Channel: Wall Street Journal  Author: GREG HITT and JONATHAN WEISMAN

WASHINGTON—Senate Democratic leaders struck a deal late Friday with three moderate Republicans on a leaner economic-recovery package, clearing a path to Senate passage of one of the most ambitious fiscal stimulus plans in decades.

The deal came after five days of partisan gridlock, and followed news earlier Friday that employers had slashed nearly 600,000 jobs in January. Senators valued the compromise plan at $780 billion—well less than the $930 billion plan the Senate debated most of the day.

No final vote on the package was expected before Monday.

Not counted in that estimate are several popular tax breaks—including measures to encourage auto and home sales—that were approved this week on the Senate floor and are expected to be incorporated into the legislation. Those could push the final cost of the Senate plan closer to $820 billion.

Among the $110 billion in spending cuts: $98 million for school nutrition, $3.5 billion for school construction, and $100 million for the National Oceanic and Atmospheric Administration.

The deal jettisons or pares back a number of items that President Barack Obama had wanted. Funding to computerize health records is all but gone, as is a national study on the comparative effectiveness of health treatments. Mr. Obama’s Make Work Pay payroll-tax holiday was clipped back, and an expansion of the child tax credit for the working poor was also trimmed. At least half the funds to subsidize state education spending were eliminated.

White House aides refused to call those cuts a defeat for the president. Indeed, Sen. Susan Collins (R., Maine) said White House chief of staff Rahm Emanuel helped negotiate the final deal. One White House aide called the compromise “a strategic retreat” to get the bill into House-Senate negotiations and off the Senate floor, where it was being picked apart.

It remained unclear Friday night when the Senate would vote on the compromise.
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