Dec. 17 (Bloomberg) -- The U.S. House approved a $154 billion economic-aid package and a $290 billion increase in the legal limit on government borrowing as the chamber wrapped up its legislative business for the year.

The lawmakers voted 218-214 yesterday to raise the debt ceiling to $12.394 trillion, the fourth such increase in 18 months. Hours later, the House approved on a 217-212 vote the new spending for infrastructure projects, extended unemployment benefits and aid to state governments.

The chamber also passed a $636 billion defense budget bill yesterday. All three measures await Senate action.

While the debt and defense measures are likely to reach President Barack Obama’s desk by Christmas, the jobs plan faces opposition in the Senate, where lawmakers are wary of its effect on the government’s $1.4 trillion budget deficit.

House Democrats said the jobs measure would aid struggling families.

“We’re trying to bail out our people,” said Ways and Means Committee Chairman Charlie Rangel, a New York Democrat. “We’re trying to restore the hope and confidence they had, we’re trying to keep kids in school, we’re trying to put food on their table.”

Republicans scoffed at the plan. “This is nothing short of a taxpayer-funded Christmas shopping spree financed with money borrowed from the Chinese,” said Representative Jerry Lewis of California, the top Republican on the Appropriations Committee.

Obama Reaction

Obama praised the House action. In a statement last night, he said, “All over the country this holiday season, Americans who lost their jobs in the Great Recession are looking for work. Today the House answered with some productive ideas to respond to this great need.”

Close to 40 Democrats voted against the jobs bill, most of them “Blue Dogs,” a group of fiscally conservative lawmakers. One of them, Representative Michael Arcuri of New York, said he opposed the plan because it would add to the deficit. He also said he doubted the Senate “is going to do anything” with the House bill.

No Republicans supported the jobs bill.

House Speaker Nancy Pelosi, a California Democrat, lobbied colleagues on the bill’s behalf even after the vote began as she struggled to win its passage. Afterward, Representative James Clyburn of South Carolina, the Democrats’ chief vote-counter, said he hadn’t been sure the bill would pass.

Pelosi said at a news conference following the vote, “We had to take up the debt limit today, and having this bill following that was a heavy lift.”

TARP Funds

Democrats said about half of the cost of the economic package could be financed with money left over in the Treasury Department’s Troubled Asset Relief Program. Republicans, noting the bailout program has proven less expensive than initially forecast, said that plan would amount to tapping taxpayer dollars that otherwise wouldn’t have been spent.

The House also voted to extend a stopgap spending measure currently funding the Pentagon until Dec. 23 to give the Senate additional time to approve the Defense Department bill.

House Democrats had planned to include more job-related provisions in the defense bill because it is likely to be signed into law soon. They had to scale back their ambitions after being unable to work out an agreement with the Senate on what to include.

Stopgap Provisions

Instead, the defense bill includes stopgap provisions to ensure that unemployment benefits aren’t cut off over the holidays. It also postpones for two months a scheduled 21 percent cut in Medicare reimbursements to doctors. Expiring provisions of the USA Patriot Act, passed in the aftermath of the Sept. 11 attacks to strengthen the government’s powers to fight terrorism, would be extended through Feb. 28.

Democrats abandoned plans for a bigger debt-ceiling boost following conflicting demands among their rank and file over proposals to reduce the government’s budget deficit. The bill passed yesterday means Congress will have to vote again early next year to raise the debt ceiling.

Without the new increase, the Treasury Department would hit the current limit by Dec. 31, lawmakers said, which would force the government to default on its debts.

A number of Senate Democrats balked at a longer-term increase in the debt limit unless Congress agrees to create a special commission to recommend ways to reduce the deficit. Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, said lawmakers would end the impasse by February.

The defense bill, the last of the 12 annual appropriations bills, includes $128.3 billion for military operations in Iraq and Afghanistan. Lawmakers said it doesn’t include money to pay for Obama’s recently announced troop buildup in Afghanistan. That money will be sought later in an emergency spending bill.

Presidential Helicopter

In a victory for the administration, the bill doesn’t require the Pentagon to continue the Lockheed Martin VH-71 presidential helicopter, which the White House wants to terminate. In a win for Congress, the bill includes $465 million for a backup engine for the F-35 Joint Strike Fighter built by General Electric Co. and Rolls Royce Group Plc. The administration had threatened to veto the entire defense bill if it contained any money for the engine.

The bill includes $2.5 billion to buy 10 additional Boeing Co. C-17 transports. The Pentagon didn’t request any. Boeing also benefited from $1.5 billion for 18 F/A-E/F Super Hornet fighters, including nine above the administration’s request. The bill continues purchases of V-22 Osprey tiltrotor aircraft built by Textron Inc. and Boeing, providing $2.7 billion for 35 aircraft as the Pentagon requested.

To contact the reporter on this story: Brian Faler at bfaler@bloomberg.net

Last Updated: December 17, 2009 00:00 EST