In an uncertain reach across party lines, Senate moderates struggled for a compromise on economic stimulus legislation Thursday as the government spit out grim new jobless figures and President Barack Obama warned of more bad news ahead.
With partisan tensions rising, several Republican attempts to remake the bill — with higher tax cuts, lower spending and fresh relief for homeowners — failed on party-line votes.
"This is the moment for leadership that matches the great test of our time," Obama said Thursday night as the Senate plodded through a fourth day of debate on the legislation at the heart of his economic recovery plan. Earlier, he declared, "The time for talk is over. The time for action is now."
The president added he would "love to see additional improvements" in the bill, a gesture to the moderates from both parties who were at work trying to trim the bill with a newly recalculated, $937 billion price tag.
After fitful, secretive talks lasting well into the evening, the would-be compromisers remained shy of agreement, and Majority Leader Harry Reid, D-Nev., announced they could have another day to work at it.
Sen. Claire McCaskill, D-Mo., said the group was discussing reductions in the bill in the range of $100 billion or more and expressed optimism about the outcome. No details were available. A roster of $88 billion worth of cuts was circulating Thursday, almost half of which would come from education grants to states, with an additional $13 billion in aid the local school districts for special education and the No Child Left Behind law on the chopping block as well.
But the group is also hoping to add perhaps $25 billion in infrastructure projects.
Increasingly, the events that mattered most were not the long roll calls on the Senate floor, but the private conversations in which the White House and Democratic leaders sought — either with the support of a large group of centrist lawmakers or without them — to clear the bill.
Either approach remained a possibility for the Democratic leadership. One path could lead to passage with as few as 60 votes, the minimum needed, while the other presented the opportunity for a larger bipartisan success for the young administration.
"As I have explained to people in that group, they cannot hold the president of the United States hostage," said Reid, D-Nev. "If they think they're going to rewrite this bill and Barack Obama is going to walk away from what he is trying to do for the American people, they've got another thought coming."
Republicans countered that neither the president nor Democratic congressional leaders have been willing to seek common ground on the first major bill of the new administration.
"We're not having meaningful negotiations. ... It's a bad way to start," said Sen. John McCain of Arizona, Obama's opponent in last fall's presidential campaign.
In an Associated Press interview, he said Obama "gave the Democrats the leeway to basically shut out Republicans starting with the House and now here in the Senate, and I don't think that's good."
McCain's penchant for working across party lines has irritated fellow Republicans in the past, but he was not taking part in bipartisan talks on trimming the stimulus bill.
Instead, he advanced an alternative that highlighted the differences between the two political parties.
It carried a price tag of $421 billion, less than half the White House-backed measure. The majority of that was in the form of a one-year cut in the payroll tax, which would help all wage-earners, as well as reductions in the two lowest income tax brackets that would benefit only those who earn enough to pay income taxes.
The proposal also included provisions to help the battered housing industry, including the $15,000 tax credit for home buyers that passed separately on Wednesday.
Another proposal, by Sen. John Ensign, R-Nev., was designed to reduce mortgage rates to as low as 4 percent for millions of homeowners. It was defeated on a vote of 62-35.
Sen. John Thune of South Dakota was the third Republican to try. He proposed a stimulus consisting of tax cuts and unemployment benefits for laid-off workers, at a total cost of $440 billion, but lost, 60-37.
Nearly 20 senators from both parties met twice during the day and reviewed a list of possible cuts totaling 88 billion. They included elimination of at least $40 billion in aid to the states, which have budget crises of their own, as well as $1.4 billion ticketed for the National Science Foundation.
There was no sign the group of self-appointed compromisers had agreed to support the reductions, but even if they had the numbers were far short of what some were looking for.
"The president made a strong case for a proposal that would be in the neighborhood of $800 billion," said Sen. Susan Collins, R-Maine, who met with Obama at the White House on Wednesday.
Yet several hours later, Obama told reporters aboard Air Force One on the way to a Democratic retreat in Williamsburg, Va., that the legislation was already within range of what he wanted.
The legislation is a blend of federal spending and tax cuts that supporters say can create or preserve at least 3 million jobs. They cite the tax cuts for lower-income workers, as well as more money for jobless benefits, worker training, food stamps, health care, education and public works projects such as highways and mass transit.
Critics contend the bill is bloated with spending for items that won't create jobs, such as smoking prevention programs or efforts to combat a future pandemic flu outbreak.
And while polls show Obama is popular and the public supports recovery legislation, Republicans have maneuvered in the past several days to identify and ridicule relatively small items in the bill.
The legislation is a key early test for Obama, who has been in office just two weeks and has made economic recovery his top priority.
His warnings have become increasingly dire, and in remarks to employees at the Energy Department, he said, "Today, we learned that last week the number of new unemployment claims jumped — jumped to 626,000. Tomorrow, we're expecting another dismal jobs report on top of the 2.6 million jobs that we lost last year. We've lost 500,000 jobs each month for the last two months."
The new jobless claims were reported by the Labor Department, and the total was the highest since October 1982, when the economy was in a steep recession.
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