Republicans upset as House panels move on stimulus

WASHINGTON (Reuters) - U.S. House of Representatives committees on Thursday backed a raft of tax cuts and spending programs as part of the $825 billion package to boost the ailing economy, despite Republican complaints that their proposals were not getting a fair hearing.

The White House pressed Congress to quickly pass the Democratic package "to give the American people some confidence going forward," and praised the Senate Finance Committee's vote backing President Barack Obama's choice for Treasury secretary, Timothy Geithner.

But Republicans have criticized the package, saying the $550 billion in government spending would add too much to the deficit and that greater emphasis should be on tax cuts than the $275 billion now planned. Tax cuts, they argue, would more quickly jolt the economy out of a yearlong recession.

"The president asked for action, swift and bold. That is what we are doing," House Speaker Nancy Pelosi told reporters, adding that the bill would be considered on the House floor next week. "The American people are in a desperate situation."

Obama and Democrats, who control the House and Senate, want the package to be signed into law by mid-February but must overcome Republican criticism that it provides money for projects they said are inappropriate, such as the National Endowment for the Arts and the Washington National Mall.

Republicans made clear they were unhappy that their ideas were not gaining any traction in the various committees considering the stimulus package, and plan to raise them with Obama next week when some House Republicans meet with him.

Obama will also meet House and Senate Democratic and Republican leaders at the White House on Friday to discuss the legislation and other issues, Pelosi said.

TAX STRATEGY

With little changes, the House Ways and Means Committee passed along party lines a $304 billion piece of the package, including individual tax breaks, business tax incentives and help for unemployed families to keep their health insurance.

Republicans offered several provisions to cut some tax rates and extend other expiring tax breaks, but Democrats voted them down. The package, which also includes $20 billion in energy related tax breaks and incentives, will be combined with other elements of the proposed stimulus.

The House Energy and Commerce Committee approved numerous provisions for the stimulus package as well, including grants to expand high-speed Internet service in rural and hard-to-serve areas, again despite Republican objections.

Republicans were looking to the Obama meeting next week to force some changes.

"We will take our proposals directly to the president who has agreed to sit down with us and hear our case," said Rep. Dave Camp, the top Republican on the Ways and Means panel. "The American people know we cannot spend our way to prosperity."

Pelosi expressed little concern, arguing that more communication between Congress and the White House was a sign that Obama was breaking the partisan gridlock that has gripped Washington for years.

House Minority Leader John Boehner said his colleagues will present Obama with very specific proposals to stimulate the economy. "My colleagues on the Republican side need to be heard in this process. Our plan offers fast-action tax relief, not slow moving, wasteful government spending," he said.

Democratic Majority Leader Steny Hoyer told reporters Democrats should examine the proposals offered by Republicans, but added: "I think from a Republican standpoint, this is probably the largest tax cut they're going to get to vote for over the next 24 months. They ought to grab it."

Senate committees are expected to begin their work on the package next week and Senate Majority Leader Harry Reid said the bill could be debated in the full Senate that weekend.

Sen. Charles Grassley, the senior Republican on the Senate Finance Committee, said he believed the tax package was about the right size but was less confident about the spending side.

"I think on the tax provisions, including the size of the package, it's about right," he told reporters. "What we do on the expenditure side, and most of that comes in the way of aid to states, and it's pretty hard for people on my side of the aisle to swallow."

(Additional reporting by Richard Cowan, Matt Bigg, Tom Doggett and Kim Dixon; editing by Mohammad Zargham)