US politicians reach deal on $US789bn stimulus plan

US Senate Majority Leader Harry Reid said today a deal had been reached on a $US789 billion economic stimulus bill.

Senator Reid said the Senate could vote on as soon as tomorrow.

The deal was announced after a lengthy series of meetings yesterday between House and Senate Democrats and senior White House officials to iron out the differences between the two versions of the economic recovery bill.

The plan is broken down into about 35 per cent in tax credits and 65 per cent in federal Government spending.

"I personally am confident that this bill will put a floor under this economy of ours," said Senator Joseph Lieberman, one of a group of moderate lawmakers involved in negotiating a compromise in the Senate last week. "It will begin the turnaround of the American economy."

Lawmakers will meet shortly to formally present the details of the plan.

Specifics on the components of the plan are still emerging, but the plan will include a significant transfer of funds to the states to help them cope with burgeoning health care and education costs, a large investment in infrastructure, and a series of tax credits aimed at individuals and businesses.

The centrepiece is a tax credit for most working Americans, which was a campaign promise of President Barack Obama. Several congressional sources said the credit had been reduced in size to $US400 from $US500 for individuals and to $US800 from $US1000 for couples.

In his daily media briefing, White House Press Secretary Robert Gibbs says he hadn't seen the deal yet. But asked about the bill scaling back Mr Obama's signature tax cut, he repeated the president's plea to "not make the perfect the enemy of the absolutely necessary".

"The president obviously campaigned on ensuring that we put money back in the pockets of many middle class families," Mr Gibbs said, adding that he has not seen the "final outlines" of the bill.

Also included among the tax components is a roughly $US70 billion annual fix for the alternative minimum tax to ensure that middle class Americans aren't inadvertently caught by it.