Washington - The US Senate was embroiled Thursday in a last- ditch effort to reach a compromise on an unprecedented stimulus package that President Barack Obama has said is critical to reviving the US economy.
A group of moderate Republican and Democratic senators were involved in negotiations expected to last well into the night. Democratic leaders held out hope that a vote on a compromise could take place early Friday, but the prospects of the bill's passage remained uncertain.
"If necessary we are gonna work through the night," said Senate Majority Leader Harry Reid, the top Democrat in the chamber.
"I can't imagine what would happen to the financial markets tomorrow ... if this bill were to" fail, Reid said.
The Senate's version, as of Thursday night, totalled more than 900 billion dollars over two years - larger than any other stimulus in US history - and any compromise was expected to bring the cost down by as much as 100 billion dollars.
The House of Representatives passed an 819-billion-dollar stimulus last week along party lines. If passed by the Senate, the two chambers would have to reconcile their competing versions in the next week. Democrats have promised to finalize the bill by February 13.
Efforts to get bipartisan support for the stimulus have largely failed as many Republicans and some fiscally conservative Democrats remained unconvinced of its merits.
A total of 60 votes are required to prevent opponents from using procedural measures to block legislation in the Senate. Democrats currently hold a 58-41 majority in the chamber.
More than a dozen moderate Republican and Democratic senators met through Thursday to discuss changes that could bring more lawmakers on board. But Obama's fellow Democrats had resigned themselves to convincing only a small number of opposition Republicans to support the plan.
Democratic Senator Charles Schumer called the president's one-time hopes for 80 votes or more a "distant memory." Congressional offices have been inundated with calls from the general public on both sides of the argument.
The world's largest economy has been in recession since December 2007 and lost 2.6 million jobs over the course of last year. The economy shrank 3.8 per cent in the fourth quarter of 2008 according to initial government estimates.
Obama has said the stimulus bill will save or create at least 3 million jobs over the next two years. The non-partisan Congressional Budget Office in an analysis Wednesday said it would create between 1.3 million to 3.9 million jobs by the end of 2010.
Obama invited a number of centrist Republicans and Democrats for one-on-one meetings at the White House on Wednesday, making what the senators described as a persuasive case that the package needed to be robust enough to have a real impact on the economy.
But Obama has shifted his rhetoric in the past two days from a public push for bipartisanship to chiding Republicans for holding on to failed economic theories that were rejected in November's general election.
"Those ideas have been tested, and they have failed ... and that's precisely what the election we just had was all about," Obama said. "Now is the time to move forward, not back."
The debate has centered largely on government spending programmes, which account for about two-thirds of the package and include investments in renewable energy, transportation, healthcare and education.
About one third of the stimulus is comprised of tax cuts and incentives for car and home buyers in order to revive consumer spending. Republicans have pushed for more business tax cuts and sought to cut back sharply on spending.
The prospect of cutting 100 billion dollars from the Senate bill was not enough for many Republicans, who warned the stimulus would raise the country's budget deficit over
10 per cent and was not targeted enough on investments that would create jobs.
"The stimulus package would be a disaster for our children and our grandchildren," said Arizona Senator John McCain, the 2008 Republican presidential candidate, whose own 420-billion-dollar alternative bill was rejected by the Senate on Thursday. (dpa)
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