In his first State of the Union address, the president pledges to spur lending to small businesses and eliminate the capital gains tax on small business investment.
Staring down a 10 percent national unemployment rate and his own plummeting approval ratings, President Barack Obama made big promises to small businesses during his first State of the Union address last night.
The president devoted a full two-thirds of his 71-minute speech to the economy, pledging to sign a new jobs bill and to create a new lending facility, funded with $30 billion, that will get community banks extending credit to small businesses again. (Where's the money coming from? Wall Street's repayment of what it borrowed to the Troubled Asset Relief Program.) All good news for entrepreneurs -- if, of course, the White House can corral a skittish Congress into delivering.
Addressing an audience that included First Lady Michelle Obama, members of both houses of Congress, diplomats, the Joint Chiefs of Staff, and the Supreme Court, Obama called for tax incentives for small business owners -- who do 60 percent of the hiring in America -- to bring on new employees and give raises to those they already employ.
"Now, the true engine of job creation in this country will always be America's businesses. But government can create the conditions necessary for businesses to expand and hire more workers," Obama said. "We should start where most new jobs do -- in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides its time she became her own boss."
To jump-start entrepreneurship, he proposed the elimination of capital gains taxes on small business investment. He also reiterated his plans to invest more in clean energy, which could juice funding -- and innovation -- in that sector. Thanks to last year's Recovery Act provisions, the solar industry grew by almost 40 percent in 2009, creating 18,000 jobs, the Environment News Service reported.
"We need to encourage American innovation," Obama said. "Last year we made the largest investment in basic research funding history -- an investment that could lead to the world's cheapest solar cells or treatment that kills cancer cells but leaves healthy ones untouched. And no area is more ripe for such innovation than energy." (When they enshrined a State of the Union in the Constitution, we can't imagine the Founding Fathers envisioned an audience at its feet, giving perhaps the biggest cheer of the night to the president's call for construction of more nuclear power plants.)
Obama also set a goal of doubling American exports over the next five years, which would support two million jobs. It could also help companies looking to tap new overseas markets.
The Republicans' post-address response focused on jobs, too.
Said Bob McDonnell, Virginia's newly-elected governor: "We must enact policies that promote entrepreneurship and innovation so America can better compete with the world. What government should not do is pile on more taxation, regulation, and litigation that kill jobs and hurt the middle class."
Inc. contributing editor COURTNEY RUBIN was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.