Successful Senate vote in sight on $827-billion stimulus

The US Senate has agreed on substantially lower government spending and is set to vote on a comprise stimulus package of around $827 billion on Tuesday, against the $937 billion package that President Barack Obama had sought for.

While Democrat senators have agreed to trim the economic stimulus package by hundreds of billions of dollars, many of the measures aimed at protecting US jobs and industry vis-a-vis the world economy are in tact.

With unemployment in the US ruling at a 16-year high and the number of jobs lost rising to 600,000 in January, President Obama has demanded that a bill be passed as early as possible.

He said he expects the bill ready for signing into law by 16 February. Obama had also expected a bipartisan Senate to pass the economy revival plan, but after five days of negotiations, Democrats had to relent on the back of the volley of criticism from Republican Senators that much of the spending would not create any jobs.

While Democrat leaders put the cost of the stimulus at around $780 billion, including tax cuts of up to $1,000 for working couples, Republican supporters of the plan said the price tag could actually be higher, at $827 billion.

While a small group of Republicans agree on the need for a stimulus, most of them said much of the big-ticket spending were was on programmes that would not create jobs.

While the joint group of moderate Senators said the agreement was for $780 billion in spending and tax cuts, others said, including tax incentives, it could total $827 billion.

Differences have now narrowed to $827 billion now being sought and the $819 billion version approved by the Democrat-controlled House of Representatives last week.

Once a final bill is crafted and passed by both chambers, the measure would be sent to Obama to sign into law.

US stocks, meanwhile, rallied for a second day on Friday partly in anticipation of a possible accord on the stimulus.