House Democrats push tax breaks through

GOP favors deeper cuts, seeks more data

WASHINGTON - Economic stimulus legislation at the heart of President Obama's recovery plan advanced in Congress yesterday over persistent opposition from Republicans seeking deeper tax cuts than the administration and Democrats favor.

"We are very pleased with the progress," said House Speaker Nancy Pelosi, Democrat of California, after $275 billion in tax cuts cleared the House Ways and Means Committee on a partyline vote of 24-13. Democratic leaders have promised the measure will be ready for Obama's signature by mid-February.

"It will create jobs immediately, and it will also lay the foundation for economic stability as we go forward," Pelosi added.

But Republicans said there is no reliable estimate of the bill's impact on employment.

"The American people deserve to know what they are getting for their nearly $1 trillion," said Representative Dave Camp of Michigan, the top Republican on the tax-writing committee.

Also yesterday, the House cast a largely symbolic vote to reject Obama's request for the unspent $350 billion in a recovery fund for the financial sector.

The 270-155 vote was a moot point because the Senate refused to block the release of the money last week. That made it available to the new administration.

House members in both parties have been under pressure to oppose further spending of stimulus funds.

The money is half of the $700 billion Troubled Asset Relief Program. Congress set up the fund last fall at the request of the Bush administration. Since then, the program has come under bipartisan criticism for sending money to banks with few requirements.

Congressional supporters estimate the current cost of the measure at $825 billion, including $275 billion in tax cuts and $550 billion in spending on areas such as healthcare, education, energy, and highway projects. The total is expected to grow as the legislation nears passage.

On the economic stimulus vote, Democrats closed ranks to preserve a tax break for this year and 2010 that would mean $500 for many workers and $1,000 for millions of couples, including those whose earnings are so low they pay no federal income tax.

They also turned back a Republican attempt to jettison a new federal subsidy to help laid-off workers pay for health insurance after they lose employer-paid coverage, and a third to waive income taxes on unemployment benefits for two years.

Democrats contend that the Republican proposals favor upper-income individuals and couples who they said benefited disproportionately from tax cuts passed during the administration of George W. Bush.

"We need to be dealing with people at the bottom of the income scale," said Representative Jim McDermott, Democrat of Washington. He also noted that the legislation would provide a $25-per-week increase in unemployment benefits.

But Republican Camp cited a report by the nonpartisan Congressional Research Service that he said showed lower- and middle-income workers already would have received most of the benefits from the proposal to eliminate the tax on unemployment benefits.

Democrats have a majority on the committee, as they do on all panels as a result of their gains in last fall's elections. And while Republicans sought several changes in the legislation, the proceedings were devoid of drama.

Republicans in the House and Senate have been developing alternatives to the Democratic legislation, and Representative John A. Boehner of Ohio, the GOP House leader, announced a meeting scheduled next week with Obama.

"Our plan offers fast-acting tax relief, not slow-moving and wasteful government spending," he said, referring to a study by the Congressional Budget Office that questioned administration claims that the money could be spent fast enough to reduce joblessness quickly.

Not all Democrats were completely pleased with the legislation making its way to a vote on the House floor next week.

The portion of the measure ticketed for highway and bridge construction, $30 billion, is far less than some favor, and there was grumbling.

"This bill . . . is not even near what we need for shortterm needs and it does not in any meaningful way address the longterm needs for our country," said Representative Peter DeFazio of Oregon, although, he added, "It is better than nothing."