Thaindian News

Washington, Feb 7 (IANS) Faced with mounting job losses, Democratic and Republican senators have struck a deal to pave the way for the approval of a trimmed down $780 billion dollar economic recovery package to prevent the economic crisis from turning into a catastrophe, as President Barack Obama put it.The deal, announced on the Senate floor Friday night, followed two days of tense negotiations with Obama dispatching his chief of staff to Capitol Hill to reassure senators in his own party and called three key Republicans to applaud them for their patriotism.

Earlier, when it looked as if a vote might take place Friday night, officials said a government plane was dispatched to Florida to bring back Senator Edward Kennedy, who has been absent from the Senate since collapsing on Inauguration Day, to help get the 60 votes needed to move the plan forward.

Democrat Senator Ben Nelson, one of the chief negotiators of the deal, said senators had trimmed the House version of the $819 billion plan to $780 billion in tax cuts and spending on infrastructure, housing and other programmes that would create or save jobs.

Not a single Republican voted in favour when the House last week passed its version of the stimulus plan saying the price on the package was too high.

“We trimmed the fat, fried the bacon and milked the sacred cows,” Nelson said as Senate began debate after the deal.

According to several senators cited by US media, the revised version of the plan axed money for school construction and nearly $90 million for fighting pandemic flu, among other things.

Remaining in the plan are tax incentives for small businesses, a one-year fix of the unpopular alternative minimum tax and tax-relief for low and middle income families, said Senator Susan Collins, who was the most prominent Republican negotiator in the bipartisan talks.

While Democrats appeared to believe they had enough Republican support to push the compromise plan through, most Republican members still were speaking against the plan, saying spending is not the answer to economic woes.

“This is not bipartisan,” said John McCain, who lost the 2008 election to Obama. “If this legislation is passed, it’ll be a very bad day for America.”

Putting more pressure on senators was news Friday that employers slashed another 598,000 jobs off US payrolls in January, taking the unemployment rate up to 7.6 percent.

“This is not some abstract debate. It is an urgent and growing crisis,” Obama said at a White House ceremony unveiling a new economic advisory board. “If we drag our feet and fail to act, this crisis will turn into a catastrophe.”