US senators ‘reach stimulus deal’
US senate reaches deal on president’s stimulus plan but must still vote on the bill.
Rahm Emmanuel, Obama’s White House chief of staff, and Harry Reid, the senate majority leader, held talks with senators on Capitol Hill in a bid to attract the support of enough Republicans to give the measure the needed 60-vote majority.
“Our country faces a grave economic crisis, and the American people want us to work together,” Susan Collins, a Republican senator, said on Friday.
“This compromise greatly improves the bill … it will help our economy recover from a dangerous recession.”
There were also reports that Edward Kennedy, senator for the state of Massachusetts, despite being unwell, may be called to come into the senate, as sources say his vote may be needed to push the bill through.
‘Inexusable’ delay
Earlier on Friday Obama condemned Republican opposition for delaying the plan, saying it was “inexcusable and irresponsible” to delay a vote on the bill further.
Our correspondent said Obama’s increased pressure on the Republicans may have prompted some of them to change their minds in favour of voting for the stimulus package.
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Obama also seized on dismal job numbers released on Friday as proof the package should be passed, and any senator would find it hard to vote against the bill – leading to its defeat – then see the economy worsen and have to explain their decision to their constituents, he said.
Republicans – and some moderate Democrats – had complained that the bill is too large, contains insufficient tax cuts and is filled with spending on unnecessary projects.
John Berlau, director of the Centre for Investors and Entreprenuers in washington, told Al Jazeera that he did not think the bill would do the trick.
“Tt might have the side effects of resulting in inflation when they have to print money to pay off this big $800bn,” he said.
The new bill has allocated around 42 per cent of the money to tax cuts and 58 per cent new government spending, whereas before only about one-third of the bill was set aside for tax cuts, sources said.
The US House of Representatives passed its own version of the bill last Wednesday, and Obama has said that he wants to sign the stimulus deal into law by February 16.
Unemployment surge
US government data released on Friday has piled further pressure on politicians to act quickly to fix the country’s faltering economy.
Labour department figures showed on Friday that 598,000 jobs have been lost in January, the largest cut in 34 years.
The unemployment rate also surged to 7.6 per cent.
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The White House said the figures were evidence that the US economy was “contracting greatly”.
“These numbers, and the very real suffering of American workers they represent, reinforce the need for bold fiscal action,” Christina Romer, the chairwoman of Obama’s council of economic advisers, said.
Separately, Obama named on Friday an advisory panel led by Paul Volcker, the former chairman of Federal Reserve, the US central bank, to help his efforts to rescue the economy and rebuild the country’s financial system.
The US economy is in a recession following months of market turmoil sparked by a subprime-mortgage crisis, tight credit conditions and slumping global markets.