DECEMBER 8, 2009, 12:13 P.M. ET Obama Focuses on Jobs, Infrastructure, Energy
WASHINGTON -- President Barack Obama proposed small business tax cuts, home retrofits and infrastructure investment as ways to accelerate job growth Tuesday, saying more programs are needed to boost the weak labor market and ensure the recovery takes hold for Main Street.
In a major speech at the Brookings Institution, Mr. Obama said he also wants to extend fiscal stimulus programs that would provide unemployment insurance for out-of-work Americans and help laid-off workers keep their health insurance.
Additionally, the White House wants to provide $250 payments to seniors and veterans and act on measures that could help local governments keep teachers and police officers employed.
Pointing to better-than-expected job market data last week, the president said the economy is on the right track. But more steps are needed to make sure that job growth matches up with economic growth, he said.
"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 have been swept up in the flood," he said. "There are more than seven million fewer Americans with jobs today than when this recession began. And it speaks to an urgent need to accelerate job growth in the short term while laying a new foundation for lasting economic growth."
The president's speech comes just days after holding a jobs summit at the White House where chief executives and nonprofit groups offered up solutions to the nation's unemployment challenges.
Tax cuts are a key part of Mr. Obama's plans, primarily those aimed at small business. The White House, for instance, announced plans to work with Congress to create a short-term tax incentive to encourage small business hiring.
The president also proposed a one-year elimination of the tax on capital gains from new investments in small business stock. The American Recovery and Reinvestment Act of 2009 -- the fiscal stimulus program Congress passed earlier this year -- had allowed a 75% exclusion from capital gains taxes on small business investments.
Other proposals include:
An extension through 2010 of stimulus provisions that allow small businesses to immediately expense up to $250,000 of qualified investment.
An extension of fiscal stimulus policies that accelerate the rate at which business can deduct the cost of capital expenditures. The White House says that provision will put more than $20 billion in the hands of businesses in 2010, while enabling the Treasury to recoup much of the funding as businesses regain their strength.
Eliminating fees and increasing guarantees for small businesses that borrow through Small Business Administration programs next year.
The White House is also mulling ways to use the Troubled Asset Relief Program for new legislation to create jobs and revive lending for small businesses.
Key Republicans argue that reusing funds from the $700 billion financial-rescue fund is illegal, and White House spokesman Robert Gibbs said Tuesday morning there is "fairly strict law" as to how TARP can and can't be used.
Still, the White House says there may be ways to tap into TARP to boost the weak labor market while also staying consistent with the original goals of the bailout. Other proposals that don't fall in line with TARP's objectives will be paid differently, Mr. Gibbs told reporters.
The Obama administration has said it now estimates that the long-term cost of TARP will be more than $200 billion less than the administration had presumed just months ago. That's largely because large banks are paying back substantial amounts of TARP funds.
"Since the Obama administration has taken office, only $7 billion has been provided in assistance to banks, compared to $114 billion in capital that banks subject to the "stress test" have raised from the private sector," the White House said in background documents Tuesday. "These savings will allow us to pay down the deficit faster than was anticipated while also investing funds that would have gone to banks in job creating efforts instead."