator (and former White House contender) John McCain.

The need for the stimulus package is all the greater after the US unemployment rate was released at a whopping 7.6 percent for January 2009, the highest since 1992. That adds up to 600,000 jobs lost, the worst for the US overall since 1974.

"It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work," Obama said. "The situation could not be more serious."

Debate continues on Saturday.