WASHINGTON, May 23: The US House of Representatives passed a 350 billion dollar tax cut plan on Friday that was less than half the size of President George Bush’s original proposal, but backers said it was enough to boost the economy as well as the president’s re-election chances.

The House voted 231-200 for the plan, mostly along party lines. It lowers the top tax rate on dividends and capital gains to 15 per cent through 2008 and accelerates scheduled income tax cuts. It also provides tax breaks for businesses to encourage investment in new equipment and offers checks of up to 400 dollars per child to be issued in 2003.

Commerce Secretary Don Evans said the tax cut plan would help America’s jobless the most.

“It is a huge victory for the American people. It is a huge victory for those individuals who do not have a job and are looking for a job,” Evans told NBC’s “Today” show.

Republican backers who wanted a bigger package said the smaller plan would boost stock prices and create jobs.

House Majority Leader Tom DeLay, a Texas Republican, said before the House began debate on the measure that financial markets will “reflect confidence” in the plan. He called it “an excellent first start” and promised that the Republican-controlled House would approve even more tax cuts.

Democrats opposed the bill saying it benefited mostly the wealthy and added to the nation’s ballooning debt. After approving the tax cut, Congress will also be voting on a bill raising the $6.4 trillion debt limit by a record $984 billion.—Reuters