Bush’s Tax-Cut Plan Defeated in House : Legislation: The 427-1 vote reflects Republicans’ objection to omission of spending trims. Democrats set to offer an alternative.

The House overwhelmingly defeated President Bush’s election-year tax-cut package Wednesday, paving the way for Democrats to push through their own alternative today--a plan that Bush has repeatedly threatened to veto.

The action came on a vote of 427 to 1, as Democrats, who opposed Bush’s tax-cut package largely on partisan grounds, were joined by 163 House Republicans, who objected because the measure sent to the floor did not include companion spending cuts that Bush had proposed.

The lone House member supporting the President’s package Wednesday was Rep. Bill Orton (D-Utah.).

Today the House is expected to reject a stripped-down version of Bush’s plan, crafted by House Republicans. The White House supports the measure, which was intended as a vehicle for speedy passage of the job-creation part of the President’s package. After that proposal is put to a vote, lawmakers will turn to the Democratic plan.

However, House strategists conceded Wednesday that the vote on the Democratic package is expected to be close, with many Democrats--fearful that their party’s alternative might increase the budget deficit and push interest rates up again--decidedly lukewarm about it.

Some 25 House Democrats already have said publicly that they will oppose the Democratic alternative, and an informal poll by the leadership Wednesday showed that another 50 or so are undecided.

Most analysts said that they still expect to see the Democratic package pass today, if only because the House Democratic leadership has gone so far out on a limb to promote the plan that it would suffer a serious embarrassment if the measure loses.

House leaders intensified their campaign Wednesday to rally more support for the Democratic alternative, appealing for party unity and suggesting to unenthusiastic lawmakers that the bill faces a veto anyway. Party strategists conceded that there are not enough Democratic votes to override. In that case, the tax-cut legislation simply would die.

That would fit in with what many perceive as the party’s strategy--to force Bush to veto the tax-reduction plan and then blame him for derailing it.

Meanwhile, Sen. Lloyd Bentsen (D-Tex.), chairman of the Senate Finance Committee, said that his panel will craft a tax bill next week similar to the House Democratic plan, although it probably will call for somewhat smaller tax reductions than the $80 billion the House would provide.

The expected partisan wrangling began early in the debate Wednesday as Democrats pushed through, on a 244-178 party-line vote, a procedural plan drafted by the leadership that prohibited any floor amendments to the bill.

Separately, House leaders denied allegations that they were playing politics with the tax-cut measure. “We are not engaged in some kind of charade here--we are engaged in a very serious effort,” House Speaker Thomas S. Foley (D-Wash.) said during a meeting with reporters.

In the floor-debate preceding the defeat of the Bush package, Republicans criticized the Democrats for holding Bush’s measure hostage and attacked the Democratic alternative as unlikely to stimulate the economy.

And Rep. Gerald B. H. Solomon of New York, ranking Republican on the House Rules Committee, warned that enactment of the Democratic alternative would doom the entire tax cut to oblivion. “What a waste!” he told the House.

Bush’s tax-cut plan, outlined during his State of the Union address on Jan. 28, would have provided for $33 billion in tax reductions for middle-income taxpayers over the next five years, with additional tax cuts to stimulate investment and help spur the housing market.

Besides increasing the personal exemption by $500-a-child, the package would have given first-time home buyers a tax credit of up to $5,000 over two years. It also would have allowed contributions of up to $2,500 a year in new tax-free savings accounts.

It also would have slashed the tax rate on capital gains--the profits from the sale of stocks or other assets--to 15.4% from the current 28%. And it would have provided faster write-offs for business spending on new plant and equipment and new tax breaks for real estate operators.

The Democratic alternative centers on a plan to provide middle-income taxpayers with a $200-a-person tax credit, financed by raising tax rates for high-income taxpayers and imposing a surtax on millionaires. Much of the rest of the plan follows Bush’s package.