Where Are the ‘Recovery Summer’ Stimulus Projects? (The New Republic)

Where Are the ‘Recovery Summer’ Stimulus Projects? (The New Republic)

Washington Post reported on a recent White House analysis of the American Recovery and Reinvestment Act. That assessment found “strikingly few claims of fraud or abuse,” according to the article. Well, good!

We’ve complained before that ARRA’s welcome emphasis on transparency tilts too much toward curbing this kind of waste and too little on establishing a clear, sensible focus on measuring outcomes, irrespective of the multiplier effects of speedy spending Jon Cohn points out. (Though, ironically, the report does not yet appear to be available on Recovery.gov.) But thanks to the ongoing oversight by the House’s Transportation and Infrastructure Committee, we are provided with clear and rich information on those projects in the committee’s jurisdiction along with a locational identifier for each. This data is reported by the states individually but kudos to the staff and committee leadership for pulling this together and making it available.

So what does it tell us? Our analysis shows that, just looking at the transportation agencies, 43 percent of all the projects and 67 percent of the spending occurs within the 100 largest metro areas, the geographic building blocks of America’s economy and society. While this may seem low given that these places are home to two-thirds of our population and generate 75 percent of our gross domestic product, it’s actually an increase from earlier this year when those figures where 41 and 59 percent, respectively.

A deeper look into the individual modal administrations (e.g., highways, transit, rail) tell a very different story, though not an unexpected one. The spending on transit projects, for example, is highly concentrated (86 percent) in the major metros while highway dollars (51 percent) are less so. Again, not too surprising given what we know about where transit is located, and how we’ve allocated roadway dollars in the past. But aviation is interesting: more than half the funding goes outside of the major metros despite the fact that 99 percent of all U.S. air passengers arrive or depart from one of the 100 largest metropolitan areas.

Also notable are the transportation recovery funds allocated through competitive processes, rather than formula block grants. For example, the so-called TIGER funds we’ve written about before closely track the economic concentration of the 100 largest metropolitan areas. The railroad money (aka the High Speed Rail grants) also veers heavily towards the largest metros though that may necessarily change somewhat as work connecting these places gets started (e.g., new signals, track sidings).

At least for the transportation projects, these data are starting to show the spatial difference between legacy programs and delivery mechanisms and the new fangled emphasis on empirics when it comes to choosing projects. So this emphasis on metropolitan areas is not a parochial grab for money. It’s about strategically investing where the economy is so American emerges from the rubble of the recession stronger than ever. That’s one of ARRA’s key lessons.

Robert Puentes
Senior Fellow, Brookings Metropolitan Policy Program
view bio

Obama Offers a Transit Plan to Create Jobs (The New York Times)

Obama Offers a Transit Plan to Create Jobs (The New York Times)

MILWAUKEE — President Obama, looking to stimulate a sluggish economy and create jobs, called Monday for Congress to approve major upgrades to the nation’s roads, rail lines and runways — part of a six-year plan that would cost tens of billions of dollars and create a government-run bank to finance innovative transportation projects.

With Democrats facing an increasingly bleak midterm election season, Mr. Obama used a speech at a union gathering on Labor Day, the traditional start of the campaign season, to outline his plan. It calls for a quick infusion of $50 billion in government spending that White House officials said could spur job growth as early as next year — if Congress approves.

That is a big if. Though transportation bills usually win bipartisan support, hasty passage of Mr. Obama’s plan seems unlikely, given that Congress has only a few weeks of work left before lawmakers return to their districts to campaign and that Republicans are showing little interest in giving Democrats any pre-election victories.

Central to the plan is the president’s call for an “infrastructure bank,” which would be run by the government but would pool tax dollars with private investment, the White House says. Mr. Obama embraced the idea as a senator; with unemployment still high despite an array of government efforts, the concept has lately been gaining traction in policy circles and on Capitol Hill.

Indeed, some leading proponents of such a bank — including Gov. Arnold Schwarzenegger, Republican of California; Gov. Ed Rendell, Democrat of Pennsylvania; and Michael R. Bloomberg, the independent mayor of New York — would like to see it finance a broader range of projects, including water and clean-energy projects. They say such a bank would spur innovation by allowing a panel of experts to approve projects on merit, rather than having lawmakers simply steer transportation money back home.

“It will change the way Washington spends your tax dollars,” Mr. Obama said here, “reforming the haphazard and patchwork way we fund and maintain our infrastructure to focus less on wasteful earmarks and outdated formulas, and more on competition and innovation that gives us the best bang for the buck.”

But the notion of a government-run bank — indeed, a government-run anything — is bound to prove contentious during an election year in which voters are furious over bank bailouts and over what many perceive as Mr. Obama pursuing a big government agenda. Even before the announcement Monday, Republicans were expressing caution.

“It’s important to keep in mind that increased spending — no matter the method of delivery — is not free,” said Representative Pat Tiberi, an Ohio Republican who is on a Ways and Means subcommittee that held hearings on the bank this year. He warned that “federally guaranteed borrowing and lending could place taxpayers on the hook should the proposed bank fail.”

The announcement comes after weeks of scrambling by a White House desperate to give a jolt to the lackluster recovery, and is part of a broader package of proposals that Mr. Obama intends to introduce on Wednesday during a speech in Cleveland. The transportation initiative would revise and extend legislation that has lapsed.

Specifically, the president wants to rebuild 150,000 miles of road, lay and maintain 4,000 miles of rail track, restore 150 miles of runways and advance a next-generation air-traffic control system.

The White House did not offer a price tag for the full measure or say how many jobs it would create. If Congress simply reauthorized the expired transportation bill and accounted for inflation, the new measure would cost about $350 billion over the next six years. But Mr. Obama wants to “frontload” the new bill with an additional $50 billion in initial investment to generate jobs, and vowed it would be “fully paid for.” The White House is proposing to offset the $50 billion by eliminating tax breaks and subsidies for the oil and gas industry.

After months of campaigning on the theme that the president’s $787 billion stimulus package was wasteful, Republicans sought Monday to tag the new plan with the stimulus label. The Republican National Committee called it “stimulus déjà vu,” and Representative Eric Cantor of Virginia, the House Republican whip, characterized it as “yet another government stimulus effort.”

But Governors Rendell and Schwarzenegger, and Mayor Bloomberg, who in 2008 founded a bipartisan coalition to promote transportation upgrades, praised Mr. Obama. And in policy circles, the plan, especially the call for the infrastructure bank, is generating serious debate.

“This is a very ripe policy question now,” said Robert Puentes, a senior fellow at the Brookings Institution’s Metropolitan Policy Program, who has been working for several years on blueprints for a bank.

On Capitol Hill, Representatives James L. Oberstar, Democrat of Minnesota and chairman of the House Transportation and Infrastructure Committee, has been developing his own bill, as has Representative Rosa DeLauro, Democrat of Connecticut.

Ms. DeLauro’s plan would create an infrastructure bank that would be part of the United States Treasury, where it would attract money from institutional investors, then channel the funds to projects selected by a panel. The program, which would make loans much like the World Bank, would finance projects with the potential to transform whole regions, or even the national economy, the way the interstate highway system and the first transcontinental railway once did.

The outside investors would expect a competitive return on their money, so many of the completed projects would have to charge fees, taxes or tolls. In an interview, Ms. DeLauro said she would be “looking at a broader base,” meaning the bank would finance not just roads and rails, but also telecommunications, water, drainage, green energy and other large-scale works.

But if the projects did not raise enough money, the Treasury might get stuck paying back the investors, a prospect that gave pause to so-called deficit hawks like Mr. Tiberi. In an e-mail last week, he said he agreed the nation’s road and communications networks needed to be improved but was concerned about creating another company like Fannie Mae that might need a bailout.

Inside the White House, the idea for a transportation initiative, and in particular an infrastructure bank, is one that the White House chief of staff, Rahm Emanuel, has been promoting. It was not included in the original $787 billion stimulus program because the administration and Congressional Democratic leaders wanted to pass that package as quickly as possible.

There is no shortage of projects in search of money. The problem, analysts say, is that Congress, which would create the bank, is not known for its ability to single out strategic priorities for growth. Instead, it traditionally builds broad support by giving a little something to everybody — Montana, for instance, would get a small amount of Amtrak money in return for its support for improvements along the Northeast corridor.

“We don’t prioritize,” Mr. Puentes said. “We take this kind of peanut butter approach of spreading investment dollars around very thinly, without targeting them.”

Samuel Staley, director of urban growth and land-use policy for the Reason Foundation, a libertarian research group, said the best way to spend money efficiently would be to establish the bank as a revolving loan fund so that money for new projects would not become available until money for previous projects had been repaid.

Mr. Staley expressed concern that in their zeal to spur growth and create jobs, Congress and the Obama administration would not impose such limits.

“With the $800 billion stimulus program, they were literally just dumping money into the economy,” he said. “There was little legitimate cost-benefit analysis.”

Sheryl Gay Stolberg reported from Milwaukee and Mary Williams Walsh from New York.

NCDOT: Stimulus-funded construction payroll jumps 131% (Triangle Business Journal)

NCDOT: Stimulus-funded construction payroll jumps 131% (Triangle Business Journal)

Transportation payroll funded by federal stimulus funds more than doubled in March, according to data compiled by the North Carolina Department of Transportation.

A total of $3.7 million in federal stimulus money was paid out to 4,740 workers in March. Those workers clocked 215,914 hours.

The payroll jumped 131 percent compared to February, when 2,887 workers earned $1.6 million for 119,843 hours of work.

The increases in March stopped a fourth-month decline in transportation stimulus payroll. NCDOT’s construction work typically slows down in the winter due to weather conditions before picking back up again in the spring.

Since stimulus jobs started in April of last year, $28.9 million in transportation construction payroll has been doled out to workers in North Carolina.

Friday, May 7, 2010
by Chris Baysden

Criteria Published for Second Round of TIGER Grants (AASHTO)

Criteria Published for Second Round of TIGER Grants (AASHTO)

Applicants for the Fiscal Year 2010 Transportation Investments Generating Economic Recovery grant program will need to show “long-term outcomes” and “job creation and economic stimulus” for any projects they are proposing, according to draft criteria released Monday by the U.S. Department of Transportation. Also to be considered are project innovation and jurisidictional and funding partnerships.

States and localities applying for $600 million in transportation infrastructure grants amd $40 million in grants from the U.S. Department of Housing & Urban Development must also show they they will fund at least 20% of the project’s costs. This is a change from the first round of TIGER grants, which required no state or local matching funds. The matching provision can be waived for rural reas, however. There will be $140 million set aside for rural projects from this $640 million combined grant program.

This year’s TIGER grant program is part of the Obama administration’s Partnership for Sustainable Communities, according to a notice in Monday’s Federal Register.

U.S. DOT awarded the first round of $1.5 billion in TIGER grants in February.

The 21-page notice is available at tinyurl.com/TIGER042610. Comments on the proposed grant criteria will be accepted through May 28.

US Senate lawmakers unveil long-awaited jobs bill (Reuters)

US Senate lawmakers unveil long-awaited jobs bill (Reuters)
Thu, Feb 11 2010
* Rare bipartisan support, but scope limited

* Action delayed by snowstorm, partisanship

* Business tax breaks, construction funds (New throughout with Obama, Reid)

By Andy Sullivan and Thomas Ferraro

WASHINGTON, Feb 11 (Reuters) – Democratic U.S. senators unveiled a limited jobs-creation bill on Thursday that relies on business tax breaks and construction projects to bring down a stubbornly high unemployment rate.

With a nervous eye on the November congressional elections, President Barack Obama and his Democratic allies on Capitol Hill have floated a wide range of job-creating proposals to help the economy recover from the deepest recession in 70 years.

But with their agenda frozen by partisan gridlock and a record-setting snowstorm, Senate Democrats opted for a relatively narrow $15 billion effort that they hope will win quick passage — rather than a more costly measure that could get stalled.

“We feel that the American people need a message. The message that they need is that we’re doing something about jobs,” Senate Majority Leader Harry Reid, in a tough campaign for re-election back home in Nevada, said after a meeting with fellow Democrats.

With no votes scheduled for Thursday and a weeklong recess looming, Senate floor action on the bill was put off until the week of Feb. 22.

Their supermajority gone after a surprise Republican victory in last month’s Massachusetts Senate race, Democrats now need at least one Republican vote to pass legislation.


The bill incorporate provisions crafted with the help of two Republicans on the tax-writing Finance Committee, Charles Grassley and Orrin Hatch.

The bill would also include tax credits to encourage businesses to buy new equipment, subsidies for state and local construction bonds, and money to shore up a highway-construction fund.

The bill’s $15 billion cost will be offset by closing unspecified tax loopholes, a Democratic aide said.

The Senate later will take up other proposals such as a tax break for research and development, Reid said.

“We don’t have a jobs bill, we have a jobs agenda. And we’re going to move forward on that jobs agenda,” Reid said.

Though Democrats want to show struggling voters that they are helping boost the economy, they also face a growing voter backlash for the hundreds of billions of dollars in deficit spending they approved last year to blunt the recession’s impact.

Thus the series of smaller bills could avoid the sticker shock that accompanied last year’s $787 billion stimulus package, as well as the $155 billion jobs package passed by the more liberal House of Representatives in December that emphasizes construction spending and direct aid to states.

Despite its relatively narrow scope, the bill could face resistance from both the left and the right.

Republican Senator Judd Gregg has said the construction money is wasteful and its actual $19.5 billion cost is hidden by accounting gimmicks. His staff released a memo on Wednesday suggesting that he could use budget rules to defeat the bill.

Meanwhile, many liberals question the effectiveness of Hatch’s tax credit for businesses that hire people who have been unemployed for at least 60 days.

That approach would cost between $56,000 and $125,000 in lost tax revenue for every full-time job created, according to the nonpartisan Congressional Budget Office.

(Editing by Philip Barbara and Jackie Frank)

Jobs Bill Likely to Be Delayed in Senate (Wall Street Journal)

Jobs Bill Likely to Be Delayed in Senate (Wall Street Journal)

WASHINGTON—U.S. Senate Republicans on Tuesday balked at Democratic efforts to push an economic stimulus measure through the chamber by the end of the week, making it likely that the Senate will wait at least until the week of Feb. 22 to vote on the roughly $80 billion package.

“It’s a cake that isn’t quite baked yet,” said Senate Minority Whip Jon Kyl (R., Ariz.), following a Senate nominations vote.

“Not enough of our members have had an opportunity to review it, for a consensus that would permit us to move forward on it that quickly,” he added.

Senate Majority Leader Harry Reid (D., Nev.), had announced earlier Tuesday that despite another snowstorm rolling through the Washington region, he hoped to bring the jobs-creation bill for a vote by the end of the week.

Both the Senate and the House are in recess the week of Feb. 15 due to the Presidents’ Day holiday.

Democratic leaders were still weighing procedural options late Tuesday. But with 15 senators absent from Tuesday’s vote because the weekend snowstorm impeded their travel, it didn’t appear that Democrats had the numbers to limit debate and push the bill to a vote without Republicans on their side.

Several Republicans are expected to ultimately support the measure, but senators indicated Tuesday they simply wanted more time.

“I don’t think that’s intellectually honest, and I think people back home would say to you that to respond to it that quickly is not good public policy,” said Sen. George Voinovich (R., Ohio).

A second storm is on its way up the Eastern Seaboard after a blizzard of historic proportions dumped up to two feet of snow on Washington over the weekend. The latest predictions are for another 10 to 20 inches of snow.

If the Senate is closed Wednesday, that would leave only two days for lawmakers to complete work on the jobs package. Given the partisan rancor that has left the Senate gridlocked, that is a very short amount of time for the Democratic majority to push through a major piece of legislation.

Mr. Reid said Tuesday the job-creation measure will include a one-year extension of the highway trust fund, a tax credit for employers that hire new workers, a separate tax break for small-business owners and an expansion of “Build America Bonds” that provide tax-friendly vehicles for state and local governments to raise funds for infrastructure investments.

The Senate bill is likely to expand the tax-credit bond program, which was created by last year’s economic stimulus legislation, so that municipalities could use them for school construction and clean-energy projects, according to a draft version of the bill that was circulating Tuesday.

Senate Minority Leader Mitch McConnell (R., Ky.) said that members of his party hadn’t seen the Democratic proposal, and that he wanted a chance to discuss it with them.

The bill is also expected to include a one-year extension of expired tax breaks for businesses, including the research tax credit, tax breaks for the film industry and the active financing exception for firms’ overseas profits, according to the draft.

Senators are also folding in provisions to partly offset the bill’s cost. Those include closing a loophole that could allow pulp and paper firms to claim a tax credit for cellulosic ethanol, anti-tax-evasion measures targeting offshore accounts, and a measure to allow some firms to delay payments to defined-benefit pension plans.

The Senate bill could also include a short-term patch to Medicare’s physician payment formula, which must be adjusted in order to avoid steep decreases in Medicare reimbursements to doctors. If the formula remains unchanged, the payment rate would drop by roughly 21% in March.

The length of time of that extension was one of the final details under discussion Tuesday, said people close to negotiations.

House Majority Leader Steny Hoyer (D., Md.) Tuesday said the House won’t hold any votes this week or next, and would return on Feb. 22.

Write to Martin Vaughan at martin.vaughan@dowjones.com, Patrick Yoest at patrick.yoest@dowjones.com and Corey Boles at corey.boles@dowjones.com

$520M puts fast trains on fast track (News and Observer)

$520M puts fast trains on fast track (News and Observer)

North Carolina is expected to receive $520 million today as part of $8 billion in federal economic stimulus funds President Barack Obama will distribute in 31 states to start building a national high-speed rail network.

The president touted high-speed rail in Wednesday night’s State of the Union Address, and he and other administration officials are fanning out across the nation today to announce the funding. Lisa Jackson, administrator of the U.S. Environmental Protection Agency, will come to Durham’s new Amtrak station to discuss North Carolina’s allotment in an event scheduled for 1:15 p.m.

U.S. Rep. David Price, a Chapel Hill Democrat, disclosed North Carolina’s funding share. “From Raleigh to Charlotte in the near term, and Raleigh to Washington in the long term, we’re in that charmed circle of routes where train travel can really make sense,” he said.

The state will use its share to add and upgrade tracks, trains and stations and to provide faster and more frequent rail service between Charlotte and Raleigh. The effort is part of a planned Southeast High-Speed Rail Corridor that will continue north from Raleigh to Richmond and Washington, D.C.

North Carolina and Virginia have planned the corridor since the early 1990s. North Carolina has spent about $5 million a year, working with railroads to straighten curves, add double tracks and increase train speeds – cutting an hour from travel between Raleigh and Charlotte.

Now, the state Department of Transportation will push a plan to cut that time by another hour. Train speeds are expected to reach 90 mph between Charlotte and Raleigh – and, eventually, 110 mph between Raleigh and Richmond.

Obama will be in Tampa, Fla, this morning to announce his plans for the $8 billion funds to support projects in 13 rail corridors across the nation. Florida, California and Midwestern and Northeastern states are expected to be among the big winners.

A down payment

North Carolina leaders hope the $520 million will be a down payment on their plan to build out the Southeast corridor. In all, the state last year asked the Obama administration for $5.3 billion – with most of that money, about $3.7 billion, earmarked for a new rail shortcut between Raleigh and Richmond. Virginia seeks about $1.7 billion for improvements between Richmond and Washington.

Much of the money will be spent to buy right of way, replace curved tracks with straighter tracks, build passing sidings or double tracks where there are single tracks now, improve stations or build new ones, and build bridges over roads to eliminate at-grade crossings. North Carolina’s proposal includes new rail stops in Lexington and Hillsborough, a new station in Charlotte and planning for a new Raleigh station.

In addition to $8 billion included in last year’s American Recovery and Reinvestment Act appropriation, Congress put another $2.5 billion for high-speed and intercity passenger rail projects in this year’s federal budget. North Carolina is expected to seek a share of that money in the next few months and to pursue more federal rail funding in coming years.

Eugene Conti, the state transportation secretary, declined to confirm North Carolina’s share of the money but promised to make good use of it. “We think whatever the number is is going to give us a good start on a program that’s going to pay many dividends over the years for our state and our country,” he said.

Price said North Carolina will have to make a good case for more rail funding.

“The best proof of the worth of that will be to make this Raleigh-to-Charlotte train a crackerjack run. Make these trains succeed,” Price said.

bruce.siceloff@newsobserver.com or 919-829-4527
Published Thu, Jan 28, 2010 02:00 AM
Modified Thu, Jan 28, 2010 05:32 AM

Foxx: Obama focus is jobs (Charlotte Observer)

Foxx: Obama focus is jobs (Charlotte Observer)

After Tuesday’s vote in Massachusetts, the Obama administration appeared to step up its emphasis on getting Americans back to work, Charlotte Mayor Anthony Foxx said this morning.

Foxx met with officials during the U.S. Conference of Mayors conference in Washington.

Voters in Massachusetts said concern over the economy and frustration with the president’s health care plan was a big reason behind Republican Scott Brown’s upset victory.

“My read of it is the work that’s been going on to improve the job picture hasn’t changed,” Foxx said, “but the focus of the comments and the dialogue that we were able to have with these officials, including the president, was very much focused on what most people in Charlotte and across the country are interested in, which is how we’re going to get people back to work.”

Foxx said he and other mayors urged the administration to funnel more stimulus dollars through cities. Now, he said, cities have 85 percent of the nation’s population but get just 20 percent of the stimulus dollars.

“The administration heard that loud and clear,” Foxx said. “That message has been repeated over and over again. When it gets directly to cities, we’re able to turn it out to communities a lot faster.”

On other subjects, Foxx said:

The administration will decide by Feb. 17 whether to award North Carolina $300 million in stimulus money to replace the Yadkin River bridge. The state is applying for the money through a competitive grant.

Federal policy may favor Charlotte’s acquisition of more money for rail transit. Transportation Secretary Ray LaHood told mayors that he’s looking for transportation projects that help both the environment and neighborhoods.

“The good news is Charlotte has been doing that for a while,” Foxx said. “(I got) a strong impression that Charlotte is viewed as a very successful system. And we are a leader among other cities in doing transit the right way. So we got very positive reinforcement.”

Asked about recent criticism by planner Michael Gallis that Charlotte’s transit plans lack a central hub, Foxx said it may be too late to change it.

“I take his critique of the system seriously,” Foxx said. “And I’m going to reach out to (to see) what if anything can be done. Frankly my strong impression is that we’ve passed the point of no return a long time ago.

“Practically I think the train may have left the station. No pun intended.”

By Jim Morrill
Posted: Friday, Jan. 22, 2010

Legislation would return interest earned to Highway Trust Fund (Journal of Commerce)

Legislation would return interest earned to Highway Trust Fund (Journal of Commerce)

The House is expected to vote this afternoon on a trio of intertwined measures that will extend the Department of Transportation’s highway program at current budget levels, puts the Highway Trust Fund on a firmer financial footing, and allocates nearly $49 billion for infrastructure projects.

The keystone of the three is the Jobs for Main Street Act of 2010 that was reported out of the House Appropriations Committee on Tuesday. The bill directs $75 billion in the Troubled Asset Relief Program to expand jobs programs in several departments.

The bill allocates $48.7 billion to DOT, including $27.5 billion for highway infrastructure, $8.4 billion for transit, $800 million for Amtrak, $500 million for airports, and $100 million for the Maritime Administration’s Title XI loan guarantee program.

The bill also will return $20 billion in HTF interest that was surrendered to the U.S. general fund in 1998 when Congress passed the highway bill known as TEA-21, said Jim Berard, press secretary for the House Transportation and Infrastructure Committee.

The bill also allows the trust fund to keep interest earned on revenue it collects. Berard said the combination of the repatriated interest, plus current fuel tax revenue and interest, should make HTF holdings some $53 billion by the end of fiscal 2010.

Last July, Congress approved a $7 billion HTF infusion from the general fund. At the time it was intended to keep the fund solvent; however, Berard said that according to the Federal Highway Administration, the HTF has enough to keep disbursing funds at current levels through July 2010.

The Senate is not expected to take up the jobs bill until after the New Year, so the House passed two related continuing resolutions to keep DOT highway spending at current levels. First the House passed a resolution that will extend the highway program through Dec. 23 to give the Senate time to vote on an appropriations bill for the Department of Defense.

The Defense bill includes a provision that will extend the highway program until February 2010 to give the Senate time to consider the jobs bill.

Contact R.G. Edmonson at bedmonson@joc.com.

Obama Focuses on Jobs, Infrastructure, Energy Rebates (Wall Street Journal)

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