President Barack Obama's $825 bn (£584 bn) stimulus plan cleared its first major hurdle today, but failed to win bipartisan support.
The House of Representatives voted 244 to 188 in favour of the bill.
But despite heavy lobbying by the president in recent days, no Republicans backed the plan - a mix of tax cuts and spending projects. The plan will now go to the Senate for debate.
The vote was the first big political test of the Mr Obama's plan to revive the flatlined American economy. Although it passed the House vote, the lack of bipartisan support will come as a blow to the President.
Mr Obama has said he hopes to sign something into law by mid-February. The lack of Republican support will leave the president open to criticism if the package fails to pull the US economy out of recession.
In a bid to win round political opponents, Mr Obama spent most of yesterday in face-to-face meetings with Republicans, during which he pressed the case for the package - which consists of $550 bn (£389 bn) in spending and $275 bn (£195 bn) in tax cuts.
But despite his efforts, Republicans voted against the plan. They claim that it represents too much spending and not enough tax cuts
Speaking before the vote, the Republican minority leader in the House of Representatives John Boehner said: "The bill that is on the floor of the House, we don't think will work.
"Frankly we are disappointed in the product that we see - a lot of wasteful spending that will not create jobs. We think there is a better way."
An alternative Republican proposal was rejected in the House of Representatives by 266 to 170.
Earlier in the day, Mr Obama said "bold and swift" action on the economy was needed and vowed that his administration would be held accountable over spending.
Following a meeting with business leaders, Mr Obama said that he was "confident" that the economy could be turned around.
Mr Obama said: "It was a sober meeting, because these companies, and the workers they employ, are going through times more trying than any we have seen in a long, long while."
"And yet, even as we discussed the seriousness of this challenge, we left the meeting confident that we can still turn our economy around."
He added that everyone needed to "chip in" if the US is to rise out of its crisis and hit out at the "sense of irresponsibility" in Washington and Wall Street that had contributed to the economy's "perilous" state.
Mr Obama acknowledged that there was scepticism over the size and scale of this recovery plan.
But he added: "I understand that scepticism, which is why this recovery plan will include unprecedented measures that will allow the American people to hold my administration accountable.
"Instead of just throwing money at our problems, we'll try something new in Washington - we'll invest in what works."
Speaking after the vote, Mr Obama said: "Last year, America lost 2.6 million jobs. On Monday alone, we learned that some of our biggest employers plan to cut another 55,000. This is a wakeup call to Washington that the American people need us to act and act immediately.
"That is why I am grateful to the House of Representatives for moving the American Recovery and Reinvestment plan forward today.
"There are many numbers in this plan. It will double our capacity to generate renewable energy. It will lower the cost of health care by billions and improve its quality.
"It will modernise thousands of classrooms and send more kids to college. And it will put billions of dollars in immediate tax relief into the pockets of working families.
"But out of all these numbers, there is one that matters most to me: this recovery plan will save or create more than three million new jobs over the next few years.
"I can also promise that my administration will administer this recovery plan with a level of transparency and accountability never before seen in Washington.
"The plan now moves to the Senate, and I hope that we can continue to strengthen this plan before it gets to my desk.
"But what we can't do is drag our feet or allow the same partisan differences to get in our way. We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do."