Conferees Hammer Out $789B Stimulus

WASHINGTON - Senate conferees announced yesterday afternoon that they had reached an agreement on a $789 billion economic stimulus bill, paving the way for House and Senate approval of a final bill that lawmakers hope to send President Obama before next week.

However, while Senate Majority Leader Harry Reid, D-Nev., insisted that there was agreement on the bill, House members were no-shows at a meeting of conferees that had to be postponed and were unavailable for comment at press time. The exact details of the bond and other provisions in the package were not expected to emerge until last night.

The $789 billion price tag of the compromise legislation is lower than the $838 billion Senate version and the $819 billion House measure. It may include more limited bond provisions because Obama administration officials reportedly insisted on increased funding for schools and three key Republican senators fought for the cost of the final bill to come in below $800 billion.

The conferees needed to ensure that the final package would be approved by the three Republican senators that voted for the Senate bill - Sen. Arlen Specter, R-Penn., and Sens. Susan Collins and Olympia Snowe, both of Maine.

The differing bond provisions in the two bills included the proposed taxable bond option program, which would allow issuers of governmental debt in 2009 and 2010 to issue taxable bonds in exchange for a cash subsidy or tax credit. The House bill would have continued the tax credit option permanently while the Senate provision would have expired at the end of 2010.

Conferees also had to determine whether to authorize the Senate-approved $15 billion of recovery zone bonds intended to aid areas struggling with unemployment, or the $25 billion authorized in the House bill. The Senate also had proposed the authorization of $10 billion, compared to the House's $22 billion, of qualified school construction bonds over the next two years.

In addition, the House would have gone further in completely repealing a 2005 law that would require state and local governments, beginning in 2010, to withhold 3% of any payments made for property or services for tax purposes. The Senate bill, in contrast, would only have delayed the implementation of the law by one year.

But the Senate bill contained bond provisions that could have been eliminated to lower costs. One would have allowed small-issue industrial development bonds to be issued over the next two years to finance facilities that create or manufacture intangible facilities or projects, including certain physical components. Another would have expanded what facilities could qualify as high-speed rail facilities for purposes of exempt facility private-activity bond financing.

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