By Joseph J. Schatz, CQ Staff

The Obama transition team released a report Saturday defending the president-elect’s emerging stimulus plan against criticism that its tax cut provisions will not do enough to promote job creation.

The report estimates that by the fourth quarter of 2010, the stimulus plan would result in 3.7 million more jobs than there would be without the plan. It estimates that two of the plan’s tax cut components — Obama’s “Making Work Pay” tax cut and business tax incentives — would account for nearly 1 million of those jobs.

It argues that the jobs fostered by stimulus spending would mostly be created in 2010 and 2011 due to the time needed to get projects running, an acknowledgement that even “shovel-ready” projects take time.

The report assumes a package totaling $775 billion — Obama’s favored figure for the stimulus package, though top Democrats say it could end up somewhere between that figure and $1 trillion. It also assumes that the package will include individual tax relief, including a $1,000 payroll tax credit promoted by Obama on the campaign trail; business tax incentives; state fiscal aid; “substantial” spending on infrastructure, health and energy; and funding for food stamps and unemployment insurance.

In particular, Senate Democrats have raised questions about some of Obama’s proposed business-focused tax cuts, arguing that their job creation potential is shaky.

The report states that the entitlement programs and business tax incentives would create jobs quickly, and that “state fiscal relief and broad-based tax cuts fall in between: funds for these programs can be disbursed quickly, but there can be a delay before the main response of spending.”

“Certain industries, such as construction and manufacturing, are likely to experience particularly strong job growth under a recovery package that includes an emphasis on infrastructure, energy, and school repair,” the report states. “But, the more general stimulative measures, such as a middle class tax cut and fiscal relief to the states, as well as the feedback effects of greater employment in key industries, mean that jobs are likely to be created in all sectors of the economy.”

The report’s authors — Obama adviser Christina Romer and Jared Bernstein, an economic adviser to Vice President-elect Joseph Biden — acknowledge uncertainties about the impact of the package on Gross Domestic Product and the relationship between creating jobs and a higher GDP.