President Obama has outlined a proposal to tackle the current record high unemployment rates. In the wake of the nation being $12 trillion in debt and experiencing rising job losses (over 7 million so far), the President is facing pressure to turn things around.
According to government officials, the Wall Street firms are repaying their TARP borrowings at a faster pace than initially expected. This has led to a discussion in Washington as to what to do with the repayments. It seems that the President, along with leading House Democrats, wants to put those recovered funds towards a new jobs bill.
President Obama, at the Brookings Institution in Washington today, gave three proposals today in his speech addressing the recovery of the economy. He has primarily proposed a tax cut to small businesses that intend on hiring. In addition, he proposed eliminating capital gains taxes on these businesses for one year and suggested money left over from the Trouble Asset Relief Program should be used as loans to assist small businesses, citing that “there will no doubt be difficult months ahead”.
Important Areas for Growth
The President saw “small business, infrastructure, clean energy” as specific “areas in which we can put Americans to work while putting our nation on a sturdier economic footing”. The expected spending on infrastructure alone would be at least $75 billion. However, it is not a final plan yet, and this proposal will need to be approved by Congress before it can be implemented, which can be a challenge because of the current deficit. Furthermore, Republicans want the President to return the extra TARP money to the Treasury and not simply spend it on another program. They will go all out to prevent another stimulus package.
It should be noted that the president did not give too many specific numbers on how much would be spent. He made a pledge to cut the deficit in half by the end of his first term despite how large it may be now, even with continued spending. He stated that job growth is essential in achieving this.