WASHINGTON (AFP) - Congress approved a 146-billion-dollar tax cut endorsed by both President George W. Bush and his rival John Kerry but criticized as a budget buster by some economists.
The House of Representatives voted 339-65 late Thursday for the measure, followed by the Senate, which endorsed the bill by a 92-3 vote.
Earlier this week, House and Senate lawmakers in a conference committee approved a compromise plan to extend the expiring income tax cut provisions, while renewing some corporate tax breaks.
It marked the fourth major tax cut enacted by Congress at the urging of Bush, estimated to be worth 146 billion dollars over 10 years.
"I applaud Congress for taking action to keep our economic recovery on track and prevent a tax increase on nearly 94 million Americans, especially lower- and middle-income families," said Treasury Secretary John Snow.
Analysts said the bill may give Bush a political victory going into the November 2 election, but Kerry also endorsed the measure as offering middle-class relief.
"Millions of American families are being squeezed by the weak Bush economy, falling incomes and rising health costs, and we should extend middle-class tax breaks to help them," Kerry said just ahead of the final votes. "That is why I support middle-class tax cuts, including the tax package now being considered in Congress."
But some analysts said the measure puts the federal budget in an even more precarious situation at a time when a record 422-billion-dollar deficit is predicted.
"Election politics obviously are trumping fiscal discipline," said Merrill Lynch economist David Rosenberg.
Robert Greenstein, economist at the Center for Budget and Policy Priorities, a think tank devoted to fiscal issues, called the legislation "an exercise in cynicism unusual even for Washington."
"Its 'middle-class' label cloaks several significant deficiencies," he said. "For example, the legislation benefits high-income households considerably more than the middle class, and even though the bill emerged out of dormant legislation designed to help low-income working families, the revised legislation treats these families unfavorably."
The Concord Coalition, an organization favoring balanced budgets, called the measure irresponsible because it does not offset lost revenues with spending cuts.
"It will be offset with higher debt. There is no free lunch," the group said in a statement.
The bill extends the so-called marriage penalty, aimed to ensure married couples do not pay more than if they were unmarried. It also extends the 1,000 dollar child credit for five years, and the reduced 10 percent brackets.
The provisions are among the most popular elements of the tax cuts signed into law by Bush. The measures were set to expire early in order to hold down the projected long-term impact of the tax-cut packages on federal revenues.
In a late maneuver, Republican negotiators added several business tax-break extensions to the package. The biggest extends a research-and-development tax credit expected to reduce revenues by around 7.6 billion dollars.
"The choice is between increasing taxes on millions of families and individuals next year or sparing them that tax increase," said Republican Senator Charles Grassley.
"I'm glad those of us who fought for tax relief -- the Republican-led Congress -- are prevailing. Taxpayers deserve it."
Stephanie Tubbs Jones, a Democrat, said she supported the measure as well because of he benefits to many families.
"It is important that we pass this bill because it targets middle-class, working families," she said. "My constituents in Cleveland, Ohio care about these provisions, and more and more Ohioans are in need of them as they experience tough economic times."