House passes bill that makes Bush tax cut permanent

WASHINGTON -- The House voted Thursday to prevent President Bush's big tax cut from disappearing after 2010, an action both Republicans and Democrats said would echo loudly in this year's congressional campaigns.

The legislation's most substantial results will be political arguments, since Senate Majority Leader Tom Daschle, D-S.D., has said he will not bring the bill up for a vote in his chamber. Republicans said they would nevertheless work to increase pressure on Senate Democrats, particularly the 12 who voted for the tax cut last year.

Republicans, who prevailed in the House on a largely party-line 229-198 vote, said making the $1.35 trillion tax cut permanent would give taxpayers greater certainty, clear up estate planning and bolster the economy by removing the threat the of a huge tax increase if the package expires as scheduled after Dec. 31, 2010.

Among other things, income tax rates would rise to pre-2001 levels, the estate tax would rise again after being repealed for only one year, the child tax credit would be halved and generous benefits for retirement savings and education would evaporate.

'Disarming tax bomb'

"We are taking a step today to disarm this ticking tax bomb," said Rep. Kenny Hulshof, R-Mo., a sponsor along with Rep. Paul Ryan, R-Wis.

Democrats viewed the vote as a referendum on the cost of tax cuts versus protecting Social Security, a key message in their attempt to recapture control of the House.

"Let me assure you that this vote is going to be the subject of a lot of campaigns for the House this fall," said Democratic leader Dick Gephardt, D-Mo.

Nine Democrats voted in favor of the bill, compared with 28 who supported the final tax cut measure last year. Only one Republican, Rep. Connie Morella of Maryland, was opposed.

"I hope the Senate acts quickly to provide millions of hardworking Americans with the permanent tax relief they deserve," said Treasury Secretary Paul O'Neill.