The U.S. Senate has passed a scaled-down version of President Bush's proposed tax cut package. The measure was approved by a vote of 51-49. The House of Representatives has already approved a larger tax cut plan. Differences in the two measures must be reconciled before a final bill is sent to President Bush for his signature.

A tax cut measure aimed at stimulating the stagnant U.S. economy has been a top priority for President Bush. But the size of the package passed by the Senate, $350 billion over 10 years, is far smaller than what Mr. Bush had sought.

The House passed a $550 billion tax cut measure last week.

Republicans, including Senator Charles Grassley of Iowa, chairman of the Finance Committee, believe the tax cut plan will help jump-start the economy. "We happen to believe that if there is money in the pockets of 110-million taxpayers, and they spend it or invest it, it is going to do more economic good, it is going to turn over more times in the economy. It is going to respond to the free-market dynamics of our economy," he said.

But Democrats say the measure will cause the federal deficit to soar, and will benefit only the wealthy.

Senator Dick Durbin of Illinois said "Senator Grassley and the Republicans see the Bush tax plan as a way of helping the elite. We on the Democratic side believe it is far more important to make certain that what we do is fair and balanced, particularly when it comes to working families across this country who are struggling to get by."

Mr. Bush initially called for $726 billion in tax cuts in his State of the Union address in January. Opposition by Democrats and some moderate Republicans forced Congress to reduce the package.