The US Senate is working tonight to finalise a huge stimulus package to revive the battered economy, with moderate senators trying to trim the $937 billion (€733 billion) price tag and a new jump in the jobless total boosting pressure for a deal.
Markets rose on hopes of an agreement after Senate Majority leader Harry Reid opened the session saying he believed the chamber would "be able to work something out" on the package sought by President Barack Obama.
"We've made progress since last night...I think we're going to be able to work something out," Mr Reid said as talks resumed on the Democratic-sponsored economic rescue plan, whose value had ratcheted up during days of Senate debate.
House of Representatives speaker Nancy Pelosi said tonight it was her "understanding" that the Senate would "produce a bill today" on economic stimulus.
Mr Pelosi, speaking to reporters, said she spoke with Senate Majority Leader Harry Reid earlier in the day, which led her to believe the Senate would pass the measure promptly.
House majority leader Steny Hoyer said that negotiators from the House and Senate would begin crafting a compromise bill on Monday, with the goal of sending legislation to President Barack Obama by the end of next week.
The Labour Department issued figures showing employers slashing 598,000 jobs in January, the deepest dive in 34 years. The unemployment rate jumped to 7.6 per cent. Both were worse than forecast by Wall Street economists.
Mr Obama, who is facing a critical test less than three weeks into his presidency, said in a statement, "It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work."
The plan being debated on the Senate included at its outset hundreds of billions of dollars of spending on projects ranging from construction and healthcare to grants to states.
The tax component includes a one-year provision to shield middle-class taxpayers from paying a tax originally intended only for the wealthiest taxpayers, and incentives to boost plunging US car sales.
Some senators have said the bill is focused too much on new government spending, prompting a group of moderate Democrats and Republicans to hold a series of meetings to look for cuts to the package.
Many Republicans, who want a greater proportion of tax cuts, criticise provisions they say will boost the role of government in the economy while failing to spur real growth.
The Senate's Republican leader, Mitch McConnell of Kentucky, said Republicans were ready to support a stimulus bill, "but we will not support an aimless spending spree that masquerades as a stimulus."
Mr McConnell said the current measure had become a "Trojan horse" for lawmakers' pet projects.
Moderates have wrestled with numbers, trying to cut the bill to the $800 billion range, which Mr Obama has indicated may be his bottom line.
Mr Obama needs a victory after a difficult first two weeks in office during which he won no Republican support for the plan in the House, and some of his key appointments withdrew after revelations that they had failed to pay some taxes.
He wants the final bill on his desk by February 16th.
Reuters