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UPDATE 3-U.S. House approves $155 billion jobs bill

* Includes money for construction projects, aid to states

* Bank bailout fund would pay for $75 billion

* Follows on $787 billion stimulus bill

(Adds Obama comment, paragraphs 6-7)

By Andy Sullivan

WASHINGTON, Dec 16 (Reuters) - The U.S. House of Representatives on Wednesday narrowly approved a $155 billion measure that seeks to create jobs and blunt the impact of the worst recession since the 1930s.

By a vote of 217 to 212, the House approved additional spending for “shovel-ready” construction projects and money to avoid layoffs of teachers, police and other public employees. No Republicans voted for the bill, and 38 Democrats voted against it.

The Senate is expected to consider the measure early next year.

Leftover money from the government’s $700 billion bank-bailout fund would cover $75 billion of the bill’s price tag.

President Barack Obama and his fellow Democrats hope to bring down the 10 percent unemployment rate before the November 2010 congressional elections. Though the recession has eased its grip, the economy is still shedding jobs and voter anxiety remains high.

Obama applauded the House bill’s “productive ideas,” including highway repair projects, relief for the jobless and a brake on state and local layoffs.

“Some may think standing by and taking no action is the right approach, but for the millions of Americans still out of work, inaction is unacceptable,” Obama said in a statement.

The bill reprises many approaches taken in the $787 billion stimulus bill that Congress passed in February. Congressional budget analysts say that effort has created up to 1.6 million jobs and blunted the impact of the recession.

“We are on the road to recovery and we are there because this Congress made some very important and difficult decisions to take us there,” House Speaker Nancy Pelosi said.

Republicans, who deride the first stimulus bill as a costly boondoggle, said the newer effort would only drive the country deeper into debt.

“This is nothing short of a taxpayer-funded Christmas shopping tree financed by our friends, the Chinese,” said Representative Jerry Lewis, the top Republican on the House Appropriations Committee.


The bill would provide $48.3 billion for infrastructure projects that promise to get workers back on job sites by April. Highway construction projects would get $27.5 billion, while subway, bus and other transit systems would get $8.4 billion.

As in the earlier stimulus bill, steel and other products used in these projects would have to come from the United States.

The bill would also help cash-strapped state and local governments avoid layoffs of public employees.

States would get $23 billion to pay 250,000 teacher salaries and repair school buildings, and $1.2 billion to pay for 5,500 police officers.

States would also get $23.5 billion to help pay their share of federal healthcare programs for the poor.

The bill does not include two approaches backed by the White House: increased lending for small business, and funds to make buildings more energy-efficient, but Democrats say they plan to take up additional job-creating measures next year.

The bill also extends unemployment benefits and healthcare subsidies for the jobless for another six months, at a combined cost of $53.3 billion.

Because the Senate is not expected to act until January, the House included a two-month extension of the jobless benefits in a must-pass military spending bill that could be signed into law as soon as this weekend to ensure they do not run out at the end of the year. [N1676836] (Additional reporting by Ross Colvin and Deborah Zabarenko; Editing by Eric Walsh)