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House passes Republican bill to restructure tax rates

Bush called the vote the "victory for the American people"  

In this story:

Tax relief train moves at top speed

Slowing the train

The Senate looms


WASHINGTON (CNN) -- The House Thursday afternoon approved the centerpiece of the Bush administration's $1.6 trillion tax-relief plan.

Passage of the quickly conceived tax bill followed several hours of intense debate that often belied the new bipartisanship proclaimed just weeks ago by members of both parties.

Speaker of the House Hastert calls President Bush to tell him his tax bill passed

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The bill to reconfigure the tax code's rate system -- which sets the formulas for the amount of yearly tax paid depending on a filer's income -- passed the chamber by a vote of 230-198. Five members of the House did not cast votes.

The House's 220 majority Republicans were joined by 10 Democrats to pass the measure. Of the chamber's two independent members, one voted for the bill and the other against.

Speaking in Fargo, North Dakota, moments after the House vote, Bush appeared gleeful, telling a boisterous crowd, "The American people had a victory today. The American family had a victory today. The American entrepreneur had a victory today.

"One house down and now the Senate to go," Bush said. (More on Bush's speaking schedule)

The bill now moves to the Senate, where it is unlikely to be considered before May.

Most House Democrats were furious with the majority for pushing the bill through the legislative process so quickly, and they dusted off a number of parliamentary tricks in an attempt to stall its progress.

Still, they had little chance to stop the measure since President Bush promoted before Congress last week the tax plan he has championed since the early days of his campaign for the White House.

The bill that passed Thursday would gradually condense the current five income tax rates of 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent. By 2006, the rates would reach 10 percent, 15 percent, 25 percent and 33 percent. The bill would create an interim 12 percent bracket retroactive to January 1, 2001, that would apply to every taxpayer's first several thousand dollars of income.

The measure could cost the federal government an estimated $958 billion -- money that would be recovered from the government's projected 10-year, $5.6 trillion surplus.

"These across-the-board tax reductions are not the end, but only the beginning, for tax relief and tax fairness," declared GOP Rep. J.C. Watts of Oklahoma, chairman of the House Republican Conference, as the day of debate dawned.

"Taxpayers need relief," said House Speaker Dennis Hastert as the debate wound down. "Consumer confidence is down, energy prices are up, and economic growth is stagnant. The economy needs a boost, and this tax relief will provide that boost."

"Today, we are putting people before politics," Watts said at a rally held by the Republican leadership while the debate was waged on the House floor.

We should call this 'Bush's best beans' tax cut.' With this money, you can get two cans so everyone can have extra helpings."
-- Rep. Lloyd Doggett, D-Texas

Tax relief train moves at top speed

Democrats were angered that the GOP leadership and the Bush administration have been so willful in their push to get the bill through the House so rapidly, saying it makes little sense for the Republicans to draft a tax cut before creating a fiscal year 2002 budget resolution.

The measure passed the House Ways and Means Committee on a party-line vote last Thursday, just one day after Bush sent a 207-page budget outline to Congress, and less than 48 hours after he addressed a joint session of the House and Senate in prime time.

"This is a partisan process," said House Minority Leader Richard Gephardt, D-Missouri, on Thursday morning as the House geared up to dive into the debate.

"This is happening without a budget, without hearings, without input from anybody," Gephardt told reporters in his office. "This is more of the same."

"Neither party should be able to ram something through here that is totally offensive to the other party," he said, complaining that the debate structure laid out by the majority Republicans did no justice to a bill with a size and scope such as this one.

"This is the biggest tax bill we have ever taken up in this Congress," he said. "They've scheduled two hours debate on a $1 trillion tax cut. That's crazy."

A Democratic alternative that would have slashed taxes by some $600 billion over 10 years was rejected by the full House on a vote of 155-275. The Democratic plan, presented by Ways and Means ranking member Charles Rangel, D-New York, included a doubling of the standard deduction for married couples -- a facet not included in the Republican bill.

The Republicans have said they wish to get the tax rate changes passed first, and they plan to return later to issues such as marriage penalty relief and elimination of the estate tax.

Rangel said the substitute made fiscal sense, but Ways and Means Chairman Bill Thomas, who ran the debate for the Republicans, described it as "quickly conceived and hastily thrown together."

Slowing the train

Annoyed Democrats pointed out on the floor Thursday morning that law dictates Congress may not deal with tax legislation before approving a budget resolution.

Some tried to slow things down through procedural maneuvers, first by calling several votes for immediate adjournment of the House, then by demanding votes to reconsider a number of already-agreed-upon procedural resolutions. The moves added a significant amount of time to the debate.

The debate featured a requisite amount of accusation and some innuendo.

Rep. Lloyd Doggett, a Texas Democrat, held up a can of Bush's brand black-eyed peas on the floor, saying the Republicans were threatening the surplus, all to provide Americans enough money for an extra can of black-eyed peas or beans per day.

"We should call this 'Bush's best beans' tax cut,'" Doggett said. "With this money, you can get two cans so everyone can have extra helpings."

Thomas reacted bitterly, suggesting Doggett should add something to his argument with which he seemed to be quite familiar -- "canned ham."

The Senate looms

Gephardt predicted early on Thursday that a few of his party brethren would vote with Republicans to pass the bill, but its well-being is not so guaranteed in the Senate.

In the upper chamber, Democrats and moderate Republicans are expressing doubts that the surplus upon which the Bush administration is depending for its long-term budgeting forecasts will ever materialize.

House Republicans call President Bush to congratulate him after his tax-reduction bill passed  

Sen. Charles Grassley, chairman of the Senate Finance Committee, praised Bush Thursday morning on CNN, saying Bush's trips to the heartland to drum up support for the plan could yield results by the time the Senate is ready to discuss the issue.

"He is willing to go to the countryside to work hard to sell this," Grassley said. "I think he is going to have the capability of turning a lot of Democratic senators."

Bush left Washington on Thursday afternoon for another of those trips. He will visit North Dakota and South Dakota, Louisiana and Florida on Thursday and Friday, before heading to his ranch in Crawford, Texas, for the weekend.

Just before departure from the White House, he told reporters he looked forward to the House rendering its verdict.

"I am confident they will be doing the right thing," he said. "We have ample revenues to fund our priorities to pay down the debt, to set aside money to pay for contingencies, and ample revenues to pay money back to the taxpayers."

The White House stayed active Thursday, releasing figures it said showed people of lesser means stood to benefit most from Bush's tax plan.

The figures were unveiled to counter Democratic charges that 43 percent of Bush's tax cuts benefit only the wealthiest 1 percent of taxpayers.

"The largest percentage reductions come for people at the lowest income ranges," White House spokesman Ari Fleischer said.

Fleischer said the Treasury Department has produced a detailed breakdown of the distribution of tax cuts across income ranges, including figures showing those making between $30,000 and $40,000 per year will have a federal income tax cut averaging 38.3 percent, against 8.7 percent for people making more than $200,000 per year.

Reuters contributed to this report.

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4:30pm ET, 4/16

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