House Passes Economic Stimulus Plan

Senate feuding began early Thursday following a House vote authorizing a revised version of an economic stimulus package that had been touted by House Republicans and Senate centrists as a compromise to opposition from Senate Democrats.

"I hope the American public understands the charade, and that's what it is," said Sen. Harry Reid, D-Nev., the Democratic whip.

The House vote of 224-193, passed largely on party lines at 4 a.m. Thursday, gave President Bush additional ammunition to push Senate Democrats into making a deal to pull the economy out of a recession that was heightened by the Sept. 11 terror attacks.

"For the sake of America's workers, I call on the Senate to act now on this plan, which can pass the Senate with a bipartisan majority if it is brought up for a vote. If this bipartisan bill gets to my desk, I will sign it," the president said in a pre-dawn statement.

Senate Majority Leader Tom Daschle, D-S.D., did not say whether he would allow a floor vote on the bill, but even if he did it's unlikely that Senate Republicans and the few Senate centrist Democrats would be able to overcome the 60-vote hurdle that would be needed to get the bill out of a procedural block.

"They can be sure it will never, never, never become law,'' said Rep. Charles Rangel, D-N.Y.

A few lawmakers continued their sporadic efforts at achieving a compromise, but the chances of that dwindled as Congress approaches its annual winter recess. The issue could resurface when lawmakers return in late January, but its benefits would be delayed in an economy that's already showing signs of recovery.

The House legislation would provide $218 billion in economic stimulus and jobless aid over the next three years; extend unemployment benefits by 13 weeks for those laid off since the March 15 onset of economic recession; and provide a 60 percent, up-front tax credit unemployed people could use to help pay for health insurance. People who didn't get a tax rebate this summer would get a check of up to $600.

The 27 percent income tax rate would drop to 25 percent on Jan. 1, four years ahead of schedule. That rate applies in 2002 to taxable income between $27,950 and $67,700 for individuals; $46,700 and $112,850 for married couples.

Businesses could write off 30 percent of new investment in each of the next three years — small businesses would have a higher expensing write-off limit of $35,000 for two years and corporations would get $13 billion in relief over 10 years from the alternative minimum tax. There would also be aid to help New York City recover and $4.6 billion for states to use for health care needs.

Democrats opposed tax cuts aimed at businesses, arguing they would drive up the federal deficit. Their main objection, however, was to the health insurance tax credit, saying that it would not protect laid-off workers who would be forced to get insurance in a marketplace that sets high premiums for individuals and denies coverage to those with pre-existing conditions.

Republicans argued that the credit offers aid that was neglected in the first bill passed by House lawmakers in late October.

"This bill does it. Does it to the tune of 30 billion dollars, and gives these people a lot of hope and a lot of time to get back on their feet and to find that new job," said House Speaker Dennis Hastert, R-Ill., who suggested Thursday that the House may be called into session earlier than it had originally planned to revisit legislation that had not been voted on because of the stimulus negotiations.

The earlier House bill didn't include the unemployment benefit extension but did include billions of dollars in refunds to corporations for alternative minimum taxes they paid as far back as 1986. Republicans pushed through the second bill in part to give uneasy lawmakers a more satisfactory product to stand behind.

"Republicans have given a lot,'' said House Ways and Means Committee Chairman Bill Thomas, R-Calif. "But our Democratic colleagues have given very little.''

The Associated Press contributed to this report.