WASHINGTON - A measure blending tax breaks for companies that hire unemployed workers with highway funding eagerly sought by states appeared headed for House passage today as Democrats worked to send President Barack Obama the first of several election-year jobs bills.

Some Democrats, especially those representing minority districts, feel the $35 billion proposal is too puny. However, the pressure is on to create jobs and deliver a badly needed win for Obama and a Democratic Party struggling in opinion polls and facing losses in upcoming elections.

But first, the House was expected to amend the measure to conform with so-called pay-as-you-go budget rules that have become an article of faith among moderate Democrats. The rules require future spending increases or tax cuts to be paid for with either cuts to other programs or equivalent tax increases.

The minor tweak would mean the notoriously balky Senate, which wrote the jobs bill, would have to act again before Obama could sign it into law.

At the same time, the Senate is debating a far more costly measure to clean up a lot of unfinished business from last year. The $100 billion-plus bill would extend unemployment assistance, revive a bevy of expired tax breaks, help states with soaring Medicaid costs and prevent doctors from having to absorb big cuts in Medicare payments. The popular initiatives are traditionally extended on a bipartisan basis for brief periods of time, which hides their long-term costs.

The Senate plans to act on the jobs bill after wrapping up the unfinished-business bill, which means it probably won't be sent to Obama until next week.

The jobs bill contains two major provisions. First, it would exempt businesses hiring the unemployed from the 6.2 percent Social Security payroll tax through December and give them an additional $1,000 credit if new workers stay on the job a full year. The Social Security trust fund would be reimbursed for the lost revenue.

Second, it would extend highway and mass transit programs through the end of the year and pump in $20 billion for the spring construction season. The money would make up for lower-than-expected gasoline tax revenues.

The $35 billion bill - blending $15 billion in tax cuts and subsidies for infrastructure bonds issued by local governments with the $20 billion in transportation money - is far smaller than the massive economic stimulus bill enacted a year ago.

But economists such as Mark Zandi of Moody's Economy.com say the new hiring tax credit could spur creation of about 250,000 new jobs. The economy has shed 8.4 million jobs since the recession began in December 2007.

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