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U.S. House passes $819B economic stimulus

In a swift victory for U.S. President Barack Obama, the Democratic-controlled House approved a historically huge $819-billion economic stimulus bill Wednesday night filled with new spending and tax cuts.

Obama urges swift action as legislation goes to Senate for debate on Monday

The Democratic-controlled U.S. House of Representatives has approved President Barack Obama's $819-billion stimulus package.

The 244-188 vote on Wednesday night will now send the legislation to the Senate for consideration.

"We don't have a moment to spare," Obama declared at the White House as congressional allies hastened to do his bidding in the face of the worst economic crisis since the Great Depression.

Businesses and workers are counting on Washington for "bold and swift" action to steady the country's struggling economy, Obama said.

The Senate is expected to begin examining the proposed package on Monday, said U.S. Senate majority leader Harry Reid.

Reid told Reuters he would like to see the debate concluded by the end of next week.

Obama hopes to have the legislation signed into law by mid-February.

The White House-backed legislation includes an estimated $544 billion in federal spending and $275 billion in tax cuts for individuals and businesses.

Included is money for traditional job-creating programs such as highway construction and mass transit projects.

There are also increases to unemployment benefits, health care and food stamps that are designed to aid victims of the economic downturn.

The centrepiece tax cut calls for a $500 break for single workers and $1,000 for couples, including those who don't earn enough to owe federal income taxes.

If passed, tens of billions of additional dollars will also go to the states to ease the recession's impact on schools and law enforcement.

Obama hopes the plan will generate or save up to four million new jobs.

Obama thanked the House for its quick passing of the economic stimulus package. In a written statement, he added, "What we can't do is drag our feet or allow the same partisan difference to get in our way."

New era in U.S.

The passing of the legislation through the House marks a new era in the U.S., said Speaker Nancy Pelosi.

"The ship of state is difficult to turn," Pelosi said. "But that is what we must do. That is what President Obama called us to do in his inaugural address."

With unemployment at its highest level in a quarter-century, the banking industry wobbling despite the infusion of staggering sums of bailout money and states struggling with budget crises, Democrats said the legislation was desperately needed.

"Another week that we delay is another 100,000 or more people unemployed. I don't think we want that on our consciences," said Democratic Representative David Obey of Wisconsin, chairman of the House appropriations committee and one of the leading architects of the legislation.

But Republicans said the bill was short on tax cuts and contained too much spending, much of it wasteful and unlikely to help laid-off Americans.

The party's leader, Representative John Boehner of Ohio, said the measure "won't create many jobs, but it will create plenty of programs and projects through slow-moving government spending."

A Republican alternative, consisting almost entirely of tax cuts, was defeated, 266-170, moments before the final vote.

On the final vote, the legislation drew overwhelming support among Democrats while Republicans unanimously opposed the legislation despite Obama's frequent pleas for bipartisan support.

A more bipartisan measure is taking shape in the Senate.

Obama personally pledged to House and Senate Republicans in closed-door meetings on Tuesday that he is ready to accept modifications as the legislation advances.

Canadian implications

The Senate is expected to expand on a clause that indicates that none of the funds made available by the legislation can be used for a project unless all of the iron and steel used in it have been produced in the United States.

Perrin Beatty, president of the Canadian Chamber of Commerce, told CBC News if the protectionist clause is not removed before the bill is passed into law it could have implications for Canada.

"If we're shut out of that, it will potentially be quite damaging for Canada," Beatty said. "It will slow down the recovery."

American businesses have also sent a letter to congressional leaders urging that the inclusion of such a clause could result in retaliation from other countries.

But trade treaties, including the North American Free Trade Agreement, forbid the kind of protectionism contained in the clause.

"I'm calm about these things," said Industry Minister Tony Clement. "Lots of bills go before Congress … there's always room for debate and amendment to those bills."

Canadian diplomats have also been lobbying to have the language removed because NAFTA violations can take a long time to appeal if the clause were to be included.

With files from the Associated Press

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