politics

WASHINGTON - Senate Republicans and even some Democrats are pressing for big changes to the $819 billion economic stimulus package the House passed this week, setting the stage for a bruising debate over tax cuts and spending that will test the Obama White House.

The demand for major changes comes amid mounting criticism from some economists that the bill does not focus tightly enough on programs that will quickly create jobs or tax breaks that will spark spending.

Seeking bipartisan support

Not a single Republican voted for the version of the bill that the Democratic-controlled House approved. But with the economy in trouble, some Senate Republicans want to find a way to support the bill, and President Obama wants a strong bipartisan vote to show his ability to build consensus.

Republicans and some Democrats said they would push to add or expand initiatives to prop up the housing market, which was a major cause of the recession. Democratic leaders said they were open to the ideas, including a $15,000 tax credit for homebuyers.

Republicans said they would push for broader and deeper tax cuts and work to cut several provisions that they say smack of special-interest pet projects, including disaster insurance for honey producers.

Democrats and the White House have agreed to allow full debate on the bill in the Senate rather than try to jam the bill through with a small margin of victory. At a minimum, Democrats need at least two Senate Republicans if they are to muster the 60 votes needed to pre-empt any filibuster.

The Senate version is substantially different from the House bill, including a provision to protect millions of middle-class Americans from paying the alternative minimum tax in 2009, which brings the total cost of the bill to nearly $890 billion. Floor debate is expected to last through next week.

It is not clear how much the White House is willing to compromise. Sen. Robert Bennett, R-Utah, said Democrats should break out pieces that both parties agree will work quickly and approve them. "You could take the $30 billion for roads and bridges that is truly shovel-ready and pass that this afternoon," he said. "Let's pick those pieces out, pass them right away and then say, 'OK, this is a down payment on the $800 billion.'"

Obama delays TARP inquiry

Meanwhile, the Obama administration told the Treasury Department to delay an examination of how banks and other corporations are using $350 billion in federal bailout money because of possible conflicts with federal paperwork statutes.

The senior Republican on the Senate Finance Committee, Charles Grassley of Iowa, called it "a terrible signal."

Neil Barofsky, special inspector general for the Troubled Asset Relief Program, was set this week to begin asking every bank that received money for an explanation of what they were doing with the funds. Amid growing criticism of the handling of the bailout, the inquiry amounted to the most expansive effort to determine whether banks were fulfilling the bailout's mission.

The Los Angeles Times contributed to this report.