House passes tariff bill to help manufacturers

WASHINGTON (Reuters) - The House of Representatives approved a bill on Wednesday to help U.S. manufacturers by suspending import duties on hundreds of raw materials they use to make finished goods.

House Majority Leader Steny Hoyer said the bill, which passed overwhelmingly even though Republican leaders opposed it, was a preview of a bigger package Democrats plan to offer in coming weeks to boost manufacturing jobs.

"Democrats know that a strong manufacturing base is key to our economic revival, and the passage of this bill today is a good step forward as we continue to create the jobs America needs," Hoyer said.

The House voted 378 to 43 to approve the U.S. Manufacturing Enhancement Act, a measure previously known as the Miscellaneous Tariff Bill and passed every few years.

Republicans voted 129 to 42 in favor of the bill, even though their leaders said it violated the party's self-imposed moratorium on congressional "earmarks" that many blame for what they call wasteful spending and the record U.S. debt.

The Senate also must approve the bill before it can go to President Barack Obama for his signature.

The National Association of Manufacturers said the bill, if enacted, would increase U.S. production by $4.6 billion and support almost 90,000 jobs.

"Manufacturers of all sizes use these vital tariff suspensions to obtain raw materials, proprietary inputs and other products that are not available in our nation," the group's president John Engler said.

"Without them, the costs of these companies' products will inevitably increase, forcing them to pass on these costs to consumers. This hinders competitiveness and translates into lost jobs," he said.

The Congressional Budget Office has estimated lost revenue from the tariff suspensions at $297.8 million through 2012. That is paid for through custom user fees.

House Ways and Means Committee Chair Sander Levin, a Democrat from Michigan, which has lost many manufacturing jobs, called the vote "a defeat for the House Republican leadership which attempted to put partisan politics and short-term political gain above the needs of American businesses and workers."

Representative Kevin Brady, a Texas Republican who opposed the bill, said the vote proved Democrats "can produce strong, unified support for trade legislation."

"I look forward to working with my colleagues to move forward with pending trade agreements with Colombia, Panama, and South Korea," Brady said, referring to trade deals blocked for years by congressional Democrats.

(Reporting by Doug Palmer and Susan Cornwell; Editing by Philip Barbara)