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Senate bail-out talks hit impasse Bid to trim Obama's bail-out plan
(about 4 hours later)
US senators have reached deadlock in their attempts to find a compromise over President Barack Obama's $900bn (£616bn) economic stimulus package. US senators are reviewing President Barack Obama's $900bn (£616bn) economic stimulus package in a bid to cut costs.
A group of senators from both parties has forced a line-by-line review of the bill by arguing that it should be trimmed by tens of billions of dollars. Moderate Democrat and Republican senators have argued that the plan should be trimmed by up to $90bn before it is voted through.
The senators will start a fourth day of deliberations later. Mr Obama has warned the economic crisis could become a "catastrophe".
Meanwhile, Mr Obama has again warned that the US economy faces "catastrophe" if exceptional measures are not taken. It comes as watchdog the Congressional Oversight Panel said the government overpaid for distressed financial assets and shares last year.
He said that if Congress failed to pass his package, the resulting recession could destroy another five million American jobs. 'Review'
In a report to be published on Friday, it says the US Treasury paid $78bn more then it should when buying stakes in banks through the $700bn Troubled Assets Relief Program (TARP).
The Treasury had paid $254bn in 2008 in return for stocks and shares in a large number of troubled financial institutions.
The panel was established in October 2008 to "review the current state of financial markets and the regulatory system."
Meanwhile, Mr Obama said that if Congress failed to pass his package, the resulting recession could destroy five million US jobs.
Speaking at a meeting of Democrats from the House of Representatives, Mr Obama said: "They didn't vote for the status quo; they sent us here to bring change. We owe it to them to deliver."Speaking at a meeting of Democrats from the House of Representatives, Mr Obama said: "They didn't vote for the status quo; they sent us here to bring change. We owe it to them to deliver."
His warning comes amid another batch of gloomy economic figures. 'Trim the fat'
SENATE BILL: ACT KEY POINTS Tax cuts for working families: $247bnJob-creating investments in infrastructure and science: $165bnJob-creating investments in health: $153bnJob-creating investments in education and training: $138bnJob-creating investments for an energy independent America: $82bnJob-creating investments tax cuts for small businesses: $21bnHelping Americans hit hard by the economic crisis: $72bn Source: Senate Appropriations Committee The labour department said the number of workers filing new claims for jobless benefits had hit a 26-year high last week. Bipartisan talks are expected to resume Friday morning.
And figures out on Friday are expected to show that more than 500,000 private sector jobs were purged last month alone. The New York Times reported that the cuts included $40bn in aid for states, more than $14bn for various education programmes, $4.1bn to make federal buildings energy efficient and $1.5bn for broadband internet service in rural areas.
After the third day of debating the bail-out bill, Democratic Senate Majority Leader Harry Reid said he was "cautiously optimistic" that the bill would be passed soon. Democratic senator Mary Landrieu, one of those involved, said the group had "trimmed out some of the fat".
"I would hope that we could complete this legislation tomorrow [Friday]," he said. SENATE BILL: ACT KEY POINTS Tax cuts for working families: $247bnJob-creating investments in infrastructure and science: $165bnJob-creating investments in health: $153bnJob-creating investments in education and training: $138bnJob-creating investments for an energy independent America: $82bnJob-creating investments tax cuts for small businesses: $21bnHelping Americans hit hard by the economic crisis: $72bn Source: Senate Appropriations Committee
But he warned that a vote would be scheduled for Sunday if no agreement was reached on Friday. She told the Associated Press news agency that the senators had then added extra infrastructure spending.
On Thursday, Democratic Senate Majority Leader Harry Reid said he was "cautiously optimistic" that the bipartisan group would reach a deal by the end of Friday.
If not, he said he would call for a vote on Sunday, aimed at moving to a final vote.
The House of Representatives approved its version of the package last week, without any Republican support.The House of Representatives approved its version of the package last week, without any Republican support.
The two different versions of the bill will then have to be reconciled in a joint House-Senate committee before facing a final vote.
About one-third of the package being considered is composed of tax relief, with the rest devoted to spending on infrastructure projects.About one-third of the package being considered is composed of tax relief, with the rest devoted to spending on infrastructure projects.
Broadly, Republicans want more tax relief and less spending, and they complain that some projects would do little to stimulate the economy or create jobs.Broadly, Republicans want more tax relief and less spending, and they complain that some projects would do little to stimulate the economy or create jobs.
Democrats say the spending Republicans are calling wasteful amounts to a tiny percentage of the overall package.Democrats say the spending Republicans are calling wasteful amounts to a tiny percentage of the overall package.
It comes amid another batch of gloomy economic figures.
The labour department said the number of workers filing new claims for jobless benefits had hit a 26-year high last week.
And figures due out on Friday are expected to show that more than 500,000 private sector jobs were purged last month.