US senators 'agree' economy bill

[frigidmagi]

BBC

Senators in Washington say they have reached agreement on a huge economic stimulus package designed to revitalise the US economy.

Senior Democrats say they will back a plan worth $780bn (£534bn), instead of the $900bn sought by the president, in order to gain vital Republican support.

President Barack Obama has become angry with delays to the bill, which mixes big spending plans and tax cuts.

Some Democrats are now saying the bill will go to a vote late on Friday.

"We're going to do it, if not tonight, in the next day or so," Senate majority leader Harry Reid said, according to Reuters news agency.

President Obama has spoken of "an urgent and growing crisis".

His comments came as the latest unemployment figures showed that the US had had its single worst month for job losses for 35 years.

Almost 600,000 people lost their jobs in January alone - figures Mr Obama described as devastating.

Rough water

President Obama is desperate to pass the package, the BBC's Adam Brookes in Washington says.


This is the president's first big legislative initiative since he took office, and it has hit some very rough water, our correspondent says.

The new $780bn plan is composed of 42% tax cuts and 58% new government spending, Democratic Senator John Kerry said, according to Reuters news agency.

Other details of the slimmed-down package are sketchy, but one Democrat told Reuters that the homebuyer tax credit and car tax credit were still in the bill.

The Democrats need to persuade two Republicans to vote in favour of the bill for it to gain the necessary 60 Senate votes.

Although Democrats hold a 58-41 majority, 60 votes are required for the measures to pass because the bill would raise the federal deficit.

Senate Finance Committee Chairman Max Baucus said that at least three or four Republicans would vote for the bill.

"The American people want us to work together," said Senator Susan Collins, a Republican who will vote for the bill.

"They don't want to see us dividing along partisan lines on the most serious crisis confronting our country."

'Echo chamber'

Mr Obama described as "devastating" the news that nearly 600,000 Americans lost their jobs in January.

"The situation could not be more serious. These numbers demand action," he said.

Mr Obama's remarks came as he unveiled a new board of economic advisers, chaired by Paul Volcker, former chairman of the Federal Reserve.

"I created this board to enlist voices that come from beyond the echo chamber of Washington DC," said Mr Obama, "and to ensure that no stone is unturned as we work to put people back to work and to get our economy moving."


SENATE BILL: KEY POINTS
Tax cuts for working families: $247bn
Job-creating investments in infrastructure and science: $165bn
Job-creating investments in health: $153bn
Job-creating investments in education and training: $138bn
Job-creating investments for an energy independent America: $82bn
Job-creating investments tax cuts for small businesses: $21bn
Helping Americans hit hard by the economic crisis: $72bn
Source: Senate Appropriations Committee

Q&A: Stimulus plan

About one-third of the bill is currently composed of tax relief, with the rest devoted to spending on infrastructure projects, like roads and bridges, new schools and alternative energy programmes.

Republicans and some centrist Democrats are keen to reduce the number of spending commitments in the bill, and without their support the bill may not have enough votes to pass in the Senate.

The House of Representatives approved its version of the package last week, worth $825bn, without any Republican support.

If the Senate gives its approval to the bill, the two different versions will then have to be reconciled in a joint House-Senate committee before facing a final vote.

President Obama has said he wants the passage of the bill to be completed by 16 February

[SirNitram]

Math time.

Tax cuts for working families: $247bn

Payroll Tax Holiday. 1.29
318B

Job-creating investments in infrastructure and science: $165bn

Lacking numbers on Science investments, but assuming rough parity with Infrastructure from previous investigation into job creation: 1.59
262B

Job-creating investments in health: $153bn

PROBABLY Medicaid aid to states. 1.39
212B

Job-creating investments in education and training: $138bn

Long term; unknown effect on stimulus.

Job-creating investments for an energy independent America: $82bn

Energy is largely infrastructure, so for want of better measures, we use that. 1.59
130B

Job-creating investments tax cuts for small businesses: $21bn

Wish I knew the technicals here. It could be as sucky as a cut in the corporate rate(.30) to as decent as Refundable Lump Rebate(1.26).
6.3B to 26B

Helping Americans hit hard by the economic crisis: $72bn
Unemployment and Food Stamps. Assume half-half breakdown. 36B 1.73, 36B 1.63
62B + 58B = 120B.

1.042T.. Job Creating Tax Cuts push to either 1.048T or 1.068T Stimulative effect. Note: This is an estimate on guesses. It does not include the education/training section for want of data. But if we view this as the best-case, it could still be good.

[General Havoc]

Nitram, two questions:

1: Where are you getting the coefficients here? I don't have specific objections to any of them, but I'd like to know the source.

2: How much additional non-stimulus spending got through? I have extremely spotty internet access, and cannot search for it at present.

[SirNitram]

Nitram, two questions:

1: Where are you getting the coefficients here? I don't have specific objections to any of them, but I'd like to know the source.

Moody's Investment Service, pretty much the Last Honest Man in credit ratings and economic research, produced a simple study showing the stimulative effect of given expenditures. Their website, Economy.com, has the numbers up.

2: How much additional non-stimulus spending got through? I have extremely spotty internet access, and cannot search for it at present.

That appears to be the whole thing, though I will be assessing the full bill once it's signed by the President. I'll also try to get numbers run for the Conference Markup version.