US senators 'agree' economy bill

Senators in Washington say they have reached agreement on a huge economic stimulus package designed to revitalise the US economy.

Senior Democrats say they will back a plan worth $780bn (£534bn), instead of the $900bn sought by the president, in order to gain vital Republican support.

President Barack Obama has become angry with delays to the bill, which mixes big spending plans and tax cuts.

Some Democrats are now saying the bill will go to a vote late on Friday.

"We're going to do it, if not tonight, in the next day or so," Senate majority leader Harry Reid said, according to Reuters news agency.

President Obama has spoken of "an urgent and growing crisis".

His comments came as the latest unemployment figures showed that the US had had its single worst month for job losses for 35 years.

Almost 600,000 people lost their jobs in January alone - figures Mr Obama described as devastating.

Rough water

President Obama is desperate to pass the package, the BBC's Adam Brookes in Washington says.

This is the president's first big legislative initiative since he took office, and it has hit some very rough water, our correspondent says.

The new $780bn plan is composed of 42% tax cuts and 58% new government spending, Democratic Senator John Kerry said, according to Reuters news agency.

Other details of the slimmed-down package are sketchy, but one Democrat told Reuters that the homebuyer tax credit and car tax credit were still in the bill.

The Democrats need to persuade two Republicans to vote in favour of the bill for it to gain the necessary 60 Senate votes.

Although Democrats hold a 58-41 majority, 60 votes are required for the measures to pass because the bill would raise the federal deficit.

Senate Finance Committee Chairman Max Baucus said that at least three or four Republicans would vote for the bill.

"The American people want us to work together," said Senator Susan Collins, a Republican who will vote for the bill.

"They don't want to see us dividing along partisan lines on the most serious crisis confronting our country."

'Echo chamber'

Mr Obama described as "devastating" the news that nearly 600,000 Americans lost their jobs in January.

"The situation could not be more serious. These numbers demand action," he said.

Mr Obama's remarks came as he unveiled a new board of economic advisers, chaired by Paul Volcker, former chairman of the Federal Reserve.

"I created this board to enlist voices that come from beyond the echo chamber of Washington DC," said Mr Obama, "and to ensure that no stone is unturned as we work to put people back to work and to get our economy moving."
About one-third of the bill is currently composed of tax relief, with the rest devoted to spending on infrastructure projects, like roads and bridges, new schools and alternative energy programmes.

Republicans and some centrist Democrats are keen to reduce the number of spending commitments in the bill, and without their support the bill may not have enough votes to pass in the Senate.

The House of Representatives approved its version of the package last week, worth $825bn, without any Republican support.

If the Senate gives its approval to the bill, the two different versions will then have to be reconciled in a joint House-Senate committee before facing a final vote.

President Obama has said he wants the passage of the bill to be completed by 16 February.