Bush tax cut passes first hurdle

The Republican-controlled House of Representative has voted for an across-the-board tax cut of nearly $1 trillion over the next decade.

It handed President George W Bush a major victory only 48 days into his term.

The vote was 230-198 in favour of the reductions at the heart of the president's economic programme and came over the objections of Democrats who said the cut was too big and aimed at upper-income taxpayers.

Approval of Mr Bush's plan sent the bill to an uncertain fate in the Senate, where a pivotal bipartisan group of lawmakers has expressed concern about the $958 bn (£650bn) price tag.

"Who among us can say that the economy doesn't need a little encouragement," said Speaker Dennis Hastert, an Illinois Republican, as the House debated the first priority piece of legislation of the new president.

In addition, he said, cutting taxes "will give consumers more money to pay off credit card bills. It will give families more money to pay off high energy bills. It will give parents more money to pay for education expenses."

House Democratic Leader Dick Gephardt of Missouri countered that the plan was so big it would complicate efforts to pay down the national debt and make it more difficult to safeguard programmes such as Medicare and Social Security.

Underscoring Democratic complaints the Republicans were favouring upper-income taxpayers, he added, "If we're going to deliver tax relief let's deliver it to people who need it."

The legislation would gradually reduce and condense the current five graduated income tax rates of 15%, 28%, 31%, 36% and 39.6%. By 2006, rates would be pegged at 10%, 15%, 25% and 33%.

In a striking show of unity, all 219 Republicans who voted did so in support of Mr Bush's plan. Ten Democrats crossed the aisle to vote with them. One independent also supported the measure.