Washington - Moving with lightning speed, key lawmakers announced agreement Wednesday on a $789 billion economic stimulus measure designed to create millions of jobs in a nation reeling from recession. President Barack Obama could sign the bill within days.

    "The middle ground we've reached creates more jobs than the original Senate bill and costs less than the original House bill," said Senate Majority Leader Harry Reid, one of the participants in an exhausting and frenzied round of bargaining.

    The bill includes help for victims of the recession in the form of unemployment benefits, food stamps, health coverage and more, as well as billions for states that face the prospect of making deep cuts in their own programs.

    "We hung tough, and it was modified only in the case of absolute necessity," said Sen. Arlen Specter, R-Pa.

    It also preserves Mr. Obama's signature tax cut - a break for millions of lower and middle income taxpayers, including those who don't earn enough to pay income taxes.

    "This is the right thing to do," said Sen. Max Baucus, D-Mont. "I am very proud of the give and take and how much all of us worked together to produce the legislation. We're showing to the world that the United States government is standing up, is leading."

    Earlier, House and Senate negotiators agreed to pare the legislation below $800 billion and reached for a final deal with the White House on the bill.

    As if to underscore the urgency, President Barack Obama said executives at Caterpillar Corp. told him they would rescind some of the 22,000 layoffs they recently announced once the stimulus is signed into law.

    CBS News White House correspondent Mark Knoller reports that Mr. Obama conceded there was some "justified" skepticism about the bill but he insisted he’s confident “that we can do things differently and better.”

    The real decisions were made in Capitol office suites where House Speaker Nancy Pelosi, Reid and other key lawmakers, often joined by White House officials and their own aides, worked late Tuesday night and picked up again in the morning.

    Earlier, Baucus said there was agreement to hold the bill to $789 billion, tens of billions below the cost of both the House and Senate bills that had cleared in recent days, and that 35 percent of the total would be in the form of tax cuts.

    The reductions in the bill's size caused grumbles among liberal Democrats, who described them as a concession to the moderates, particularly Specter, who are under pressure from conservative Republicans to hold down spending.

    The principal components of the measure included money to help victims of the recession, as much as $44 billion in aid for states, which face cuts of their own as a result of lower tax receipts, and the president's proposed tax cut for lower and middle-income wage earners.

    Officials said there was agreement to accept the White House's call to provide the tax break to workers who pay Social Security taxes but do not earn enough to owe income taxes, although it was possible the amount would be scaled back somewhat. The president sought $500 for individuals and $1,000 for couples.

    Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles.

    With numerous demands for the funds in the bill, lawmakers worked to satisfy competing demands.

    Mr. Obama has spoken out repeatedly in recent days to urge Congress to act quickly in the face of the worst economic crisis since the Great Depression.

    Even after the measure becomes law, he said, the challenge will be to effectively make use of the funds in an "endeavor of enormous scope and scale."