WASHINGTON--The House yesterday approved President Bush's proposed cut in capital gains taxes, rejecting arguments of Democratic leaders that it would buy a windfall for the rich at the expense of a bigger budget deficit.

A nearly solid bloc of Republicans--only Doug Bereuter (R-Neb.) defected--was joined by 64 Democrats, chiefly from timber and farm areas in the 239-190 vote to redeem Bush's campaign promise to tax investment income at a lower rate than wages.

The tax reduction, said House Republican Leader Robert H. Michel of Illinois, "fits well with the economic and tax policies which have guided this nation through 82 record months of growth creating hundreds of thousands of new, productive and lasting jobs in our nation."

Majority Leader Richard Gephardt (D-Mo.) called the plan "a $25,000-a-year tax cut on average to 375,000 American families--the wealthiest families in America--for some decision they already made--not for something they might do in the future."

Rep. Marty Russo (D-III.) called it "outright, disgusting greed."

Bush said in a statement that he was "very pleased" with the bipartisan vote, saying it represents "a step forward for economic growth, new jobs and American competitiveness."

"A lower capital gains rate will reduce the cost of capital and create incentives for investment in the long-term productive capacity of American industry," he said.

The Joint Committee on Taxation estimates the proposal would cut taxes for 8 million couples and individuals, with 80 percent of the benefit going to those with total yearly incomes above $100,000. Those making less than $50,000 a year would get 5.6 percent of the benefit; those at that level who report capital gains would get cuts averaging $15 a year.

Restoring a lower tax rate for capital gains would reverse a major part of the 1986 tax overhaul, generally recognized as the biggest domestic achievement of the Reagan administration. That law cut tax rates across the board, but ended special treatment for capital gains and reduced or ended such deductions as state sales taxes and Individual Retirement Accounts.

Yesterday's vote rejected a Democratic leadership plan that would have junked the capital gains tax cut and sought to increase incentive for saving by expanding tax-deductible IRAs.

Republicans delighted in pointing out that the Democratic plan would have been financed by a tax increase--albeit on the nation's 600,000 wealthiest couples and individuals.

The capital gains issue will be fought again in the Senate.