(Recasts with Senate Finance Committee passage)
By Jeremy Pelofsky and Richard Cowan
WASHINGTON, Jan 27 (Reuters) - A key U.S. Senate panel expanded the economic stimulus package to about $887 billion on Tuesday as President Barack Obama met with Republican lawmakers in a bid to win their support despite deep skepticism.
The Senate Finance Committee approved its $522 billion portion by a vote of 14-9 with changes including a fix to insulate middle-class taxpayers from the Alternative Minimum Tax for a year. That item alone added almost $70 billion to the original $825 billion price tag of the legislative package.
The Senate Appropriations Committee, by a vote of 21-9, also approved its portion of the stimulus bill -- $365.6 billion in spending.
The passage by the two panels clears the way for the full Senate to begin debate on the bill, which the Democrats want to pass sometime next week.
The House of Representatives was expected to vote on its own version of the stimulus package on Wednesday, though it does not include the tax patch.
The two bodies would have to work out their differences before the bill can become law.
As the Senate panels worked, Obama went to Capitol Hill to try to win over skeptical Republicans, who have been pushing for more tax cuts and less spending.
“Over the past two months more than one million jobs have been lost. We can expect similar job losses to continue if we fail to act,” said Senate Appropriations Committee Chairman Daniel Inouye, a Hawaii Democrat.
Several Republicans on the appropriations panel complained the measure, which aims to jump-start the stumbling economy, contained spending that would fail to produce jobs and was being rushed through Congress too quickly.
“We are throwing money down the tubes,” said Senator Christopher Bond, a Missouri Republican. He said the the bill would fail to ease the credit crisis that is at the heart of the ailing economy.
Besides providing roughly $550 billion in government spending, the legislation written by Democrats, who control Congress, also would provide about $275 billion in tax cuts.
The top Republican on the Senate Finance Committee, Senator Charles Grassley, groused that Republicans were largely shut out of the committee’s work on its part of the package. “We were never really at the negotiating table,” he said.
“I want to make clear that most on our side agree with President Obama that a stimulus package is very, very necessary,” Grassley said. “Where we differ is the degree to which the engine ought to be government or private sector.”
However, the Iowa Republican told reporters last week the size of the tax part of the stimulus bill was “about right” and that most Republicans support about 90 percent of the Democrats’ overall bill.
The panel adopted a Grassley provision to fix for one year the Alternative Minimum Tax, which was originally designed to ensure that wealthy people pay taxes, but instead is hitting millions of middle-income families.
House Republicans want a two-year fix.
Several other Republican amendments in the Finance Committee failed, including ones to reduce the lowest income tax rates, cut capital gains taxes for lower income earners, and turn billions of dollars in grants to states into zero-interest loans. (Editing by Patricia Zengerle and Bill Trott)