NEW YORK (CNNMoney.com) -- Amid much fanfare at the White House, President Obama signed his first job creation bill Thursday.
The $17.6 billion measure calls for tax breaks for businesses and additional infrastructure spending with the hope of boosting employment.
This is the first jobs legislation to hit the president's desk since he trumpeted the need to spur hiring during January's State of the Union address. It took weeks to get the bill through Congress. However, it is viewed by some lawmakers, economists and business leaders as relatively small and ineffective.
The legislation will:
-- Exempt employers from Social Security payroll taxes on new hires who were unemployed.
-- Fund highway and transit programs through 2010.
-- Extend a tax break for business that spend money on capital investments, such as equipment purchases.
-- Expand the use of the Build America Bonds program, which helps states and municipalities fund capital construction projects.
The bill is a slimmed down version of an $85 billion bipartisan measure crafted by the Senate Finance Committee last month. Senate Majority Leader Harry Reid, D-Nev., stripped out these four measures and put them into a separate bill, saying he hoped lawmakers would approve it more quickly. It passed the Senate on Feb. 24.
However, it then had to go to the House, which added two provisions to pay for the infrastructure spending and corporate tax breaks. Its amendments require foreign financial institutions to give the Internal Revenue Service more information to help it catch tax cheats, and delays a tax break for foreign interest payments. The House sent it back to the Senate in early March.
Meanwhile, the House on Wednesday passed a bill that would extend the deadline to file for unemployment benefits by one month, through May 5, and several other expiring provisions through April 30.
The president and lawmakers have vowed to push measures that will spur job creation, as the economy continues to lose jobs and the unemployment rate stubbornly remains at 9.7%.
"It is the first of what I hope will be a series of jobs packages that help to continue to put people back to work all across America," Obama said after the bill's passage.
But the initiatives are having a tough time getting through Congress. Wednesday's jobs measure has been criticized as having little bang for the buck.
The centerpiece of the legislation is a hiring tax credit crafted by Senators Chuck Schumer, D-N.Y., and Orrin Hatch, R-Utah. The bill spares businesses from paying Social Security taxes on new hires who had been unemployed for at least 60 days. This tax, which comes to 6.2%, could save companies a maximum of $6,621.
Companies who retain these new employees for a year can claim an additional credit of the lesser of $1,000 or 6.2 percent of the wages paid to the employee in 2010. The measure's estimated cost is $13 billion over 10 years.
Some economists say the credit will prompt the hiring of 300,000 workers, while others say it will only help at the margin because companies won't hire unless they see an increase in demand, regardless of tax incentives.
Additional initiatives being considered include giving more tax breaks to companies and funneling more money to the states, which are contemplating big spending cuts to balance their budgets. Others, however, are concerned that these measures will only add to the sky-high federal deficit. Democrats countered that the legislation is fully paid for.
Meanwhile, the deadline to apply for extended unemployment benefits runs out in coming weeks. The House has to consider a roughly $140 billion bill that would push back the deadline until year end, extend a bevy of expired tax measures and send the states $25 billion to help fund its Medicaid obligations.
In the House, several jobs bills are forming, while Senate Democratic leaders say their next jobs initiative will be targeted at small businesses.
"This is just the first, certainly not the last, piece of legislation we will put forward," Schumer said.
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