UPDATE 1-US stimulus projects draw ire, become trading chips?

(Adds Senator Kyl, Sabato comments)

By Jeremy Pelofsky

WASHINGTON Feb 1 (Reuters) - President Barack Obama may yet win skeptical Republicans in the U.S. Congress over to his economic stimulus plan if he and fellow Democrats abandon some pet projects.

Obama would like to signal he is working for all Americans with a show of bipartisan unity when the Senate votes later this month. No Republican backed the plan that passed the House of Representatives last Wednesday.

Republicans accuse the Democrats, who control both houses, of loading up on projects known as "pork" that curry favor with constituents but which they say will not stop the slide in the U.S. economy after 13 months of recession.

Republicans have blasted the $800 billion to $900 billion package for such programs as $335 million to prevent sexually transmitted diseases and $25 million to rehabilitate trails for all-terrain vehicles. They prefer the money go into more tax cuts.

"I hope that at some point the White House will exercise adult supervision here ... right now it's nothing but a huge spending package," said Senator Bob Corker, a Tennessee Republican.

Democrats may woo Republicans by offering up projects as bargaining chips, but Larry Sabato, a University of Virginia political science professor, said even then a majority of Republicans will end up opposing the final package.

"In the end, the bill won't be all that clean, and (will) justify a 'no' vote," Sabato said.

Democrats already have cut two provisions in the House bill passed -- $200 million to fix up the National Mall and millions for family planning that Republicans said would fund contraceptives. [ID:nN28517878]

The No. 2 Republican in the Senate, Jon Kyl of Arizona, said on Sunday he saw support for the stimulus bill eroding and "major structural changes" were needed to win Republican support.

"You have to start from scratch and reconstruct this," Kyl told "Fox News Sunday."

JOBS?

Tom Schatz, president of the watchdog group Citizens Against Government Waste, said many projects in the bill would modernize government facilities but not create long-term, private-sector jobs.

Republicans have been poring over the 647-page, $819 billion House bill and the $887 billion measure proposed in the Senate to expose spending they say will do little to create jobs and spur economic growth.

In addition to the National Mall project, they highlight such programs as $34 million to remodel the Commerce Department's headquarters and up to $150 million to help producers of livestock, honey bees and farm-raised fish.

The stimulus was originally crafted to have about $275 billion in tax breaks and some $550 billion in spending. Obama's administration has indicated a willingness to modify the package.

By relenting, Democrats hope to win support for the major share of the legislation: spending on such projects as upgrades to transportation and the aging energy grid as well as expanded broadband access.

Republicans have clubbed Democrats with a report by Congressional Budget Office Director Douglas Elmendorf, who advised that direct payments to individuals and cuts in federal taxes would have the fastest impact on the economy.

In the Senate this week, Republicans will likely have an opportunity to try to strip out some provisions they oppose and try to shift the emphasis to tax cuts. They may even succeed here and there. [ID:nN30376721]

Senators John Ensign, a Nevada Republican, and Barbara Boxer, a California Democrat, are working on language to slash taxes on companies that bring back profits from overseas from the current 35 percent rate.

"We have a good chance," Ensign said, noting that a similar tax break a few years ago won a large majority of support.

But Senator Charles Schumer, a New York Democrat, took a different view, saying: "The level of tax cuts is about as high as it ought to go."

After the plan passes the Senate, lawmakers will hammer out a joint bill expected to clear both Democratic-controlled houses by mid-February. (Editing by Mohammad Zargham and David Wiessler)