U.S. Senate Republicans push alternative stimulus plans

By Richard Cowan and Jeremy Pelofsky

WASHINGTON (Reuters) - U.S. Senate Republicans on Tuesday offered their own, cheaper economic stimulus plans focussed on tax cuts, pushing back against a nearly $900 billion (622.4 billion pound) Democratic plan they say encourages too much new spending.

As the Democratic-controlled Senate began thrashing out possible changes to the rescue package President Barack Obama has sought, Republicans indicated they may play hardball ahead of a vote that will require at least some Republican support.

"The American people are beginning to figure out what this package is, that it's not a stimulus package -- it's a spending package," said Sen. John McCain, an Arizona Republican who lost to Obama in the 2008 presidential election.

Senators worked throughout the day to find a bipartisan deal. McCain and four other Republicans unveiled their ideas priced at $445 billion, half the cost of Democratic version which started the day at $885 billion.

It centred on cutting in half a 6.2 percent payroll tax on employees, cutting the corporate tax rate to 25 percent from 35 percent and lowering the bottom two income tax brackets to 10 percent and 5 percent, all for one year.

McCain and Sens. Lindsey Graham of South Carolina, John Thune of South Dakota, Richard Burr of North Carolina and Mel Martinez of Florida also proposed $11 billion to help prevent home foreclosures and $65 billion in state grants to build and repair bridges and roads.

Obama hopes legislation to jump-start the ailing economy will be on his desk for signing into law by February 16 and there appeared to be strong public support for Congress to act. "We can't afford to wait," Obama told Fox News.

But how -- and with how much money -- remain subjects of contentious debate.