New Developments III

[Big Magilla]

From Page 6:

D.C. Party Pooper

NEW York's party planners aren't dancing over legislation Sen. John Kerry is trying to push through Congress.

Last week, the Massachusetts lawmaker introduced the TARP Taxpayer Protection & Corporate Responsibility Act, which would prevent all 421 institutions that received federal bailout money from "hosting, sponsoring, or paying for conferences, holiday parties and entertainment events."

Kerry introduced the bill after learning the Northern Trust Corp. of Chicago, a profitable bank that received $1.6 billion in government cash, had sponsored a golf tournament in Los Angeles with special outings for clients featuring performances by Earth, Wind and Fire and Sheryl Crow.

But small business owners who help produce such events say Kerry's rules could have an unintended deadly impact. Noah Tepperberg, owner of Manhattan nightclub Marquee, told Page Six's Neel Shah, "Conferences, holiday parties and entertainment events are often business drivers and can be important factors in helping drive bottom-line profits. I think it's absurd that the government stereotypes all such activities."

Matt Levine, owner of The Eldridge on the Lower East Side, agrees. "Just because John Kerry didn't get into the White House, and probably wouldn't get into The Eldridge either, he should really be focusing on creating more jobs, not taking them away."

"At the end of the day, we are an industry of valets, caterers, florists, groomers and the like," said Shawn Sedlacek, whose VOX Group handled technical and marketing aspects of the Northern Trust event. "For every $100,000 that's spent on an event, $90,000 of that goes to human power. This backlash of 'don't do events' is going to hurt a lot of working-class people."

A rep for the National Business Travel Association said, "In this economy, businesses wouldn't be throwing money around if they didn't expect a return. This bill could really hurt a lot of the people the government is trying to help."

[Greg]

A.F.L.-C.I.O. to Support Nationalizing Banks
By STEVEN GREENHOUSE
Published: March 3, 2009

MIAMI BEACH — The A.F.L.-C.I.O.’s executive council will call on the Obama administration on Wednesday to speed the nationalization of problem banks to stimulate lending and lift the sagging economy.

The labor federation, a lobbying powerhouse that represents 10 million workers, will thus become one of the first groups — and certainly the most powerful — to call for moving more aggressively on nationalization, both to counter Republican and business cries against it and to press the Obama administration not to vacillate over such a move.

A.F.L.-C.I.O. officials asserted that the administration’s practice of giving billions of dollars in dribs and drabs to distressed banks had failed to restore their solvency, leaving them as zombie banks that largely refrain from lending, thereby contributing to the economy’s decline.

The executive council is scheduled to approve a statement that criticizes the Obama administration for indulging shareholders of distressed banks by not nationalizing the banks to speed the cleanup of their balance sheets.

“We believe the debate over nationalization is delaying the inevitable bank restructuring, which is something our economy cannot afford,” a draft of the council’s statement said.

The labor leaders also asserted that the Obama administration, like the Bush administration, had failed to obtain fair value for the tens of billions it had invested in distressed banks.

“By feeding the banks public money in fits and starts, and asking little or nothing in the way of sacrifice, we are going down the path Japan took in the 1990s — a path that leads to ‘zombie banks’ and long-term economic stagnation,” the draft statement said.

The statement makes clear that the group wants to add its political and lobbying muscle to calls by Joseph E. Stiglitz, Nouriel Roubini and other economists in favor of nationalization.

Labor leaders said the administration appeared to be vacillating on nationalization partly out of fear of Republican attacks that it was adopting socialist policies.

Banking executives have spoken out against nationalization, saying it would hurt shareholders and insisting they can nurse their banks back to health.

Some Obama officials voice fears that it will be hard to manage nationalized banks and that nationalization could drive down the shares of other financial institutions by generating fears that additional banks will be taken over.

A.F.L.-C.I.O. leaders said they did not favor long-term nationalization of banks, but rather temporary trusteeships in which the government would take a controlling stake in a bank, clean up its balance sheet, then spin it off.

“The result should be banks that can either be turned over to bondholders in exchange for bondholder concessions or sold back into the public markets,” the executive council’s draft said.

James A. Baker, the Treasury secretary under President Ronald Reagan, wrote in The Financial Times on Tuesday that temporary nationalization might be necessary to inject public funds into problem banks.

“I abhor the idea of government ownership — either partial or full — even if only temporary,” he wrote. “Unfortunately, we may have no choice. But we must be very careful. The government should hold equity no longer than necessary to restructure the banks, resume normal lending and recoup at least a portion of taxpayer investment.”

The labor leaders said that 43 percent of the nation’s bank assets were held by four institutions — Citigroup, Bank of America, Wells Fargo and JPMorgan Chase. One A.F.L.-C.I.O. financial expert said Citigroup and Bank of America were insolvent and candidates for quick nationalization.

“When these institutions are paralyzed, our whole economy suffers,” the labor statement said, adding, “However, government interventions must be structured to protect the public interest, and not merely rescue executives or wealthy investors.”

http://www.nytimes.com/2009/03/04/business/04private.html

[Sonic Youth]

Target is so not going to fold in '09.

They just announced they're opening new stores across the country, so I stand corrected.

[taki15]

George W. Bush Joins Facebook: Day One

George is now friends with Condi Rice, Karl Rove, Sean Hannity, Antonin Scalia and Tom DeLay

George W. Bush is sayin' howdy! My first post---wOOt! What's up?
3:08pm February 23

Scooter Libby at 3:09pm February 23
Why didn't you pardon me, you prick?

Sarah Palin at 3:09pm February 23
Thanks but no thanks. I'd rather pal around with terrorists.

Mitch McConnell at 3:10pm February 23
Now I can say it---you really sucked.

Tom DeLay invited you to join the Bitter Aging Texans Group

George is now friends with Dana Perino, Tony Blair and King Abdullah bin Abdul Aziz Al Saud

Grover Norquist at 3:11pm February 23
I told you to reduce the size of the government so you could drown it in the bathtub. You grew the size of the government, toweled it off, then blew up the bathtub. Your dad's right--you got hit with a special kind of dumbstick.
Scooter Libby, Sarah Palin and Mitch McConnell like this comment

Condi Rice at 3:12pm February 23
Friends 4evuh!!! {{{Mr. President}}}

Dick Cheney at 3:13pm February 23
Why didn’t you pardon Scooter you prick???
Scooter Libby likes this comment

General Colin Powell (Ret.) sent you a bucket of virtual maggots.

Elizabeth Dole at 3:14pm February 23
Here---have a hot cuppa STFU
Bob Dole likes this comment

Michael Steele at 3:15pm February 23
Facebook is the only party in town, baby. Mainly because you KILLED OURS!!!

John McCain wants to send you a virtual can of coal slag and a bag of rusty nails

Norm Coleman just threw a shoe at you.

King Abdullah bin Abdul Aziz Al Saud at 3:35pm February 23
Where is the Scrabble page? I wish to play Scrabble now.
Scooter Libby likes this comment

[OscarGuy]

Boy. I can see this backfiring on the governors...

http://news.yahoo.com/s/bloomberg/20090222/pl_bloomberg/abmo6z0aloxk

[Heksagon]

From The Independent:

***********************

A 'fraud' bigger than Madoff

Senior US soldiers investigated over missing Iraq reconstruction billions

By Patrick Cockburn in Sulaimaniyah, Northern Iraq

Monday, 16 February 2009

In what could turn out to be the greatest fraud in US history, American authorities have started to investigate the alleged role of senior military officers in the misuse of $125bn (£88bn) in a US -directed effort to reconstruct Iraq after the fall of Saddam Hussein. The exact sum missing may never be clear, but a report by the US Special Inspector General for Iraq Reconstruction (SIGIR) suggests it may exceed $50bn, making it an even bigger theft than Bernard Madoff's notorious Ponzi scheme.

"I believe the real looting of Iraq after the invasion was by US officials and contractors, and not by people from the slums of Baghdad," said one US businessman active in Iraq since 2003.

In one case, auditors working for SIGIR discovered that $57.8m was sent in "pallet upon pallet of hundred-dollar bills" to the US comptroller for south-central Iraq, Robert J Stein Jr, who had himself photographed standing with the mound of money. He is among the few US officials who were in Iraq to be convicted of fraud and money-laundering.

Despite the vast sums expended on rebuilding by the US since 2003, there have been no cranes visible on the Baghdad skyline except those at work building a new US embassy and others rusting beside a half-built giant mosque that Saddam was constructing when he was overthrown. One of the few visible signs of government work on Baghdad's infrastructure is a tireless attention to planting palm trees and flowers in the centre strip between main roads. Those are then dug up and replanted a few months later.

Iraqi leaders are convinced that the theft or waste of huge sums of US and Iraqi government money could have happened only if senior US officials were themselves involved in the corruption. In 2004-05, the entire Iraq military procurement budget of $1.3bn was siphoned off from the Iraqi Defence Ministry in return for 28-year-old Soviet helicopters too obsolete to fly and armoured cars easily penetrated by rifle bullets. Iraqi officials were blamed for the theft, but US military officials were largely in control of the Defence Ministry at the time and must have been either highly negligent or participants in the fraud.

American federal investigators are now starting an inquiry into the actions of senior US officers involved in the programme to rebuild Iraq, according to The New York Times, which cites interviews with senior government officials and court documents. Court records reveal that, in January, investigators subpoenaed the bank records of Colonel Anthony B Bell, now retired from the US Army, but who was previously responsible for contracting for the reconstruction effort in 2003 and 2004. Two federal officials are cited by the paper as saying that investigators are also looking at the activities of Lieutenant-Colonel Ronald W Hirtle of the US Air Force, who was senior contracting officer in Baghdad in 2004. It is not clear what specific evidence exists against the two men, who have both said they have nothing to hide.

The end of the Bush administration which launched the war may give fresh impetus to investigations into frauds in which tens of billions of dollars were spent on reconstruction with little being built that could be used. In the early days of the occupation, well-connected Republicans were awarded jobs in Iraq, regardless of experience. A 24-year-old from a Republican family was put in charge of the Baghdad stock exchange which had to close down because he allegedly forgot to renew the lease on its building.

In the expanded inquiry by federal agencies, the evidence of a small-time US businessman called Dale C Stoffel who was murdered after leaving the US base at Taiji north of Baghdad in 2004 is being re-examined. Before he was killed, Mr Stoffel, an arms dealer and contractor, was granted limited immunity from prosecution after he had provided information that a network of bribery – linking companies and US officials awarding contracts – existed within the US-run Green Zone in Baghdad. He said bribes of tens of thousands of dollars were regularly delivered in pizza boxes sent to US contracting officers.

So far, US officers who have been successfully prosecuted or unmasked have mostly been involved in small-scale corruption. Often sums paid out in cash were never recorded. In one case, an American soldier put in charge of reviving Iraqi boxing gambled away all the money but he could not be prosecuted because, although the money was certainly gone, nobody had recorded if it was $20,000 or $60,000.

Iraqi ministers admit the wholesale corruption of their government. Ali Allawi, the former finance minister, said Iraq was "becoming like Nigeria in the past when all the oil revenues were stolen". But there has also been a strong suspicion among senior Iraqis that US officials must have been complicit or using Iraqi appointees as front-men in corrupt deals. Several Iraqi officials given important jobs at the urging of the US administration in Baghdad were inexperienced. For instance, the arms procurement chief at the centre of the Defence Ministry scandal, was a Polish-Iraqi, 27 years out of Iraq, who had run a pizza restaurant on the outskirts of Bonn in the 1990s.

In many cases, contractors never started or finished facilities they were supposedly building. As security deteriorated in Iraq from the summer of 2003 it was difficult to check if a contract had been completed. But the failure to provide electricity, water and sewage disposal during the US occupation was crucial in alienating Iraqis from the post-Saddam regime.

[Heksagon]

Maybe, but it should also be stressed that the main reason why the banks are in such a bad state is because of the U.S. government's hapless economic policy. Everyone except the U.S. Federal Reserve saw that the housing markets were having problems. If you're going to kick out some failed banking execs, you should start with Ben Bernanke.

Read for instance this article, written by Jeffrey Sachs about a year ago. Sachs argues that "[t]o a large extent, the US crisis was actually made by the Fed, helped by the wishful thinking of the Bush administration", and I think that he's correct in saying so.

Amongst other points made by Sachs is this:

At a crucial moment in 2005, while he was a governor but not yet Fed Chairman, Bernanke described the housing boom as reflecting a prudent and well-regulated financial system, not a dangerous bubble. He argued that vast amounts of foreign capital flowed through US banks to the housing sector because international investors appreciated "the depth and sophistication of the country's financial markets (which among other things have allowed households easy access to housing wealth)."



Edited By Heksagon on 1235132707

[Greg]

It looks more and more like the troubled banks will be nationalized, which I think is very good news, as the only alternatives I see are to let them fail, thereby causing a second Great Depression, or to give a blank check to the banks, which would only temporarily postpone the onset of a second Great Depression.



Stress testing "nationalization"
A touchy word has entered the public debate about the future of America’s economy. It’s a word that would shock the nation in normal times, but as even Republicans begin to whisper it, temporary “nationalization” of troubled banks is increasingly seen as our last best hope for fixing our financial system.

Simply put: Nationalizing ailing banks could mean the government would tell some bank execs to take a hike, and then oversee taxpayer dollars as credit courses through the banking sector's veins. When all is well, after quickly re-privatizing the banks by selling assets and operations to new investors, the government then steps back and lets a newly regulated bank sector float on its way.

Arguments for bold government action range from the passionate (Michael Hirsh of Newsweek) to the elegant (Nicholas Kristof of the New York Times). In any case, the number of economists and columnists calling for an aggressive takeover of our "zombie banks" is growing.

This week, respected economists Nouriel Roubini and Matthew Richardson laid it all out in a Washington Post op-ed:


"The U.S. banking system is close to being insolvent, and unless we want to become like Japan in the 1990s -- or the United States in the 1930s -- the only way to save it is to nationalize it….Nationalization is the only option that would permit us to solve the problem of toxic assets in an orderly fashion and finally allow lending to resume. Of course, the economy would still stink, but the death spiral we are in would end."

One could ignore this pessimistic view if Roubini hadn't been consistently correct in his predictions for our worsening economy. Roubini, or "Dr. Doom," as some have called him, is one of the few who saw the housing meltdown coming and who actually voiced his concerns years before it happened.

In a recent interview with Bill Moyers, Simon Johnson, a former chief economist of the International Monetary Fund, argues that many of the executives and members of the banking lobby need to be fired or flushed out, though he stops just short of explicitly calling it nationalization.

Another former IMF economist, however, does not. Ken Rogoff, a Harvard professor who was at the IMF with Treasury Secretary Tim Geithner, thinks government receivership of insolvent banks is becoming our only option. In a roundtable discussion on "PBS NewsHour," Rogoff predicted Geithner and his aides will come to the same conclusion once they "stress test" more Wall Street balance sheets.

Nobel-winning economist and New York Times columnist Paul Krugman was one of the first to note that Geithner’s new financial rescue plan does not rule out nationalization. Krugman points to Geithner’s "stress tests" as a possible first step in the temporary government takeover of crumbling banks:


"Will those public-private partnerships end up being a covert way to bail out bankers at taxpayers’ expense? Or will the required “stress test” act as a back-door route to temporary bank nationalization (the solution favored by a growing number of economists, myself included)? Nobody knows."

Krugman notes in a following column just how quickly the idea of nationalization is picking up steam, even among conservatives:


"There’s hope that the bank rescue will eventually turn into something stronger. It has been interesting to watch the idea of temporary bank nationalization move from the fringe to mainstream acceptance, with even Republicans like Senator Lindsey Graham conceding that it may be necessary."

On "This Week" on ABC, Graham argued for nationalization, while Democratic Sen. Chuck Schumer glowingly endorsed Geithner’s seemingly less-than-aggressive rescue plan.

Meawhile, on NBC’s "Meet the Press," senior White House adviser David Axelrod was asked if nationalization was off the table. Axelrod said it was not, indicating the Obama administration will do whatever it takes to right the nation’s financial ship.

However, President Obama has publicly indicated he is against nationalization, for now. When asked about Sweden and how it temporarily nationalized its banks in the early 1990s, saving its economy from an extended slump, Obama noted that Sweden is a different kettle of fish, a rather smaller and socialist one to be exact.

When ABC’s George Stephanopoulos asked Rep. Maxine Waters (D-Calif.) about nationalization on "This Week," she said she wasn't quite ready to take that route herself. But she also pointed to the national semantics surrounding the question as the first key hurdle to clear:


"Well, George, as you know, the word "nationalization" scares the hell out of people. And so the debate has been opened up now, and that's good. Let's talk about it."

- Thomas Kelley


http://news.yahoo.com/s/ynews/20090218/pl_ynews/ynews_pl246

[Mister Tee]

How about getting rid of the Senate filibuster?

How?

Majority Leader Reid has the power by himself to get rid of what is called the procedural filibuster and force an actual filibuster. That is, now if there is not 60 votes, a bill is either rewritten or dropped. Reid could require that if there is not 60 votes, then the Republicans would have to, say read the phone book, in the Senate chamber for ours on end till their voices give out. If the Senate is open 24/7, it wouldn't take too many days before you ended up with a vote. Plus, the Republicans would have to have their filibuster covered by C-SPAN, end up on YouTube, etc.

Greg, just in case you didn't know: the stimulus vote was not simply a matter of heading off a filibuster. There's a Senate rule requiring 60 votes for any measure advocating deficit spending...so there was no way to simply embarrass GOPers into providing votes. On future issues, yes (like the Employee Free Choice Act), but this one had to be done the way it was.

Rick Hertzberg in The New Yorker had a wonderfully echoing line about the fact that GOP governors, who need the money to stave off financial disaster, are so much more supportive of the stimulus than Republican members of Congress -- "I guess you could say Republican governors are sort of like Republican Congressmen, only they have actual responsibilities".

[Greg]

Alan Greenspan is now on the bandwagon to nationlize the banks.

Greenspan backs bank nationalisation
By Krishna Guha and Edward Luce in Washington

The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times.

In an interview, Mr Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalisation could be the least bad option left for policymakers.

”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a hundred years this is what you do.”

Mr Greenspan’s comments capped a frenetic day in which policymakers across the political spectrum appeared to be moving towards accepting some form of bank nationalisation.

“We should be focusing on what works,” Lindsey Graham, a Republican senator from South Carolina, told the FT. “We cannot keep pouring good money after bad.” He added, “If nationalisation is what works, then we should do it.”

Speaking to the FT ahead of a speech to the Economic Club of New York on Tuesday, Mr Greenspan said that “in some cases, the least bad solution is for the government to take temporary control” of troubled banks either through the Federal Deposit Insurance Corporation or some other mechanism.

The former Fed chairman said temporary government ownership would ”allow the government to transfer toxic assets to a bad bank without the problem of how to price them.”

But he cautioned that holders of senior debt – bonds that would be paid off before other claims – might have to be protected even in the event of nationalisation.

”You would have to be very careful about imposing any loss on senior creditors of any bank taken under government control because it could impact the senior debt of all other banks,” he said. “This is a credit crisis and it is essential to preserve an anchor for the financing of the system. That anchor is the senior debt.”

Mr Greenspan’s comments came as President Barack Obama signed into law the $787bn fiscal stimulus in Denver, Colorado. Mr Obama will announce on Wednesday a $50bn programme for home foreclosure relief in Phoenix, Arizona. Meanwhile, the White House was working last night on the latest phase of the bailout for two of the big three US carmakers.

In his speech after signing the stimulus, which he called the “most sweeping recovery package in our history”, Mr Obama set out a vertiginous timetable of federal decisions in the coming weeks that included fixing the US banking system, submission next week of the 2009 budget and a bipartisan White House meeting to address longer-term fiscal discipline.

“We need to end a culture where we ignore problems until they become full-blown crises,” said Mr Obama. “Today does not mark the end of our economic troubles… but it does mark the beginning of the end.”

http://www.ft.com/cms/s/0/e310cbf6-fd4e-11dd-a103-000077b07658.html

[Greg]

Wow. Just wow. A Republican Senator from South Carolina said the United States should consider nationalizing banks.

http://www.youtube.com/watch?v=YFyEBr7kuLs

[Big Magilla]

How about getting rid of the Senate filibuster?

How?

Majority Leader Reid has the power by himself to get rid of what is called the procedural filibuster and force an actual filibuster. That is, now if there is not 60 votes, a bill is either rewritten or dropped. Reid could require that if there is not 60 votes, then the Republicans would have to, say read the phone book, in the Senate chamber for ours on end till their voices give out. If the Senate is open 24/7, it wouldn't take too many days before you ended up with a vote. Plus, the Republicans would have to have their filibuster covered by C-SPAN, end up on YouTube, etc.

OK, I get it.

[Big Magilla]

Told that no Republican backed the measure, White House press secretary Robert Gibbs reacted by citing another number: "3.5 million jobs that we look forward to saving or creating."

This is a typical Gibbs bullshit response. He doesn't answer questions.

I watched a bit of today's press briefing where he did this over and over. It was painful to watch him squirm when was asked what the White House thought of Obama's saying the CEO of Caterpillar would hire back some of the workers laid off in January if the stimulus bill passed and the CEO telling those in attendance in Peoria after Obama left the building that he would not and issuing a statement this morning saying it would take more than one stimulus package and an improvement in the world-wide economy for him to re-hire workers. When pressed on the issue by different reporters, Gibbs resorted to re-reading the CEO's statement saying it was compatible with the President's remarks ignoring the fact that most people drew from Obama's comments that Caterpillar (and by assumption others) would be re-hiring as soon as the bill passed.

[Greg]

Obama needs to get off this bi-partisan kick he's on. Congressional Republicans are not going to support him no matter how much he placates them.

How about getting rid of the Senate filibuster?

How?

Majority Leader Reid has the power by himself to get rid of what is called the procedural filibuster and force an actual filibuster. That is, now if there is not 60 votes, a bill is either rewritten or dropped. Reid could require that if there is not 60 votes, then the Republicans would have to, say read the phone book, in the Senate chamber for ours on end till their voices give out. If the Senate is open 24/7, it wouldn't take too many days before you ended up with a vote. Plus, the Republicans would have to have their filibuster covered by C-SPAN, end up on YouTube, etc.

[OscarGuy]

One chamber resolved...

If this plan works, Republicans and the 7 Dems will get hit hard for their lack of support. I could foresee the Dems making significant gains in both chambers if this works, but they'll lose several seats if it doesn't.

Though, I find it interesting that the Republicans are bemoaning that this adds to the deficit (something economists seem to agree is what is needed in times of economic crisis), yet they were the ones who squandered the budget surplus Bill Clinton left them in 2000 and built the massive deficit that exists now. So, it's like the pot calling the kettle black. I wish more people would call them out on these statements...


House passes Obama's economic stimulus bill
By ANDREW TAYLOR, Associated Press Writer Andrew Taylor, Associated Press Writer – 29 mins ago

WASHINGTON – Handing the new administration a big win, House Democrats passed President Barack Obama's $787 billion plan to resuscitate the economy on Friday despite a wall of Republican opposition.

The bill was approved 246-183 and sent to the Senate, where a vote was scheduled late Friday afternoon. That vote was to be held open for hours, waiting for Ohio Democrat Sherrod Brown, who was attending a memorial service for his mother and then flying back to cast the deciding vote.

Senate passage would meet a deadline of sending the bill to Obama before a congressional recess begins next week.

The 1,071 page, 8-inch-thick measure combines $281 billion in tax cuts for individuals and businesses with more than a half-trillion dollars in government spending. The money would go for infrastructure, health care and help for cash-starved state governments, among scores of programs. Seniors would get a $250 bonus Social Security check.

Asked for his reaction to House passage of the bill, Obama said "thumbs up" while giving a thumbs-up sign as he left the White House with his family for a long weekend in Chicago.

Told that no Republican backed the measure, White House press secretary Robert Gibbs reacted by citing another number: "3.5 million jobs that we look forward to saving or creating."

Seven Democrats voted against the bill.

Republicans said the package won't work because it has too little in tax cuts and spreads too much money around to everyday projects like computer upgrades for federal agencies.

"This legislation falls woefully short," said House GOP Leader John Boehner of Ohio. "With a price tag of more than $1 trillion when you factor in interest, it costs every family almost $10,000 in added debt. This is an act of generational theft that our children and grandchildren will be paying for far into the future."

The final $787 billion measure has been pared back from versions previously debated in order to attract support from three Senate GOP moderates — Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania. Their help is essential to meeting a 60-vote threshold in the Senate, required to overcome a Republican objection that the bill adds to the deficit.

The bill originally passed the Senate by a 61-37 tally, but Sen. Edward Kennedy, D-Mass., suffering from brain cancer, is not expected to vote this time.

Sen. Judd Gregg, R-N.H., who withdrew his nomination to be Obama's Commerce secretary, said he would vote against the bill.

Democrats lavished praise on the measure, which combines tax cuts for workers and businesses with more than a half-trillion dollars in government spending aimed at boosting economic demand.

"By investing in new jobs, in science and innovation, in energy, in education ... we are investing in the American people, which is the best guarantee of the success of our nation," said House Speaker Nancy Pelosi, D-Calif.

The plan is the signature initiative of the fledgling Obama administration, which is betting that combining tax cuts of $400 a year for individuals and $800 for couples with an infusion of spending for unemployment assistance, $250 payments to people on Social Security, and extra money for states to help with the Medicaid health program for the poor and disabled will arrest the economy's fall.

Local school districts would receive $70 billion in additional funding for K-12 programs and special education and to prevent cutbacks and layoffs and repair crumbling schools. There's about $50 billion for energy programs, much of which goes to efficiency programs and renewable energy.

Some $46 billion would go to transportation projects, not enough to please many lawmakers.

Negotiators insisted on including a $70 billion tax break to make sure middle- to upper-income taxpayers won't get hit by the alternative minimum tax and forced a reduction of Obama's signature tax break for 95 percent of workers.

The AMT was designed 40 years ago to make sure wealthy people pay at least some tax, but 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.

Republicans pointed out a bevy of questionable spending items that made the final cut in House-Senate negotiations, including money to replace computers at federal agencies, inspect canals, and issue coupons for convertor boxes to help people watch TV when the changeover to digital signals occurs this summer.

"This measure is not bipartisan. It contains much that is not stimulative," said Sen. John McCain, R-Ariz., Obama's rival for the White House. "And is nothing short — nothing short — of generational theft" since it burdens future generations with so much debt, he added.