Scaled Down Stimulus Bill to Go to President's Desk

The Senate followed the House's lead Friday, passing a scaled down version of an economic stimulus bill pushed by President Bush but stalled for nearly six months.

The 85-9 Senate vote was not as strong as the 417-3 vote in the House Thursday, but signaled overwhelming compromise on the $51 billion package.

Traveling in Florida, President Bush congratulated the Senate on its action.

"I think it's going to be really good for workers whose lives have been affected as a result of 9/11. And it's good for entrepreneurs and business owners because it encourages investment, it encourages employment. And the best stimulus plan is one that focuses on jobs. And I applaud the House that stayed with this, and I'm glad the Senate finally passed it. I look forward to signing it. It is a good piece of news for workers and entrepreneurs alike," he said.

The bill provided $8 billion in jobless benefit extensions and $43 billion for corporate tax cuts. The bill was about half the size pushed by Bush last fall.

"We've finally arrived at the right balance," Rep. Tim Roemer, D-Ind., said after House passage Thursday. 

Senate Majority Leader Tom Daschle, D-S.D., called the GOP effort "long overdue and awfully late" but said he was pleased with the House Republican effort to get the bill passed.

House Speaker Dennis Hastert, R-Ill., bristled at the notion that the House GOP was to blame for the delay, arguing that it passed four economic stimulus packages but the Senate failed to act on any of them for months.

"We would not back down," Hastert told reporters. "We did not raise the white flag."

The Senate vote came one day after Federal Reserve Chairman Alan Greenspan told the Senate Banking Committee that the economy is bouncing back faster than expected and that extending unemployment benefits is a "most reasonable approach."

Friday, the Labor Department reported that jobless numbers dropped for a second straight month to 5.5 percent.

Speaking to an Hispanic business group Wednesday, Bush said the economy is still not where it ought to be and a stimulus bill is necessary.

"I think the economy has still got problems. ... I still think we ought to do more," Bush said.

White House press secretary Ari Fleischer said the president would sign the bill into law.

"The president is concerned that we don't have a jobless recovery," Fleischer said. "It's a compromise. The president is saying today he will support a compromise."

The legislation extends regular 26-week jobless benefits by 13 weeks and allows for additional automatic extensions in states with high unemployment rates. It gives businesses a three-year, 30 percent tax write-off for new investment and a more generous way to deduct losses.

It also creates a "Liberty Zone" in the lower Manhattan section of New York in which $5 billion in various tax breaks would be available to help the city recover from the attacks. In addition, the bill would extend a list of popular tax breaks that have expired or will do so this year.

The bill does not include an acceleration of income tax rate reductions, bigger tax breaks for corporations and a tax credit to help the jobless buy health insurance.

The Associated Press contributed to this report.