Lawmakers, White House Reach $790B Tentative Agreement on Economic Stimulus

Congressional leaders and the White House have crossed a first hurdle, tentatively agreeing to a $790 billion price tag on President Obama's economic stimulus bill.

The new price tag reflects a cut of nearly $50 billion from the Senate version.

Among the considered cuts to the bill, according to numerous Democratic aides involved in the talks, is a trim to Obama's tax credit -- $500 per worker and $1,000 per couple -- with a phase out beginning sooner than originally written: at about $70,000 per individual and $140,000 for couples.

Education construction, which was cut dramatically by the Senate compromise, has received a boost. But according to lead negotiator Sen. Ben Nelson, D-Neb., the money would only go to "modernization, not new construction."

Negotiators are trying to fast-track a compromise over competing versions of the massive economic recovery package. Senate Majority Leader Harry Reid was hosting meetings Wednesday in the run-up to what is known as a conference committee, scheduled for 3 p.m. ET.

Republicans on both sides of Congress, though, are complaining that they've been left out of the talks. House Appropriations Ranking Republican Jerry Lewis claims the stimulus bill was cut in the "dead of night" to "bypass open conference negotiations on the 'stimulus' legislation and jam the massive bill through Congress."

The mix of measures intended to stimulate the economy is different in both pieces of legislation.

The Senate bill is about 42 percent tax cuts, while the House has about one-third tax cuts.

The three Republican senators who helped pull the Senate version over the finish line want their bill to prevail.

But that appears unlikely now with the smaller price tag being attached to bill.

Negotiators, who are hoping to reach an agreement as early as Wednesday, worked until nearly midnight Tuesday to find common ground between the House and Senate versions of the legislation.

Reid and other negotiators have said they want a first-draft compromise on the table for the lead-off meeting Wednesday afternoon. The plan is to wrap up the conference by the end of the day and bring it to the House floor Thursday.

House Majority Leader Steny Hoyer was optimistic.

"I'm hopeful and believe that we'll try to come to agreement on the differences that exist and have a bill by the end of the day that both houses can vote on," he told FOX News Wednesday morning.

But he criticized the Senate for passing a bill that costs about $20 billion more than the House version. The Senate passed an $838 billion spending and tax cut package Wednesday. The House passed an $819 billion version two weeks ago.

"The Senate bill will spend more money than the House bill. In addition to that, the Senate bill has the unfortunate status of creating less jobs than the House bill," he said. "The whole point of this bill is to create jobs, to get our economy moving."

He said there are "significant differences in some ways," but that the bills are still mostly similar.

Democratic officials say that while numerous details remain to be worked out, a major expansion of an existing tax break for homebuyers, approved in the Senate last week, would likely be jettisoned. There was also pressure to scale back a Senate-passed tax break for new car buyers, according to these officials, and to drop a provision limiting compensation for top executives of companies receiving federal bailout assistance.

Obama's negotiating team was insisting on restoring some lost funding for school construction projects as talks began Tuesday in hopes of striking a quick agreement, but by late in the day it appeared resigned to losing up to $40 billion in aid to state governments.

House Democratic leaders, though, promised to fight to restore some of $16 billion for school construction cut by the Senate.

The GOP moderates also want the final bill to retain a $70 billion Senate plan to patch the alternative minimum tax, or AMT, for one year. The provision would make sure 24 million families won't get socked with unexpected tax bills during the 2010 filing season.

The AMT was designed 40 years ago to make sure wealthy people pay at least some tax, but it is updated for inflation each year to avoid tax increases averaging $2,300 a year. Fixing the annual problems now allows lawmakers to avoid difficult battles down the road, but economists say the move won't do much to lift the economy.

House leaders are tempering expectations that they'll restore many of the cuts.

"You cannot allow the perfect to be the enemy of the effective and of the necessary, and we will not," said House Speaker Nancy Pelosi, D-Calif.

Republican continue to oppose the stimulus package, almost unanimously.

Republican Sen. Tom Coburn, Okla., told FOX News that the bloated the measure would pass no matter what.

"I don't think they'll vote against it even if it is significantly changed," he said.