Bush's $100bn booster package

Bush: strongly in favour of more tax cuts

The US House of Representatives has narrowly passed a plan to inject $100bn into the country's flagging economy through further tax cuts.

But the bill is likely to face strong opposition in the Democrat-controlled Senate, which favours fewer tax cuts and more public spending.

"It's clear the House bill cannot pass the Senate as it is," commented one Senator.

The White House said it would continue to work with Congress on a final product.

Bush approval

Treasury Secretary Paul O'Neill will meet senators of both parties to hammer out a compromise.

President George W Bush has already given his seal of approval to the House plan.

The House legislation, which would cost an estimated $99.5bn in 2002 and more than $159bn over 10 years, includes four key items sought by President Bush:

• repeal of the corporate alternative minimum tax
• A new round of tax rebate cheques of up to $600 for lower-income workers
• a cut in the 27% income tax rate to 25% in 2002 instead of 2006
• greater tax write-offs for business equipment purchases.

The plan has been criticised by Democrats for not being generous enough to ordinary Americans and not doing enough to help people who lose their jobs.

Democrats favour fewer tax cuts and a $55bn public spending programme.

The final legislation could take some weeks to formulate.

Anti-terrorism bill

Meanwhile, the House of Representatives has also passed tough new measures to deal with the threat of terrorism.

The Bill, dubbed 'The Patriot Act' expands police and federal surveillance powers and amends immigration laws.

It also includes new measures to clamp down on money laundering.

The Senate could vote on the bill as early as next Wednesday, after which it will be sent to President Bush for his signature.