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It's a deal for record stimulus -- $790 billion Passage Is Expected Promptly Obama hails effect on jobs to get nation 'back on track'

Congressional conferees Wednesday agreed to the largest-ever government boost to the American economy, a $790 billion stimulus package that will inject cash into strapped state and local budgets, cut taxes for most Americans and dramatically increase construction nationwide.

Key senators announced the deal at midafternoon, and House leaders signed on several hours later. Both houses of Congress are expected to pass the bill by the end of the week, and President Obama will sign it shortly thereafter.

"I want to thank the Democrats and Republicans in Congress who came together around a hard-fought compromise that will save or create more than 3.5 million jobs and get our economy back on track," Obama said.

The deal provides slightly more funding for New York State than the Senate version of the bill that was approved Tuesday, but far less than what was in the legislation that the House passed last week.

The compromise preserves the $87 billion set aside to boost the federal share of Medicaid, the health care program for the poor. New York is expected to receive at least $6.8 billion over the next two years because of that change, while Erie and Niagara counties will get $110 million.

Meanwhile, conferees boosted aid to states and school districts from $39 billion in the Senate bill to $44 billion, far short of the $79 billion in the House bill. Nevertheless, New York is expected to receive more than $2 billion aimed at preventing cuts in state aid from wreaking havoc on local school budgets.

The bill also cuts taxes for 95 percent of American taxpayers -- fulfilling Obama's campaign pledge for a middle-class tax cut -- and will put governments to work building $150 billion in new roads and other infrastructure.

"It will be the beginning of the turnaround for the American economy," said Sen. Joseph I. Lieberman, an independent from Connecticut.

House and Senate conferees struck the deal much more quickly than expected, though not without some drama.

When Senate Majority Leader Harry Reid, D-Nev., and other top Democrats joined three Republican senators in announcing the deal in midafternoon, House Speaker Nancy Pelosi, D-Calif., and other House leaders were conspicuously absent.

Though the senators never mentioned it, Pelosi was withholding her support to pressure the conferees to include funding for school construction in the bill. Conferees resisted that demand but agreed to allow school districts to use federal stimulus funds for school renovations.

"We had to make sure the investment in education" was included, Pelosi said.

Most importantly, negotiators managed to maintain the support of three Republican moderates: Sens. Susan Collins and Olympia J. Snowe of Maine and Arlen Specter of Pennsylvania.

Without the backing of at least two GOP senators, the bill could have died at the hands of a conservative Republican filibuster.

The three GOP supporters praised the bill. Collins said she was pleased that conferees were able to trim the cost to $790 billion, from $838 billion in the Senate version and $819 billion in the House legislation.

She also noted that the compromise boosted spending on infrastructure -- highways, bridges, environmental projects, government buildings, broadband Internet service and the like -- to $150 billion.

"That is the most powerful component in this bill to create jobs," Collins said.

But other Republicans lashed out at the substance of the bill and the style in which it was developed.

"I'm very disappointed," House Minority Leader John A. Boehner, R-Ohio, told reporters. "It appears they've made a bad bill worse."

Republicans complained that the negotiators had sharply cut tax breaks for home and car buyers, which the Senate had added to the bill, and noted that they were largely shut out of negotiations that led to the compromise.

Reid, Pelosi and White House chief of staff Rahm Emanuel were the deal's main negotiators, leaving the bipartisan House-Senate conference committee as a virtual sideshow. When that panel convened in the early evening, it was still lacking details of the bill that it was supposed to be considering.

"Because the process was so rushed and so one-sided, we're left flying blind," said Rep. Dave Camp, R-Mich., a member of the conference committee.

Beyond some private grumbling about the lack of school construction funds, Democrats generally praised the compromise stimulus bill.

"This economic-recovery package is very good news," said Sen. Charles E. Schumer, D-N.Y. "It creates jobs, jobs, jobs -- and is one of the first bills where New York gets more back from the federal government than we have put in."

But the dean of the New York congressional delegation, Rep. Charles B. Rangel, D-Manhattan, was more circumspect about the package's likelihood of reviving an economy that has lost 3.6 million jobs in recent months.

"I'm not sure this is going to work," Rangel, chairman of the Ways and Means Committee, said at the conference committee meeting. "But at least we know that as Americans and legislators, we've tried something."

News wire services contributed to this report.

-mail: jzremski@buffnews.com

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