House Democrats abandoned their pay-as-you-go budget rules on Wednesday to shield millions from the Alternative Minimum Tax (AMT) at a cost of $51 billion.

The move came after a long standoff with the Senate — which had earlier approved a “clean,” one-year AMT patch — and over the opposition of many centrist Democrats who balked at adding to the deficit to pay for the relief. The legislation passed 352 to 64.

House Speaker Nancy Pelosi (D-Calif.), Majority Leader Steny Hoyer (D-Md.) and Rep. Rahm Emanuel (D-Ill.), the Democratic caucus chairman, joined Blue Dogs and some prominent liberal members, including Rep. George Miller (D-Calif.) and Rep. Henry Waxman (D-Calif.), in voting against the bill.

President Bush is expected to sign the legislation, which will prevent as many as 23 million taxpayers from being hit by the AMT next year.

Democrats delayed passing the patch for weeks as they wrestled with whether to suspend their budget rules in the face of stiff GOP opposition to attaching tax increases to the relief. Republicans ultimately forced them to waive the rules, lest they allow a tax increase to hit millions of unsuspecting families.

“We have little choice,” Rep. Richard Neal (D-Mass.), who sits on the Ways and Means panel, lamented from the House floor.

House Democrats capitulated to Republicans after passing two AMT patches fully paid for with various tax increases, which Republicans uniformly opposed. Both bills targeted the hedge fund industry with tax hikes.

Democrats accused Republicans of protecting wealthy hedge fund managers from tax increases at the expense of future generations of taxpayers who they said would be saddled with higher interest payments due to the cost of the AMT relief.

Republicans retorted that Democrats’ pay-as-you-go rules were a sham to increase taxes because they did not apply them when it comes to boosting spending. 

 They also charged Democrats with creating a tax-filing mess because of their delay in enacting a patch.

“Next year, when taxpayers — eager to use their refund check to pay down their credit cards or pay other bills — find that they are waiting months longer than usual, it will be House Democrats’ fault,” said Rep. Jim Mc-
Crery (R-La.), the Ways and Means ranking member.

Democratic leaders exploited procedural tactics to circumvent a rebellion by Blue Dog Democrats, who threatened to derail debate on the tax measure.

House leaders first planned on Wednesday to bring the tax bill to the floor under a closed rule governing floor proceedings. But Blue Dog leaders informed Pelosi that their coalition would vote against the rule for debate to protest a decision to waive House budget rules.

That meant Democratic leaders would have had to rely on Republican support on what is usually a party-line vote to bring the tax bill to a vote, making them vulnerable to a political ambush and embarrassment.

In the end, Democratic leaders avoided a fraught procedural vote by placing AMT tax relief on the suspension calendar. This maneuver allowed the Democratic leadership to suspend budget rules without a vote. The catch was that two-thirds of the House had to vote for the patch for it to pass.

But Democratic leaders knew that while Republicans might bring AMT relief down on a procedural vote, they would never vote against the tax-cutting measure itself.

Senate Finance Chairman Max Baucus (D-Mont.) praised the House’s action on the bill.  “I would have preferred to offset the cost of AMT relief, but moving ahead to protect taxpayers even at some cost was the right thing to do,” he said in a statement.