Key Stimulus Dispute Settled As Bill Moves In Congress

Congressional leaders are ironing out the final details of the $789 billion economic stimulus legislation at the heart of President Barack Obama's recovery plan, resolving a dispute over school construction as they pushed toward a vote in the House on Friday.

The biggest disagreement, over school modernization funds, pitted House Democrats against Republican Sen. Susan Collins of Maine, a key broker in the deal that allowed the bill to move forward in the Senate.

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A top aide to House Speaker Nancy Pelosi, D-Calif., said Thursday the matter was resolved quickly. A Senate official close to the talks concurred, requiring anonymity to speak frankly about the topic.

Still, the dispute alarmed the White House, which dispatched Obama's budget director, Peter Orszag, to the Capitol to try to solve the problem. Sen. Olympia Snowe, R-Maine, continued to press for tax breaks for money-losing businesses, a spokeswoman said.

Meanwhile, tax credits for high-speed Internet that could have benefited Verizon were cut from a compromise on the bill.

And a generous provision allowing money-losing businesses to get refunds on taxes paid up to five years ago was largely gutted in negotiations, upsetting Republicans.

As two of only three Republicans supporting the bill, the votes of the two Maine senators are crucial to passage of the measure. For Collins, the issue was a formula under which school modernization funds could be allocated and the degree to which governors would control the money.

In talks this week, Collins wanted governors to exert more control, while Democrats wanted to make sure much of the money would be released under formulas that would bypass conservative governors skeptical of the program.

Lawmakers and their aides also were drafting precise language on trade. The House included a Buy America restriction forbidding the use of foreign steel and other products on infrastructure projects funded in the bill.

Negotiators were largely going with a Senate version that is much less restrictive, saying the U.S. would abide by its international trade commitments.

The Senate could vote as early as Friday night, or, more likely, on Saturday. A Democratic senator, Sherrod Brown of Ohio, will be absent Friday to attend his mother's memorial service.

The $789 billion measure—official figures can't be released until the measure is fully sorted out —came together Wednesday after a dizzying final round of bargaining that yielded agreement.

Negotiators dropped a House provision targeting illegal immigrant workers. The House wanted to require anyone getting a contract paid for with stimulus money to use the government's E-Verify program to ensure employees are citizens or immigrants permitted to work.

Many businesses, civil liberties groups and immigration advocates say E-Verify is a flawed program. Others say the tool is needed to control illegal immigration.

Obama, who has campaigned energetically for the legislation, welcomed the agreement, saying it would "save or create more than 3.5 million jobs and get our economy back on track." The $500-per-worker credit for lower- and middle-income taxpayers that Obama outlined during his presidential campaign was scaled back to $400 during bargaining by the Democratic-controlled Congress and White House.

Couples would receive $800 instead of $1,000. Over two years, that move would pump about $25 billion less into the economy than had been previously planned.

Officials estimated it would mean about $13 a week more in people's paychecks this year when withholding tables are adjusted in late spring. Next year, the measure could yield workers about $8 a week. Critics say that's unlikely to do much to boost consumption.

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