The House approved by a 231-189 vote a bid by conservative Scott Garrett, R-N.J., to bar federal transportation funds from being used to make improvements on lands seized via eminent domain for private development.
"They're going to have to find their own money, instead of coming to Washington," Rep. James Sensenbrenner, chairman of the House Judiciary Committee, said after Thursday's vote.
In a 5-4 ruling last week, the Supreme Court said municipalities have broad power to bulldoze people's homes and put up shopping malls or other private development to generate tax revenue. The decision drew a scathing dissent from Justice Sandra Day O'Connor as favoring rich corporations.
Legislation in the works also would ban the use of federal funds for any project getting the go-ahead using the Kelo v. City of New London (Conn.) decision.
Susette Kelo, whose riverfront house in New London's Fort Trumbull neighborhood is set to be razed, said she's glad politicians in Washington are working against the decision.
"I think the people in this country are outraged in this decision, and rightly so," she said. "Everyone in this country has just lost the right to own their own property."
The grant program provides money to more than 1,000 municipalities for everything from lead abatement in old buildings to improving water and sewage facilities.
Sensenbrenner and the committee's top Democrat, Rep. John Conyers of Michigan, are drafting legislation that would prevent Washington from claiming eminent domain for economic development and block any state or local government from getting federal funds for projects
Sen. John Cornyn, R-Texas, introduced a similar bill on Monday, with a House companion introduced by Rep. Dennis Rehberg, R-Mont. The Supreme Court has overturned other congressional attempts to supersede its decisions.
House Democratic leader Nancy Pelosi of California says she is opposed to any legislation that would withhold federal dollars "for the enforcement of any decision of the Supreme Court, no matter how opposed I am to that decision."
At least eight states — Arkansas, Florida, Illinois, Kentucky, Maine, Montana, South Carolina and Washington — already forbid the use of eminent domain for economic development unless it is to eliminate blight. Other states either expressly allow private property to be taken for private economic purposes or have not spoken clearly to the question.