Amid bipartisan disappointment, House and Senate lawmakers reach a deal on a $789.5 billion package to jump-start the economy.
Negotiators on Wednesday announced a deal on a slimmed-down $789.5 billion economic stimulus bill amid bipartisan disappointment.
Democrats will not get all they want, but Republicans, other than three Senate GOP moderates who helped shape the outcome, said they were excluded from the process.
"It seems as though [senators] are 100 percent held hostage ... by the whim of these three members," said House Ways and Means Chairman Charles Rangel, D-N.Y., resigned to reductions in President Obama's signature "Making Work Pay" tax credit.
"Hardly anybody's happy with having to go backward," he added. "So I guess the president is in a no-win position in terms of having to bend and amend ... based on their demands."
Negotiators shaved the price tag by $30 billion in cutting the workers' credit to $400 for individuals and $800 for families, down from $500 and $1,000, to fit within Obama's goal of providing the credit to 95 percent of tax filers. "We will do what we have to do in order to give the president something even though it may not be exactly what he's been promising," Rangel said.
But other priorities will be replenished. The bill will include a more generous child tax credit than the Senate version while boosting funds for school construction, neighborhood revitalization, energy-efficient buildings, and health insurance for the unemployed. School modernization, eliminated in the Senate bill, would get $6 billion, said Sen. Tom Harkin, D-Iowa, and states will see their education allotment increased to $44 billion, though that is still $35 billion shy of the House version. Rangel said the final conference deal will include much of what House Democrats want, but not all. Senate Finance Committee Chairman Max Baucus, D-Mont., said the tax portion of the bill would be about 35 percent of the total, or roughly $276 billion. That means some Senate tax provisions are likely to be scaled back, including a potential "haircut" to a provision extending the net operating loss carry-back period for money-losing companies. Consumer tax incentives for home and car purchases added by the Senate will also be cut back. The bill will preserve a one-year $70 billion fix for the alternative minimum tax, which Republicans insisted on.
Republicans kept up their protests on Wednesday. "The bill continues to be managed in a pretty heavy, partisan way by congressional leaders," said Senate Finance Committee ranking member Charles Grassley, R-Iowa. House Minority Leader John Boehner, R-Ohio, said Republicans have "ideas and represent about 40 percent of the American people." But Democrats said Republicans would remain opposed to the measure regardless. "Why would we have them in the room when they have no intention to back the bill?" said one senior Democratic aide.
But one hint of bipartisanship could be preserved. Conferees appear likely to adopt an agreement on Trade Adjustment Assistance legislation negotiated by the tax writing panels. More than 50 multinational firms and business associations wrote to conferees on Wednesday urging them to include the agreement, which was blocked by Senate Minority Whip Jon Kyl, R-Ariz.
Dan Friedman and Humberto Sanchez contributed to this report.