This story incorrectly said that the economic stimulus package enacted last year included spending cuts. The package included new spending in addition to tax breaks.
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White House crafts jobs bill, a year into stimulus effort
The administration's push has gotten a mixed reception on Capitol Hill. House leaders have rejected the idea of using tax credits to create jobs and are particularly skeptical of the administration's proposal to do that, calling it difficult to administer and prone to abuse.
The House passed a $154 billion jobs bill in December, and Senate leaders are struggling to build support for a much smaller, $15 billion package, which is set for its first vote Monday. The centerpiece of the measure is a $13 billion tax credit, authored by Sens. Charles E. Schumer (D-N.Y.) and Orrin G. Hatch (R-Utah), that would exempt companies from paying Social Security taxes for the remainder of 2010 on every new worker who had been unemployed for at least 60 days.
The White House is walking a delicate line in its defense of the original stimulus act. To address concerns that the money has not been moving out the door fast enough, White House officials have pointed to the funds that were spent quickly, including those for tax relief, fiscal aid to states and an expanded social safety net.
But White House officials take a different line when countering opponents who question whether the package will have a lasting impact on the economy. Officials argue that plenty of punch is yet to come as money works its way through the pipeline for infrastructure, such as road construction, and other projects.
"We're just now starting to see the infrastructure kick in and lead to job creation," said David Wyss, chief economist at Standard & Poor's. " 'Shovel-ready' doesn't always mean shovel-ready."
This year, spending will shift to investments in infrastructure, energy-efficiency upgrades, broadband and other areas. It is this spending that has been slow to ramp up. Of the $226 billion that was put toward these investments, only $31 billion has been spent.
The result, officials say, is going to be a major surge in this spending in coming months. Although only $3 billion in investments was spent per month on average last year, officials expect that rate to more than double, to $7 billion per month, from now until June.
Of the $20 billion for health technology upgrades, only $1 billion has been allocated, and none has been spent. Most of the $4.5 billion for "smart grid" upgrades has been allocated, but none has been spent. Similarly, virtually none of the $8 billion for high-speed rail and $7.2 billion for broadband expansion has been spent, though the administration recently announced which areas would be getting the money.