Barack Obama, Senate | featured news

The Senate's top Democratic on budget issues is scrapping Barack Obama's signature tax $400 tax credit for most workers as he seeks to cut the deficit to sustainable levels.

Is Gov. Arnold Schwarzenegger - the former bodybuilder and action hero - getting ready for the next big starring role in his larger-than-life political career?

For Californians who read political tea leaves, some signs are starting to emerge: A few months ago, the Republican was on the campaign trail for presidential candidate John McCain, lambasting Barack Obama as a guy with "skinny legs," "scrawny little arms" and socialist ideas. On Thursday, there he was standing next to President Obama - hugging him and praising him as the nation's economic savior and reformer.

The plan is budgeted at $789 billion, which is smaller that original bills passed by each chamber. It could be sent to President Obama for his signature by the end of the week.

House and Senate negotiators have struck a deal on a final version of a sweeping economic recovery package.

A Senate committee on Thursday abruptly postponed a vote to confirm President Barack Obama's nominee to be labor secretary following a news report that her husband may have tax problems.

President Obama said Thursday that the time for talk on an economic recovery package is over and "the time for action is now.".