No Senate Agreement Yet On Stimulus Plan

Senate Majority Leader Harry Reid of Nev., center, flanked by Sen. Charles Schumer, D-N.Y., left, and Sen. Richard Durbin, D-Ill., gestures while speaking to reporters on Capitol Hill in Washington, Feb. 5, 2009.
AP Photo/Susan Walsh
Senate moderates worked to cut tens of billions of dollars from economic stimulus legislation Thursday in hopes of clearing the way for passage as the government spit out grim new jobless figures and President Barack Obama warned of more bad news ahead.

With partisan tensions rising, a Republican alternative with higher tax cuts and far less spending than the administration favors was defeated on a pure party-line vote, 57-40. Other GOP attempts to make significant changes in the bill appeared doomed, as well.

After fitful, secretive talks lasting well into the evening, the would-be compromisers remained shy of agreement, and Majority Leader Harry Reid announced they could have another day to work at it.

A new CBS News poll shows 81 percent of Americans believe Mr. Obama is trying for bipartisanship, reports CBS News correspondent Chip Reid.

"The time for talk is over. The time for action is now," declared Mr. Obama as the Senate plodded through a fourth day of debate on the legislation. He implored lawmakers in both parties to "rise to this moment."

Mr. Obama added he would "love to see additional improvements" in the bill, a gesture to the moderates from both parties who were at work trying to trim the bill with a newly recalculated, $937 billion price tag.

Sen. Claire McCaskill, D-Mo., said the group was discussing reductions in the bill in the range of $100 billion or more and expressed optimism about the outcome. No details were available.

Increasingly, the events that mattered most were not the long roll calls on the Senate floor, but the private conversations in which the White House and Democratic leaders sought - either with the support of a large group of centrist lawmakers or without them - to clear the bill at the heart of the president's recovery program.

"As I have explained to people in that group, they cannot hold the president of the United States hostage," said Majority Leader Harry Reid, D-Nev. "If they think they're going to rewrite this bill and Barack Obama is going to walk away from what he is trying to do for the American people, they've got another thought coming."

Republicans countered that neither the president nor Democratic congressional leaders have been willing to seek common ground on the first major bill of the new administration.

"We're not having meaningful negotiations. ... It's a bad way to start," said Sen. John McCain of Arizona, who was Mr. Obama's opponent in last fall's presidential campaign.

In an Associated Press interview, he said Mr. Obama "gave the Democrats the leeway to basically shut out Republicans starting with the House and now here in the Senate, and I don't think that's good."

McCain's penchant for working across party lines has irritated fellow Republicans in the past, but he was not taking part in bipartisan talks on trimming the stimulus bill.

Instead, he advanced an alternative that highlighted the differences between the two political parties.

It carried a price tag of $421 billion, less than half the White House-backed measure. The majority of that was in the form of a one-year cut in the payroll tax and reductions in the two lowest income tax brackets.

Nearly 20 senators from both parties met twice during the day and reviewed a list of possible cuts totaling nearly $80 billion. They included elimination of at least $40 billion in aid to the states, which have budget crises of their own, as well as $1.4 billion ticketed for the National Science Foundation.

There was no sign the group of self-appointed compromisers had agreed to support the reductions, but even if they had the numbers were far short of what some were looking for.

"The president made a strong case for a proposal that would be in the neighborhood of $800 billion," said Sen. Susan Collins, R-Maine, who met with Mr. Obama at the White House on Wednesday.

The legislation is a blend of federal spending and tax cuts that supporters say can create or preserve at least 3 million jobs. They cite the tax cuts for lower-income workers, as well as more money for jobless benefits, worker training, food stamps, health care, education and public works projects such as highways and mass transit.

Critics contend the bill is bloated with spending for items that won't create jobs, such as smoking prevention programs or efforts to combat a future pandemic flu outbreak.

And while polls show Mr. Obama is popular and the public supports recovery legislation, Republicans have maneuvered in the past several days to identify and ridicule relatively small items in the bill.

Whatever the public relations battle, Republicans have tried without success so far to reduce spending in the measure and were ready with additional attempts during the day.

The legislation is a key early test for Mr. Obama, who has been in office just two weeks and has made economic recovery his top priority.

One minor victory for Mr. Obama came Wednesday night when the Senate softened - but would not remove - a "Buy American" protectionist measure that drew strong criticism from major U.S. trading partners including Japan, Australia and Canada.

The bill sent to the Senate by the House of Representatives demanded that only U.S.-made iron and steel be used in infrastructure projects finance by the stimulus bill. The Senate added to the edict all manufactured products used in such projects.

In the face of warnings by Mr. Obama that such rules could cause trade wars, the Senate agreed Wednesday night to specify in the bill that U.S. international trade agreements should not be violated. It rejected, however, an effort by Republican Sen. John McCain, Mr. Obama's opponent in last year's presidential campaign, to remove the stipulations altogether.

Canada's trade minister, Stockwell Day, praised the Senate action and expressed optimism Thursday that U.S. and Canadian officials could come up with "what we hope will be a successful conclusion" to ward off trade retaliation.