WASHINGTON (Reuters) - U.S. lawmakers and the White House were moving toward a final deal on Wednesday for what could be a stimulus plan of under $800 billion that Democrats say is crucial to rescuing the struggling U.S. economy.
"We're close. I expect to have it done by 3 p.m. (2000 GMT)," said Senator Max Baucus, one of the negotiators on the package of tax cuts and government spending designed to pull the U.S. economy out of its deep recession.
Senator Arlen Specter, a moderate Republican whose support is key to passage, said $789 billion "sounds pretty close" to the overall price tag, while Democratic Senator Ben Nelson added, "The target was actually lower than that."
House and Senate negotiators were expected to emerge from closed-door meetings later on Wednesday and gather in a public session to sign off on a compromise bill that would then be sent to the full House and Senate for final passage.
Once that happens, possibly by week's end, President Barack Obama would promptly sign the legislation into law.
"I've heard white smoke is imminent but I haven't seen it yet," said Senate Republican leader Mitch McConnell.
McConnell has been an outspoken critic of the bill, saying it contains too much government spending that would not stimulate the economy.
But Democrats who control both houses of Congress have mostly rebuffed Republicans, saying the combination of tax cuts and spending to rebuild roads, bridges and other projects in the bill would create or save up to 4 million jobs.
Democrats are working with three moderate Republican senators so that the bill could speed through the Senate.
Alone, the stimulus package is unlikely to fix the U.S. economy because it does not address financial sector problems. As long as banks face losses and struggle to raise money, lending and growth will suffer.
The Obama administration hopes to address this through a bank rescue program unveiled by Treasury Secretary Timothy Geithner on Tuesday. Wall Street plunged as traders expressed disappointment there were not more details.
Nelson said he thought some money for education had been increased in the stimulus compromise, adding that lawmakers were scaling back money for tax incentives to encourage auto and home buying.
Sen. Susan Collins, a Maine Republican, said lawmakers intended to keep in a one-year fix to a quirk in the tax law that threatens to ensnare the middle class in a tax intended for the richest. Other specifics were not yet available.
One House Democratic aide said the sides were finding it easier to agree on tax cuts than on the more complicated list of spending priorities contained in the legislation.
The House has passed a bill costing about $820 billion, while the Senate's version will cost $838 billion.
House Speaker Nancy Pelosi says her chamber's legislation would create more jobs, fulfilling Obama's pledge to create or save up to 4 million jobs through construction and investment projects and tax cuts to put money in consumers' hands.
But Senate Majority leader Harry Reid, hamstrung by more difficult Senate procedures, cut out some spending that Republicans objected to in order to get the required 60 votes.
Apart from three senators, all Republican lawmakers have opposed the bills as written so far. Democrats had scant hopes of attracting many more of their votes for a bill Obama says needs to be enacted quickly to avert a "catastrophe."
Various business groups support the Democratic-written legislation. The U.S. Chamber of Commerce, for example, supports "many of the pro-growth tax initiatives in the bill, as well as the spending-side provisions to provide stimulus, create jobs and get Americans back to work."
(Editing by Alan Elsner)