WASHINGTON (Reuters) - A $30 billion investment in information technology would create or save nearly 1 million U.S. jobs, according to an economic stimulus proposal released on Wednesday by a group backed by some tech companies.
The Information Technology and Innovation Foundation urged Congress to include tax credits and incentives for investments in broadband, healthcare and energy technologies as Democrats prepare a stimulus bill that could total $775 billion over two years.
“When we think about the downturn we are in, we need to be thinking more creatively,” said Rob Atkinson, president of the Information Technology and Innovation Foundation.
But public interest group Free Press blasted the proposal as a giveaway to big companies that already control the pipes that sell broadband services, including AT&T Inc (T.N), Verizon Communications Inc (VZ.N) and Comcast Corp (CMCSA.O).
“In practice this gives the public zero guarantee the money is being used for new investment,” Free Press communications director Craig Aaron wrote in the Huffington Post.
The group has its own $44 billion proposal, which includes tax credits, but also grants and a $10 billion bond proposal to spur investment. Under their plan, companies would have to apply to the Treasury department to claim the tax credits.
Consumer groups say the stimulus package should promote competition in Internet services. The U.S. now has an oligopoly of sorts, with most consumers having just two choices, either a big telephone or cable company.
The lack of competition is blamed for the U.S. trailing its industrialized counterparts on Internet speed and penetration and for the much steeper prices paid by consumers in the United States.
Technology companies and advocates are vying to grab a piece of the massive stimulus plan being drafted by Democratic lawmakers to stop the downward spiral of the American economy and rising unemployment.
Atkinson said he has informally advised president-elect Barack Obama’s campaign and transition team and is a former technology vice president at the Democratic party-affiliated Progressive Policy Institute.
The group’s new analysis suggested that a $10 billion government investment each in broadband, health IT and energy would create or retain an estimated 949,000 jobs in 2009. About half the jobs would come from investment in high-speed Internet networks.
The estimate includes indirect jobs that would be created in other industries benefiting from better digital infrastructure.
U.S. private employers shed 693,000 jobs in December, up sharply from the revised 476,000 lost in November and far more than economists had forecast, a private report released on Wednesday found. The Bureau of Labor Statistics will release data Friday on how many jobs were lost in December and whether the unemployment rate will top November’s 6.7 percent.
Congress aims to have a stimulus bill finished and ready for Obama’s signature by mid-February, U.S. House Speaker Nancy Pelosi said on Wednesday.
The Information Technology and Innovation Foundation’s plan includes a 20 percent tax credit for network investments at high speeds. Companies that receive the credit would be required to exceed 85 percent of 2008 spending levels to ensure they actually boost investment.
Editing by Andre Grenon