House OKs $15 billion jobs bill

House Speaker Nancy Pelosi (D-CA) departs after her weekly news conference on Capitol Hill in Washington, March 4, 2010.

WASHINGTON (Reuters) - Congressional Democrats made headway on Thursday on their top legislative priority -- job creation -- when the House of Representatives approved a $15 billion package of tax credits and highway construction.

The 217 to 201 vote gave Democrats a much-needed victory after weeks of delay caused by Republican tactics, a record-setting snowstorm and internal bickering.

More job-creation efforts are in the pipeline, House Speaker Nancy Pelosi said.

"Today's legislation is ... one key element of our agenda to get Americans back to work and strengthen our economy," Pelosi said on the House floor.

The Senate passed the bill last week. But that chamber will have to approve it again before President Barack Obama can sign it into law because the House modified it to satisfy the concerns of centrist Democrats and black lawmakers.

The Senate will probably take up the bill next week after it finishes work on a much larger jobs package, a Senate aide said.

After bruising fights over healthcare and global warming, Democrats hope to show voters they can bring down the 9.7 percent unemployment rate before the November congressional elections.

But they also face a growing backlash for the aggressive spending measures they have taken to fight the worst recession in 70 years.

MORE JOBS BILLS IN THE PIPELINE

Rather than passing another massive job-creation bill along the lines of last year's $863 stimulus package, Democratic leaders plan to advance a series of smaller job-creation bills to avoid public sticker shock and keep their job-creation efforts in the news.

The Senate is debating a $107 billion measure that would extend jobless aid, help states pay spiraling healthcare costs and renew a package of expired tax breaks.

After that, Democrats could take up legislation to boost lending to small businesses, create incentives to weatherize buildings, or give states more aid to help them avoid layoffs of teachers, police and other public employees.

The bill passed by the House includes a $13 billion payroll tax break for businesses that hire unemployed workers, along with subsidies for state and local construction bonds.

It also extends a highway-construction fund through the end of the year, despite concerns that some of the money is distributed unfairly among the states. Senate Majority Leader Harry Reid has promised to fix the funding formula in later legislation, said Transportation Committee Chairman James Oberstar.

The bill's costs, other than the highway fund, are offset by a crackdown on offshore tax shelters. The House also postponed a tax break covering business interest by one year to satisfy the concerns of centrist Blue Dog Democrats who said it would otherwise violate budget rules.

(Reporting by Andy Sullivan, editing by Philip Barbara)