House, Senate Reach Deal On Puny Stimulus Bill

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Lawmakers finally reach $789 billion stimulus deal after lawmakers slash spending that might have done some good.  Thankfully, however, the “buy a car and flip your house to your brother” tax credits are gone, too.  Mostly.

NYT: Despite intense lobbying by governors around the country, the final deal slashed $35 billion from a proposed state fiscal stabilisation fund, eliminated $16 billion in aid for school construction and sharply curtailed health care subsidies for the unemployed.

In driving down the total cost — from $838 billion for the Senate stimulus bill and $820 billion for the House-passed measures — legislators also sharply reduced proposed tax incentives for buyers of homes and cars that held huge public appeal.

But the final bill retained a $70 billion tax cut that would spare millions of middle-class Americans from paying the alternative minimum tax in 2009, which some Democrats decried as wasting a large chunk of the bill on something that would do little to lift the economy and that Congress would have approved regardless of the recession.

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