House Agrees to Cut Capital Gains Tax, Soundly Defeating Democratic Proposal --- Vote, Key Victory for Bush, Increases the Likelihood Of Tax-Cut Law in 1989
WASHINGTON -- The House, in a stunning victory for President Bush, agreed to cut the tax on capital gains, soundly rejecting an alternative proposed by Democratic leaders.</br></br>After weeks of intense lobbying by both sides, the leadership's plan was defeated by a larger-than-expected 239-190 vote. The convincing margin increases the likelihood that a capital gains cut of some sort could become law this year.</br></br>The vote was a blow to the House's newly elected Democratic leadership, particularly Speaker Thomas Foley of Washington and Majority Leader Richard Gephardt of Missouri. Both had put their personal prestige on the line to defeat the tax-cut measure, which represented their first major showdown with the Bush administration.</br></br>Still, fully one-quarter of their membership -- 64 Democrats -- deserted them and sided with a near-solid phalanx of Republicans. Only one Republican, Doug Bereuter of Nebraska, broke ranks and voted, against the wishes of President Bush, for the Democratic alternative.</br></br>"This was a watershed for us," glowed House Republican Leader Robert Michel of Illinois.