Obama Focuses on Jobs, Infrastructure, Energy Rebates (Wall Street Journal)
‘Urgent Need’ to Boost Job Growth in Short-Term, President Says
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.
To help pay for the measures in a time of soaring budget deficits, Mr. Obama highlighted the federal government’s $700 billion financial-rescue fund — an emergency bailout program he described as flawed but necessary. He said TARP has served its purpose and that it’s time to end the controversial program.
“With a fiscal crisis to match our economic crisis, we also must be prudent about how we fund” these job measures, he said. “So to help support these efforts, we’re going to wind down the Troubled Asset Relief Program, or TARP — the fund created to stabilize the financial system so banks would lend again.”
The White House is considering using some TARP funds to pay for some of its job-creation ideas. At the same time, it says TARP losses are smaller than expected, which will also help pay down the deficit faster than the administration initially thought.
“These have been a tough two years. And there will no doubt be difficult months ahead,” said the president. “But the storms of the past are receding.”
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 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.
—Corey Boles contributed to this article.
Write to Maya Jackson Randall at Maya.Jackson-Randall@dowjones.com
DECEMBER 8, 2009, 1:21 P.M. ET
By MAYA JACKSON RANDALL
