House-Senate talks shrink stimulus bill; tax breaks may go [View All]

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House-Senate talks shrink stimulus bill; tax breaks may go

By David Lightman | McClatchy Newspapers


WASHINGTON — Lawmakers who are negotiating a final compromise economic-stimulus package tentatively agreed Wednesday on a $789.5 billion price tag and are seriously considering scaling back tax breaks for new car and home buyers while restoring some cuts in state education aid and health care.

The total cost would be well below the measures that the Senate and House of Representatives passed. The negotiators' view is that as long as the cost stays at or below $800 billion, they'd be able to attract some moderate Republican votes — crucial to Senate passage — even as some of the Republicans' favorite tax cuts are trimmed.

The House-Senate negotiators met late Tuesday and planned to resume meeting Wednesday afternoon. White House Chief of Staff Rahm Emanuel and Budget Director Peter Orszag have been involved in the discussions. They and House Democratic leaders have been adamant that school funding cuts be restored.

The House approved a $79 State Fiscal Stabilization Fund on Jan. 28 to help states with education costs, as well as $20 billion for school construction. The Senate cut the fund to $39 billion and provided no money for construction.

Some, but not all, of this money is likely to be restored, according to people close to the negotiations who couldn't be identified because they weren't authorized to speak publicly.

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