House passes economic stimulus legislation

By Donna Smith

WASHINGTON (Reuters) - The U.S. House of Representatives on Tuesday overwhelmingly approved a plan to give the U.S. economy a $146 billion election-year boost through tax rebates and other measures to stave off a possible recession by boosting business and consumer spending.

The plan, which passed by a vote of 385-35 and is backed by President George W. Bush, includes tax rebates of up to $600 for individuals and $1,200 for married couples, plus $300 per child. The legislation also includes tax breaks to encourage business investment in new equipment.

It now goes to the Senate, where Senate Majority Leader Harry Reid said it would be taken up quickly. The Nevada Democrat said he expects a number of amendments to be offered to the bill. But backers of the House bill are concerned that demands in the Senate to spend more for roads and other programs will slow down the legislation.

Lawmakers are aiming to get a bill to Bush's desk by mid-month and any changes in the Senate would mean further negotiations with the House and the White House to work out their disagreements.

Senate Republican Leader Mitch McConnell of Kentucky said the Senate should approve the House-passed version to avoid delays.

"This is not a time to get into some kind of testing of wills between the two congressional bodies. This is a time to show that we can rise above partisanship, do something important, and do it quickly," McConnell said.

House Speaker Nancy Pelosi, a California Democrat, and House Republican Leader John Boehner of Ohio, also urged the Senate to accept the House-passed package that the two leaders negotiated with the White House.

Lawmakers are hoping the rebates and business incentives will spur consumer and corporate spending and keep the economy from dipping into a recession ahead of the November presidential and congressional elections. U.S. economic growth is expected to slow this year in the face of a downturn in the housing market, a subprime mortgage crisis, a tightening credit market and rising oil prices.