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US Senate stays up late debating bailout -

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Reporter: Kim Landers

BRENDAN TREMBATH: The United States Senate is staying up late in a frantic bid to pass a massive
economic stimulus package.

The President Barack Obama says the extra spending is urgently needed to kick-start an American
economy which has been in recession for more than a year.

But Republicans are digging in their heels, refusing to back a package which has now ballooned to
more than $US900-billion. That is about $AU1.3-trillion.

Washington correspondent Kim Landers joins us now.

Kim, the US Senate is now in its fourth day of debate about this economic stimulus package. Why
isn't it getting passed?

KIM LANDERS: Well Brendan, this is a key early test for Barack Obama who has been president for
just over two weeks and has made economic recovery his top priority but when this package was
passed by the House of Representatives last week, it didn't get a single Republican vote.

In the Senate the numbers are tighter and the Democrats need at least two Republicans to get behind
the plan to reach the 60 votes needed to thwart any delaying tactics but as the haggling goes on,
this economic stimulus plan has now ballooned to more than $US900-billion - mostly infrastructure
spending but a big dose of tax cuts too.

The Democratic leader in the Senate Harry Reid says the Senate will pull an all nighter if needed
to try to get this plan passed.

Here is a little of Harry Reid.

HARRY REID: Imagine what would happen to the financial markets tomorrow if it was reported that
this Bill could do down. This Bill is not only important to our great country, it is important to
the world. We are the largest economic machine in the world by far so around the world everyone is
looking at what we are going to do here tonight.

BRENDAN TREMBATH: The Senate Democratic leader Harry Reid.

And Kim Landers, the Washington correspondent is on the line.

Kim I understand Republicans are digging in their heels - that they're still pressing for major
changes to this package.

KIM LANDERS: The Republican dislike of this Bill is plain Brendan. One of the Republican Senators
said a short time ago and I quote "this is a skunk. This Bill stinks." That said, there is a group
of bipartisan Senators who are trying to trim the size of this package.

They have been frantic behind closed doors negotiations today. Republicans still think it has got
too much spending, too few tax cuts.

The Republican leader Mitch McConnell has seized on opinion polls which show the American public is
starting to waver in its support for this package.

Here is Mitch McConnell.

MITCH McCONNELL: It strikes me that one of the core problems here, in spite of the new president's
popularity with Americans, is that there is a growing discontent - that the American people have
serious questions about the composition of this package.

So the question is not doing nothing versus doing something. The question is the appropriateness of
an almost trillion dollar spending Bill to address the problem.

BRENDAN TREMBATH: The Republican leader Mitch McConnell.

Kim, President Barack Obama has been pleading, almost on a daily basis, for this package to be
passed. Is he getting frustrated at the lack of progress?

KIM LANDERS: He certainly is. He says every day the American economy gets sicker. He is warning of
a catastrophe if this plan isn't passed.

In fact his administration is warning of five-million jobs being lost and the grim news just keeps
on coming. Today it was revealed that the number of Americans filing new unemployment claims has
hit a 26 year high - 626,000 people in the last week alone and Brendan that is why President Obama
says this package has to pass.

BARACK OBAMA: I believe that legislation of such magnitude as has been proposed deserves the
scrutiny that it has received over the last month. I think that is a good thing. That is the way
democracy is supposed to work but these numbers that we're seeing are sending an unmistakeable
message and so are the American people - the time for talk is over. The time for action is now.

BRENDAN TREMBATH: The US President Barack Obama.