WASHINGTON – House Republicans eked out a win for a $100 billion economic stimulus package that had nearly buckled under Democratic whacks at it over the last week and a half.
The 216-214 vote was the slimmest margin in a post-Sept. 11 Congress, virtually ending the bipartisanship that has largely marked the chamber since terror attacks hit the World Trade Center and the Pentagon.
"It officially shatters the myth of bipartisanship," said Rep. Charles Rangel, D-N.Y.
The bill's provisions provide tax relief, unemployment benefits for states and a tax rebate for low-income earners similar to one paid out to Americans this past summer.
"About 60 cents of every dollar goes to the machine that creates the jobs, oftentimes it's called business or corporation," said the author of the bill, Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee. "There tends to be negative reactions when you're going to provide some money to corporations or business."
Democrats voted in lock step to oppose the bill, arguing that $71 billion of the $100 billion comes in the form of business breaks, including a capital gains tax cut and elimination of the corporate alternative minimum tax.
Democrats preferred a plan, offered by Rangel, which leaned more heavily to providing health benefits for the unemployed and some tax relief for businesses. It failed as a substitute measure in a 166-261 vote on the floor.
Treasury Secretary Paul H. O'Neill, who drew fire last week for calling debate over the bill "show business," said the Democratic plan was "a spending package, not a stimulus package."
After Wednesday's vote, O'Neill said he was "happy the vehicle was moving" in the direction of stimulus.
The House bill cuts long-term capital gains taxes from 20 percent to 18 percent, repeals the corporate alternative minimum tax and offers refunds to major corporations who paid it as far back as 1986. It also enhances write-offs for business capital assets and allows companies to deduct current operating losses from taxes they paid up to five years earlier.
The bill provides rebate checks to workers who did not receive one over the summer because they don’t make enough to pay taxes but contribute to Social Security payroll taxes and it speeds up tax cuts for middle income earners that were approved by Congress earlier this year. It also gives $12 billion to states to help with unemployment claims.
President Bush, sensing the brewing partisan battle that ended in the contentious floor vote late Wednesday afternoon, earlier urged Congress to move quickly on the economic stimulus package, which he said would ultimately complement the $60 billion in spending measures already approved to jolt the country back into action.
"Part of the war we fight is to make sure our economy continues to grow," Bush said at a speech to printing plant workers in Glen Burnie, Md.
The president stopped short of endorsing the House bill. He said he expected to work in a bipartisan fashion with both the House and Senate to deliver a package that will likely be a compromise between the House bill and a proposal introduced by Sen. Max Baucus, D-Mont., this week.
Baucus unveiled a $70 billion plan, $35 billion of which will go to tax relief and $35 billion to expanded unemployment and health benefits for displaced workers.
"This proposal appropriately responds to the sign of the times, helping this nation get back to work and recover quickly," Baucus said.
Senate Democrats were also taking another look at the House Democratic proposal, which would extend unemployment benefits for 26 weeks, would increase weekly unemployment benefits, and would create a one-year program providing federal payment of up to 75 percent of COBRA health care, which fills in for up to six months when an employee loses employer-provided health insurance.
The dispute over the bill emphasizes longstanding, impassioned differences between the two parties. Republicans believe holding the line on spending and heavy tax cuts – especially to business – will put money in the pockets of consumers and stimulate job growth.
Democrats argue that the government has a responsibility to provide assistance to low-paid workers and others in need of assistance, which will eventually help consumers back onto their feet and ready to contribute to the health of the economy.
Arguments on the floor of the House echoed those differences.
"Reverse Robin Hood is continuing here on the floor under the guise of helping the American people," he said. "Let's get real. Let's stop dumping money into corporate coffers," said Rep. Peter DeFazio, D-Ore.
"Roughly two-thirds of the taxpayers in the top income brackets are small business and entrepreneurs. Increasing the income tax burden risks slowing the economy even more," said House Majority Leader Dick Armey, R-Texas.
Senate Majority Leader Tom Daschle, D-S.D., also said the bill that is now coming to the Senate for a vote "is not as much stimulus as it is just going back to the same approaches that our Republican colleagues have used for a long time to address issues of import to them."
"It's not cost-contained. It's show business," he added.
O'Neill headed to the Senate Wednesday to discuss with leaders there ways to make the bill palatable to the Democratic-led Senate. Sen. John Breax, D-La., warned that unless a bipartisan measure taken in the Senate, there would be no passage of any package in his chamber.
The Associated Press contributed to this report.