Obama Lays Out Plan To Spur Jobs

President Obama said the country must spend its way out of the recession and create new incentives for hiring. The remarks came in an economic policy speech at the Brookings Institution.

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President Obama has announced a series of steps he wants the government to take to speed recovery in the market that matters the most to the most people: the job market. Mr. Obama said the millions of Americans who are out of work aren't looking for a handout, but they are looking to Washington to take their problems seriously, as NPR's Scott Horsley reports.

SCOTT HORSLEY: President Obama says the nation's economy is far better off than it was a year ago. The banking system has stabilized, outputs growing again and the national economy is no longer hemorrhaging hundreds of thousands of jobs every month. But unemployment still hovers around 10 percent and millions of Americans are looking for work. Speaking at a Washington think tank today, Mr. Obama briefly departed from his prepared text and talked about meeting with nervous job seekers in Pennsylvania.

President BARACK OBAMA: They're putting a brave face on it, confident that eventually things would work out, but you can also see the sense of anxiety, the fear that perhaps this time it was different. And sometimes it's hard to break out of the bubble here in Washington and remind ourselves that behind these statistics are people's lives, their capacity do right by their families.

HORSLEY: Mr. Obama endorsed several proposals aimed at helping to put people to work, including a tax break for small businesses that hire additional workers, rebates for homeowners who invest in energy efficiency and increased governments spending on highways, water systems and other public infrastructure. He also called for extending some of the provisions in the stimulus program enacted earlier this year. Still he said�

Pres. OBAMA: Job creation will ultimately depend on the real job creators: businesses across America.

HORSLEY: The president's jobs message today was more of an outline than a fully fleshed out proposal. Details of the tax break, for example, remain to be worked out with Congress. The White House refused to put even a ballpark price tag on the proposals. Dean Baker, of the Center for Economic and Policy Research, said while the ideas are good, he wonders if the president is going far enough.

Mr. DEAN BAKER (Co-director, Center for Economic and Policy Research): Are we talking a few billion or few tens of billions? It could easily be over 100 billion given the size of the shortfalls that they're facing. So, we are left sort of in the dark on that. I'm inclined to think it's not going to be all that much for the simple reason that I think he wants to get something through Congress quickly, and if we were to put a big price tag on it, he would face some real opposition.

HORSLEY: House Democratic Leader Steny Hoyer said today lawmakers are weighing between $75 billion and $150 billion in a new bill to boost jobs. The administration has been wary of spending too freely on jobs measures for fear of worsening the federal deficit. But Mr. Obama said the government can afford to do somewhat more because last year's unpopular bank bailout cost about $200 billion less than had been expected.

Pres. OBAMA: So 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.

HORSLEY: Republicans insist all unspent bailout funds should go to deficit reduction and not be re-purposed to help pay for jobs programs. In his speech today, Mr. Obama was unusually tough on Republicans. He said GOP lawmakers have been little help so far in efforts to mend the economy, and complained they have failed to take their share of responsibility for the recession.

Scott Horsley NPR News, the White House.

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Obama Says New Spending Necessary For Recovery

President Obama delivers a speech on the economy at the Brookings Institution in Washington, D.C. i i

President Obama proposed more money for infrastructure projects, tax cuts and credit access for small businesses during a speech on the economy at the Brookings Institution in Washington, D.C. Susan Walsh/AP hide caption

itoggle caption Susan Walsh/AP
President Obama delivers a speech on the economy at the Brookings Institution in Washington, D.C.

President Obama proposed more money for infrastructure projects, tax cuts and credit access for small businesses during a speech on the economy at the Brookings Institution in Washington, D.C.

Susan Walsh/AP

President Obama unveiled a new economic plan Tuesday that he said would cut taxes on small businesses, increase spending on infrastructure and offer new rebates to reward energy efficiency.

Speaking at the Brookings Institution in Washington, the president outlined the plan to be paid with $200 billion in unused funds from the Troubled Asset Relief Program, or TARP, financial rescue fund.

He sought to forestall objections from Republicans in Congress who have said the TARP savings should be redirected to reduce the deficit.

"There are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. But this is a false choice," he said.

Obama described the economic situation he inherited as "entirely dismal" and in danger of "rapidly plummeting toward a second Great Depression."

He said Republicans had stood on the sidelines as the White House and Democrats in Congress moved rapidly to address the problem. As a result, "we are in a very different place today than we were a year ago," the president said.

He said his administration was forced to make unpopular, but necessary decisions "to extend assistance to some of the same banks and financial institutions that had precipitated the crisis in the first place."

The president's latest initiatives would offer a one-year exemption for individuals on the capital-gains tax for new investments in small-business stock. The administration would also extend expensing provisions for small businesses and the acceleration of the rate at which they can deduct the cost of capital expenditures.

It would provide additional funds for a wide range of infrastructure projects on highways, transit, rail, aviation and water.

Finally, the plan would include a so-called Cash for Caulkers incentive program that would provide rebates for consumers who make energy-efficient retrofits on their homes.

"Given the challenge of accelerating the pace of hiring in the private sector, these targeted initiatives are right and they are needed," Obama said. "But with a fiscal crisis to match our economic crisis, we also must be prudent about how we fund it. So to help support these efforts, we’re going to wind down the Troubled Asset Relief Program, or TARP."

Although the president did not characterize his proposals as another stimulus program, GOP critics didn't mince words in saying they believe it will increase a federal deficit that is already at a record level.

House Minority Leader John Boehner (R-OH) issued a statement on Monday ahead of the speech, saying that if the president was going to propose more spending it would be "a giant step backwards."

Speaking on Tuesday, Boehner called Obama's plan "repulsive." He said that when TARP was formed, there was an understanding that all the money authorized probably would not be spent.

"Any money that wasn't spent was supposed to go toward the deficit," he said.

Rep. Jeb Hensarling (R-TX) called the initiative "further proof that TARP has morphed from an emergency injection of liquidity ... into a $700 billion slush fund to promote Democrats' political, social and economic agenda."

The White House has refused to attach a dollar figure to the president's ideas, saying that will be worked out with Congress.

The administration argues that the government can afford to spend more on jobs, because last year's bank bailout was less costly than expected. The administration has cited the $200 billion from unspent TARP authority to pay for the job creation programs while also paying down the nation's debt.

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