Obama vows to create new jobs and lay foundation for robust growth

08:37, December 09, 2009      

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U.S. President Barack Obama outlined on Tuesday a new job-creating plan to tackle the country's major threat -- the double-digit unemployment.

Obama said at Brookings Institution, a Washington, D.C.-based think tank, that the proposals are set to "accelerate job growth and lay the foundation for robust economic growth."

Unemployment, currently standing at 10 percent, is a key concern of the Obama administration.

THREE KEY AREAS

Obama's new job plan addressed three key areas: helping small businesses add staff and grow; updating transportation infrastructure; and making homes 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," Obama said.

On helping small businesses, the president promised tax cuts to support additional business investment next year.

"Over the past fifteen years, small businesses have created roughly 65 percent of all new jobs in America," Obama said. "And, it's worth remembering, every once in a while a small business becomes a big business -- and changes the world."

"That's why it is so important that we help small business struggling to open, or stay open, during these difficult times," he added.

The government will extend enhanced expensing provisions for small businesses and Recovery Act bonus depreciation tax incentive. This provision will put more than 20 billion dollars in the hands of businesses in 2010, while enabling Treasury to recoup much of the funding as businesses regain their strength.

In order to support small businesses get easier lending, the president called to eliminate fees and increasing guarantees for small businesses that borrow through major SBA programs in 2010.

On investing in America's infrastructure, Obama called to add additional investment in highways, transit, rail, aviation and water.

He also vowed to support merit-based infrastructure investment that leverages federal dollars. The administration supports financing infrastructure investments in new ways, allowing projects to be selected on merit and leveraging money with a combination of grants and loans as was done through the Recovery Act's TIGER program.

On creating jobs through energy efficiency and clean energy investments, the new plan will provide new incentives for consumers who invest in energy efficient retrofits in their homes.

Obama called on Congress to consider a new program to provide rebates for consumers who make energy efficiency retrofits. Such a program will harness the power of the private sector to help drive consumers to make cost-saving investments in their homes.

AIMING AT FISCAL RESPONSIBILITY

As the U.S. government's fiscal deficit soared to record high, the Obama administration has been widely criticized. The president said that new steps to tackle the job problem are part of the government's approach to fiscal discipline. This includes freeing up resources from stabilizing Wall Street and putting them to work on Main Street.

The money which supports the new job-creating plan will come from the Troubled Asset Relief Program (TARP). The 700-billion-U.S.-dollar package, which was approved by the Congress in October 2008 to bail out the melting-down financial institutions, had turned out to be more than 200 billion dollars cheaper than expected, providing additional resources for job creation and for deficit reduction.

Obama said that "the assistance to banks, once thought to cost the taxpayers untold billions, is on track to actually reap billions in profit for the taxpaying public."

"This gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street," Obama said.

Since the Obama administration took over, only 7 billion dollars has been provided in assistance to banks, compared to 114 billion dollars in capital that banks subject to the "stress test" have raised from the private sector.

"Although additional resources are needed in the short-run to address the unemployment crisis, the administration is committed to doing what we need to bring the medium-term deficit under control -- and is exploring a range of steps to take as part of the fiscal year 2011 budget process," Obama said.

He reaffirmed that the government's resource is limited.

"Job creation will ultimately depend on the real job creators: businesses across America," he said. "But government can help lay the groundwork on which the private sector can better generate jobs, growth, and innovation."

Obama held a job summit in the White House last Thursday, aiming to seek new ideas for creating jobs to solve the tough unemployment problem.

Unemployment rate in November dropped 0.2 percentage points from October's 10.2 percent. The White House said that the labor market "is moving in the right direction" after the Labor Department released the data last Friday.

But some economists warned that the unemployment rate might continue to rise in the coming months.

Critics from the Republican said that using the TARP money to create jobs is not legitimate.

Source: Xinhua
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