Washington  - US lawmakers reached a compromise deal Wednesday on a record economic recovery package which could allow the plan to pass both houses of Congress before the end of the week.

The leaders in the Senate and House of Representatives ironed out differences in separate versions of the stimulus bill and knocked the total price tag down to 789 billion dollars. The measure includes a mixture of tax cuts and government spending projects to pull the US out of its worst recession in decades.

The chambers had earlier each passed separate versions of the legislation, with the Senate approving an 838-billion-dollar deal Tuesday and the House passing a
819-billion-dollar version last week. In announcing the deal on Wednesday, senators praised the ability to shave billions off the cost of the programme while staying faithful to efforts to boost the economy and create jobs.

"The agreement we've reached stays faithful to the principles we've outlined," Senate Majority Leader Harry Reid said, noting that it costs less and will create more jobs than both earlier versions of the legislation.

The compromise includes about 276 billion dollars in tax relief, or 35 per cent of the plan, and also increases spending on infrastructure projects to 150 billion dollars, said Senator Susan Collins, who was one of three Republicans to work out the Senate version of the bill.

It also includes a fund to help state governments hard hit by the crisis to close holes in their budgets. Most of the nation's 50 states are predicting budget shortfalls, with California Governor Arnold Schwarzenegger threatening to lay off 10,000 state employees.

Both chambers must now vote on the new version of the bill and Reid said he hopes to have it completed within the next few days, perhaps as early as Thursday, to meet a goal set by President Barack Obama of signing the legislation into law by the Presidents Day holiday on Monday.

Obama, who views the stimulus as the cornerstone of his efforts to revive the US economy, continued to urge its quick passage during a visit to a construction site in Springfield, Virginia earlier Wednesday.

"We're at the doorstep of getting this plan through the Congress," Obama said, calling the stimulus package "both urgent and essential to our recovery."

About 3.6 million jobs have been lost and the unemployment rate has crept to 7.6 per cent since the US recession began in December 2007. Obama has promised his stimulus will save or create up to 4 million new jobs. (dpa)