The measure passed 417-3, with Democrats casting the few negative votes. President Bush, who has been pressing for a stimulus package since hijacked airliners slammed into the World Trade Center and Pentagon Sept. 11, said he would sign the bill if it reaches his desk.
Allen Boyd of Florida, Gene Taylor of Mississippi and Charles Stenholm of Texas — cast the only dissenting votes.
"The package today is really the least we could do, but — — apparently it is the most that Democratic leaders will tolerate," said House Majority Leader Richard Armey, a Texas Republican.
The bill which extends unemployment benefits and includes business tax breaks supported by both Republicans and Democrats, has to go to the Senate, where Democrats and Republicans reacted favorably to it.
This time, Democrats said it appears likely the Senate will send the measure to President Bush.
"We've reached a tenuous consensus here," said House Minority Leader Dick Gephardt, D-Mo.
Senate Majority Leader Tom Daschle, D-S.D., called the GOP effort "long overdue and awfully late." He reserved judgment until all details are reviewed but added that the bill appeared to "deserve our support."
"We're pleased with the decision of the Republican leadership," Daschle told reporters.
House Speaker Dennis Hastert, R-Ill., bristled at the notion that the House GOP was to blame for the delay, arguing that it was the Senate that failed to act for months.
"We would not back down," Hastert told reporters. "We did not raise the white flag."
The vote came as Federal Reserve Chairman Alan Greenspan told the Senate Banking Committee the economy already is expanding faster than expected and that extending unemployment benefits is a "most reasonable approach."
Mr. Bush had been pushing for a broader economic stimulus since the Sept. 11 terror attacks exacerbated a downturn. He told a Hispanic business group Wednesday that Congress should act despite evidence that the economy is recovering.
"I think the economy has still got problems. ... I still think we ought to do more," Mr. Bush said. "There needs to be a stimulus bill."
White House press secretary Ari Fleischer said the president would sign the bill into law even though it is a scaled-back version of the original stimulus proposal.
"The president is concerned that we don't have a jobless recovery," Fleischer said. "It's a compromise. The president is saying today he will support a compromise."
The legislation, costing an estimated $94 billion over five years, would extend regular 26-week jobless benefits by 13 weeks and allow for additional automatic extensions in states with high unemployment rates. It would give businesses a three-year, 30 percent tax write-off for new investment and a more generous way to deduct losses.
It also creates a "Liberty Zone" in the lower Manhattan section of New York in which $5 billion in various tax breaks would be available to help the city recover from the attacks. In addition, the bill would extend a list of popular tax breaks that have expired or will do so this year.
Discarded were provisions from earlier versions that had drawn Democratic opposition, including accelerated income tax rate reductions, bigger tax breaks for corporations and a tax credit to help the jobless buy health insurance.
Democrats had been pressing Republicans to pass a simple unemployment benefits extension, pointing to the estimated 1.3 million people who have exhausted their regular 26 weeks of aid since Sept. 11. In January, there were about 7.9 million unemployed people in America.
The decision to go with a consensus approach came after House GOP leaders ran into criticism at a meeting of the rank and file, when some lawmakers questioned an earlier, tentative decision to vote on a bill combining a health care tax credit with an extension of jobless aid.
Several GOP aides, speaking on condition of anonymity, said lawmakers objected to continued delays on recession relief as the November elections draw closer.