Senate passes stimulus as thorny talks with House await

While the bottom lines of the two bills are close, vastly different priorities could color negotiation.

With the help of three Republican moderates, the Senate on Tuesday passed, 61-37, an $838 billion economic stimulus package and named conferees for what is likely to be a touchy negotiation with the House. Conference talks will start Tuesday afternoon, with a goal of getting the final bill to President Obama by the end of the week.

While the bottom lines of the two bills are close -- the House passed an $819 billion package in January -- vastly different priorities could color the talks.

Another complication is that at least two of the three GOP senators who backed the Senate bill will be needed to approve the conference report, so any changes the House insists on will have to be acceptable to them.

"Obviously we are confronted with the reality that we have three people saying, 'If you change anything, we are jumping ship,'" said House Majority Leader Steny Hoyer, D-Md. He hedged his bets on timing, telling reporters he doesn't expect a protracted conference but also saying the process could erase much of next week's scheduled Presidents Day recess by spilling into "Saturday, Sunday, Monday, maybe Wednesday, Thursday of next week."

After passing the bill with help of Republican Sens. Susan Collins and Olympia Snowe, both of Maine, and Arlen Specter of Pennsylvania, Senate Democrats appointed Appropriations Chairman Daniel Inouye, D-Hawaii, Finance Chairman Max Baucus, D-Mont., and Majority Leader Harry Reid, D-Nev., as conferees.

Republicans chose Appropriations ranking member Thad Cochran, R-Miss., and Senate Finance ranking member Charles Grassley, R-Iowa. House conferees are to be named later on Tuesday. The Senate version was a compromise crafted by a team of moderates led by Collins and Sen. Ben Nelson, D-Neb. The compromise cut $83 billion from the spending portion of the stimulus. The largest cut was a $40 billion decrease in a $79 billion state fiscal stabilization fund, much of which would have gone to education. The deal trimmed the tax portion by $25 billion, including a provision to cover half of unemployed workers' COBRA health benefit costs for 12 months instead of 65 percent for nine months, as recommended in the initial Senate bill.

The conference will be an inviting target to lobbyists. Housing advocates are lobbying conferees to add additional funds for communities to buy and rehabilitate foreclosed properties. The House bill contained $4.2 billion for such programs, which builds on a program Congress approved last year to help cities deal with a rising foreclosure rate. The Senate version had allocated $2.25 billion for the effort, but it was removed as part of the Nelson-Collins compromise. House Democrats might also push to restore school construction funding, which was removed from the Senate version. Hoyer did not get specific about House priorities heading into the conference, but he did say he expects a Senate-added alternative minimum tax patch will stay in the final product, even though he opposes it because the cost is not offset.

Dan Friedman and Bill Swindell contributed to this report.