$100bn stimulus bill brings end to US Congress harmony

There was precious little of the bipartisanship that has been the hallmark of US politics since September 11th when the House of Representatives passed by the narrowest of majorities a $100 billion (€112 billion) economic stimulus package on Wednesday evening.

The bill, pushed through by the House's Republican majority by 216 to 214 votes, will face major amendments when it gets to the Democratic-led Senate next week.

The debate was on familiar ground. The Republicans insisted, along with their President, that the emphasis should be on tax cuts to business - while the Democrats demanded spending increases and tax breaks aimed at the lower paid.

More aid for the unemployed, including federal help with laid- off workers' health insurance premiums - and up to $20 billion in spending on homeland security and infrastructure items - are among proposals gaining ground in the Senate.

The bill as agreed consists almost entirely of tax cuts - $70 billion to companies and $28 billion to individuals - the most notorious of which involves a payout to seven giant corporations of as much as $3.3 billion, and to IBM alone of $1.4 billion. The bill abolishes a minimum corporate tax provision and allows for enhanced write-offs of capital assets.

The tax benefits to individuals are heavily skewed to upper income groups, although there are also one-off $600 payouts to couples who missed out on them in the last budget, costing some $13 billion.

"This bill is a giant tax giveaway to corporations and the wealthy," the Democrats' leader in the House, Mr Dick Gephardt, complained. "The workers who have lost their jobs get bread crumbs from this bill," he said.

The Republicans insist that the breaks will encourage companies to keep on staff and to invest in capital goods, a view strongly supported by the White House.

"Investment is the driving engine in the economy," said the House Majority Leader, Mr Dick Armey. "This bill provides a reward for the risk-takers who create jobs in America." President Bush even took time out from the war to encourage the House.

"Part of the war we fight is to ensure that the economy continues to grow," he told small business leaders on Wednesday.

But in the Senate, his Treasury Secretary, Mr Paul O'Neill, is having to adopt a more moderate tone. He last week described the House bill as "showbusiness", an acknowledgement that much of what was going on there was to do with pre-election posturing rather than a serious attempt to legislate.