President Barack Obama on Tuesday highlighted his new top domestic priority of curbing unemployment, unveiling a 30 billion-dollar loan program to help small businesses hire workers and reinvest in their companies.
Obama went to the northeastern state of New Hampshire to talk up the program, which he hopes will create thousands of jobs by freeing up capital via tax credits and community-based bank loans.
“Today one in ten Americans still can’t find work. That’s why jobs has to be our number one focus in 2010. And we’re going to start where most new jobs start — with small businesses,” Obama said.
The US leader noted that small enterprises have created roughly 65 percent of all new jobs over the past decade-and-a-half.
“These are the companies that begin in basements and garages when an entrepreneur takes a chance on his dream, or a worker decides it’s time she becomes her own boss,” Obama said.
“We need to make it easier for them to open their doors, to expand their operations, to hire more workers.”
The president’s proposed tax credit would affect more than one million small businesses that hire new workers or raise wages, while also providing tax incentives to enable businesses to invest in new plants and equipment.
The program also would eliminate capital gains taxes on small business investment, freeing up capital for hiring and reinvestment.
The funds for the loans are to come from money repaid by big Wall Street banks, and will be used to create a lending fund to be used by “community banks on Main Street,” according to Obama.
“It’s the small local banks that work most closely with small businesses.
They usually provide them their first loan and watch them grow through good times and bad,” the president said at a “town hall” forum in the city of Nashua.
“The more loans these smaller banks provide to credit worthy small businesses, the better deal we’ll give on them from this capital fund we’ve set up,” he said.
The White House said the money will be transferred from the 700 billion dollar Troubled Asset Relief Program, which was used to bail out failing banking, insurance and auto giants.
The program came under fire from Republicans in Congress.
“That proposal violates the law!” a red-faced Senator Judd Gregg of New Hampshire lectured Office of Management and Budget Director Peter Orszag, who testified at a US Senate budget committee on Obama’s 3.834-trillion-dollar
2011 budget.
“You should at least have the integrity to say that this will increase the deficit,” Gregg told Orszag.
Orszag said that Congress would need to first amend the law, but defended the measure as generating jobs.
The initiative comes with the US president newly focused on lowering America’s soaring 10 percent unemployment rate, after his previous domestic priority, healthcare reform, stalled.
Obama’s health care overhaul program was put on hold after Republicans last month seized a Senate seat in liberal Massachusetts, making it unlikely that ruling Democrats would have a sufficient number of votes to pass the plan.
The White House said in a statement that the new lending program, managed by the Small Business Administration, “will be targeted at community and smaller banks that lend the most to small businesses, and offer incentives for banks to increase small business lending.”
While the financial system has stabilized after near collapse in 2008, small businesses complain that access to credit remains tight, which has hampered job growth.
The president’s New Hampshire visit comes one day after he unveiled a 3.8 trillion dollar spending blueprint for fiscal year 2011, which begins October 1, that calls for an additional 100 billion dollars in spending to bring down unemployment and boost overall economic activity.
