Recovery Price Tag Nears $850 Billion

By NAFTALI BENDAVID and GREG HITT

WASHINGTON -- The price tag of the economic-recovery plan sought by President-elect Barack Obama has risen to nearly $850 billion, as congressional Democrats nailed down details on a spending-and-tax-cut initiative that could be unveiled as soon as Thursday.

Lawmakers and Obama officials have cobbled together key planks of the plan in a series of closed-door negotiations on Capitol Hill. At a late-afternoon session Wednesday, top Democrats in the House, which is moving ahead of the Senate, made a series of final decisions that will clear the way for formal action to begin in the House next week, individuals familiar with the discussions said. After it is unveiled, the plan is likely to see vigorous debate, and could come under intensified criticism by some Republicans.

The higher price tag is the result of negotiators' decision to put a greater emphasis on investments designed to spur job creation and to soften the impact of the economic downturn on families and local governments, people familiar with negotiations said. Initial estimates put the cost of the package at $775 billion.

Congress is also debating a request by the White House on behalf of Mr. Obama for the release of the second half of the $700 billion financial-industry rescue fund known as the Troubled Asset Relief Program. The Senate could vote on the issue Thursday or Friday, with a "resolution of disapproval" pending there.

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President-elect Barack Obama at a meeting Wednesday at his transition office. His stimulus plan could face complications on Capitol Hill.

Mr. Obama's stimulus plan, which the president-elect hopes will pass by mid-February, could face some complications on Capitol Hill. The emerging House bill is expected to vary somewhat from the Senate package, with differences to be ironed out in additional talks next month, said congressional aides and others familiar with the negotiations.

One center of action will be the tax-writing House Ways and Means Committee, chaired by Rep. Charles Rangel. The New York Democrat is pushing for limits on an Obama-backed proposal to allow businesses to claim new tax refunds by carrying current losses against profits from previous years, said individuals familiar with negotiations.

The spending side of the stimulus package is expected to total more than $500 billion, and Wisconsin Rep. David Obey, chairman of the House Appropriations Committee, is spearheading efforts to finalize details.

Congress is expected to begin formal action on the plan next week. Democratic leaders hope to pass it by mid-February, though Mr. Obey cautioned the deadline could slip.

On Wednesday, Mr. Obey held a 45-minute briefing for committee members to outline the contents of the package. "This is on a real fast track," Rep. Jim Moran (D., Va.) said. "They need to make it available quickly, so we can take our hits from the opposition and make our case."

A spokeswoman for California Rep. Jerry Lewis, the top Republican on the House Appropriations Committee, said Republicans haven't received a draft. "It's almost impossible for us to say if we have serious concerns when we haven't seen anything," said the spokeswoman, Jennifer Hing.

Write to Naftali Bendavid at naftali.bendavid@wsj.com and Greg Hitt at greg.hitt@wsj.com