WASHINGTON — President Obama presented a series of initiatives on Tuesday aimed at turning around the nation’s beleaguered job market, paying particular attention to increasing the hiring of small businesses by opening lines of credit and offering tax breaks to try to lower the double-digit unemployment rate.
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President Obama outlined his job-creation proposals in a speech at the Brookings Institution in Washington.
“Even though we have reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who’ve been swept up in the flood,” Mr. Obama said. “There are more than 7 million fewer Americans with jobs today than when this recession began. That’s a staggering figure and one that reflects not only the depths of the hole from which we must ascend, but also a continuing human tragedy.”
The president outlined his proposals in a speech at the Brookings Institution, a nonpartisan research group not far from the White House. It was the latest in a series of speeches intended to focus attention on what his administration has done to improve the economic outlook, as well as what it plans to do in 2010, a crucial midterm election year in which the economy will be a central issue.
In addition to proposing a tax cut for small businesses to encourage hiring, he called for eliminating capital gains on these businesses for one year and suggested that money left over from the financial bailout program, the Trouble Asset Relief Program, should be redirected toward small businesses. He also proposed investing new money in roads, bridges and other infrastructure improvements, and offering rebates to people who make their homes more energy efficient.
“Small business, infrastructure, clean energy: these are areas in which we can put Americans to work while putting our nation on a sturdier economic footing,” Mr. Obama said. “That foundation for sustained economic growth must be our continuing focus and our ultimate goal.”
The president’s proposals face Congressional approval, which presents a challenge considering the growing national deficit. Republicans argue that the president can not simply tap into the extra TARP money, which they say should be returned to the Treasury. They have vowed to fight a second economic stimulus plan, following last year’s $700 billion bailout program and this year’s $787 billion stimulus package.
The House was moving on a faster track, hoping to pass both the safety net provisions and stimulus measures this month, but Representative Steny H. Hoyer, the Maryland Democrat who is the House majority leader, said on Tuesday that the House will not have time for final votes until early next year. That puts it on a timetable with the Senate, which is consumed with debate on the health care bill and other must-pass measures like the debt limit, though Senate Democratic leaders are drafting a jobs package behind the scenes for action early next year.
The president called for using “selective approaches” to spending a portion of the remaining TARP money to spur job growth and opening frozen lines of credit to small- and medium-sized businesses. He said there was an “urgent need to accelerate job growth in the short term while laying a new foundation for lasting economic growth.”
“Of course, there is only so much government can do,” Mr. Obama said. “Job creation will ultimately depend on the real job creators: businesses across America. But government can help lay the groundwork on which the private sector can better generate jobs, growth and innovation.”
While the president did not offer a cost estimate of his proposals, he said it was “a false choice” to suggest that the government needed to pick between paying down the deficit and investing in job creation and economic growth. He pledged to cut the federal budget deficit in half by the end of his first term, but argued that making investments in new jobs would ultimately help reduce the deficit.
“These have been a tough two years, and there will no doubt be difficult months ahead,” Mr. Obama said. “But the storms of the past are receding. The skies are brightening.”
Mr. Obama blasted Republicans for criticizing his administration’s spending, saying that he inherited a $1.3 trillion deficit when he took office, largely because tax cuts and entitlement programs were not paid for during the last administration.
“These budget-busting tax cuts and spending programs were approved by many of the same people who are now waxing political about fiscal responsibility while opposing our efforts to reduce deficits by getting health care costs under control,” Mr. Obama said. “It’s a sight to see.”
The White House did not characterize the plan as a second economic stimulus program. Yet Republicans in Congress vowed to fight against additional spending.
“Using bailout funds for another spending spree would violate both current law and our pledge to return every dollar to the taxpayers,” said Senator Mitch McConnell of Kentucky, the Republican leader. “Americans’ patience is running awfully thin with politicians who promise jobs, but deliver only more debt.”
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