updated 2/3/2009 7:25:56 AM ET 2009-02-03T12:25:56

A top Republican called for more mortgage relief and additional tax cuts in President Barack Obama's massive economic stimulus package as Democrats conceded privately they will drop items that have drawn bipartisan criticism.

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Senate Minority Leader Mitch McConnell, R-Ky., told reporters Monday that "a stimulus bill must fix the main problem first, and that's housing." He promised that Republicans would offer a plan to have the government step in to reduce mortgage rates to the 4 percent range, which could shore up home prices and lower housing payments for millions of Americans.

At the same time, two questionable items in the plan — $75 million for smoking cessation programs and $400 million to slow the spread of HIV and other sexually transmitted diseases — have already been dropped from the most recent draft of the measure.

The Senate planned to begin debate on the legislation Monday and the process was likely to stretch into next week.

Democrats were prepared to offer amendments to add $20-$30 billion more for infrastructure programs such as roads, bridges, mass transit and water projects, according to Sen. Charles Schumer, D-N.Y.

Schumer also said Democrats would support a GOP-backed idea to double a home buyers tax credit from $7,500 to $15,000 and make it available to all home buyers instead of those purchasing their first home.

Video: Obama: No ‘silver bullet’ for economy The bill is a major test for Obama and Democrats controlling the Senate. There's unrest among Democrats such as Budget Committee Chairman Kent Conrad, D-N.D., and Ben Nelson, D-Neb., who have expressed concern that many of the items in the sprawling measure won't do much to stimulate the economy.

The price tag is already approaching $900 billion — and it's likely to grow during Senate debate.
The Senate measure is broadly similar to an $819 billion plan that passed the House last week. It contains almost $350 billion in tax cuts, including a two-year temporary $500-per-worker or $1,000-per-couple tax cut. There's also a $2,500 college tuition tax credit.

For businesses, there's a plan to infuse cash into money-losing companies by allowing them to claim tax credits on past profits, as well as incentives for investments in new plants and equipment.

The bill also contains extensive public spending: An extension and temporary increase in unemployment benefits; about $87 billion to help states with Medicaid bills; and aid to schools.

Stimulus plan 

Infrastructure projects would also get a boost under the Senate plan, including $27 billion for road and bridge construction and repair, $20 billion to repair and renovate school and university buildings, and $9 billion for improved access to broadband.

The Senate plan also contains an approximately $70 billion provision to ensure that 24 million tax filers won't get trapped by the alternative minimum tax. The AMT was designed four decades ago to make sure wealthy taxpayers pay at least some tax, but it never was adjusted for inflation and therefore threatens to trap millions of people for whom it was never designed.

The White House and some Democrats had resisted the AMT provision, arguing that it wouldn't do much to boost the economy since Congress was virtually certain to address the issue later anyway.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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