BOSTON -- A proposal to honor the late Sen. Edward M. Kennedy is sparking controversy and could end up receiving millions of federal dollars, Team 5 Investigates reported Thursday night.

The Edward M. Kennedy Institute for the United States Senate will be dedicated to research and education, but deep inside a defense appropriations bill is $20.2 million being quietly funneled toward the institute's construction.

The institute will be built along Dorchester Bay, right next to the John F. Kennedy Presidential Library. The institute will include a replica of the United States Senate floor and be a state of the art facility.

"It (federal funding) really amplifies the bad things that Congress is doing right now," said David Williams, Vice President of Policy for Citizens Against Government Waste.

Twenty percent of the institute's projected cost will come from tax dollars.

"I think in the long run you'll find economic benefit out of that in the Commonwealth of Massachusetts," Medford Mayor Michael McGlynn said, though his city is facing a $3 million deficit.

Watchdog groups say few permanent jobs will be created. "The federal government cannot afford this spending so that's why it needs to be eliminated immediately," said Williams.

So far, the institute has raised $40 million in private donations.

"Like similar projects at state universities across the country, we also anticipate some public funding to support the institute .... it will be an important part of the community of Boston," said Peter Meade, president of the institute.

Rep. Edward Markey, (D-Mass.), has been the institute's point man to secure federal dollars. "I think it's all together fitting and appropriate to do so," Markey said.

President Barack Obama has said he's going to take a hard look at the money being spent in the defense bill.

"Wouldn't it be better to spend this money to make sure that new jobs were created in your own district?" Kelley asked Markey.

"I fight very hard to ensure that the 7th congressional delegation receives more than its fair share of its federal dollars," Markey said.

The institute will be built on the UMASS Boston campus, a school with a $250 million endowment. Critics insist the university and private donations alone should fund this project.

"There is not a good public interest rationale for this project with such huge expenditure of public funds," said Dan Weeks from Americans for Campaign Reform.