Thursday, February 12, 2009

Congress Strikes $789 Billion Stimulus Deal

The Wall Street Journal - WASHINGTON -- Congress and the White House reached accord on a $789.5 billion economic-recovery package that would shower hundreds of billions of dollars in tax relief on individuals and businesses and spark an infrastructure building boom, from the nation's ports and waterways to its schools and military bases. The deal all but clinches passage of one of the largest economic rescue programs since Franklin Roosevelt launched the New Deal.

President Barack Obama, speaking at a Northern Virginia construction site, hailed an "endeavor of enormous scope and scale." The package dwarfs the military budget and exceeds the cost of the entire Iraq war since the invasion of 2003.

Defying two decades of mostly Republican-led efforts to diminish federal authority and focus on lifting the economy through tax cuts, the legislation would expand unemployment insurance, tilt federal assistance to the poor, launch major efforts to streamline health-care delivery and give Washington a larger hand in local education spending.

The plan may be only a down payment on the Obama administration's effort to turn around an economy that has shed 3.6 million jobs since December 2006. Both Mr. Obama and Democratic leaders lowered their work-creation expectation Wednesday. They had originally said their goal was to create, or save, four million jobs. Last night, they cut that to 3.5 million.

The president has framed the deal as the first leg of an economic program aimed also at unclogging credit markets, lifting the housing market and tightening regulation of the financial and banking sector.

The agreement came late Wednesday after last-minute dickering over education and school-construction funds that dramatized the intensity of negotiations. The House and Senate convened a conference committee to bless the legislation and clear the way for action in the House as early as Thursday. Both chambers are expected to pass the compromise shortly.

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