How does President Obama's plan to increase hiring break down?
Naming job creation as his priority for 2010, President Barack Obama pitched his $30 billion loan program proposal Tuesday to help small businesses grow their companies through increased hiring.
In Nashua, New Hampshire, Obama said he hopes to take money repaid by Wall Street banks as part of the $700 billion bank bailout known as TARP to create the Small Business Lending Fund, which would provide capitol to community banks to spur economic growth on Main Street.
"These are the small, local banks that work most closely with our small businesses – that provide them their first loan, and watch them grow through good times and bad," he told a crowd of more than 1,500 at a Nashua North high school.
Citing a now-familiar statistic, Obama noted that small businesses have created roughly 65 percent of all new jobs over the past 15 years. The new loan program could, by loosening credit, help to create thousands of jobs, the president said. And jobs will be Washington's number one focus in 2010, Obama promised.
To encourage hiring, the president supports a tax credit that will encourage companies to hire workers, to pay competitive wages, and to expand facilities such as manufacturing plants. The administration also supports cutting the capital gains tax on small business investment.
Speaking in small-town New Hampshire, which has felt the economic pain of the deepest recession since the Great Depression, Obama stressed that the worst times are behind country. "Many good, hard-working people who met their responsibilities are now struggling because folks on Wall Street and in Washington didn't meet theirs," he said.
Obama bookended the speech by mentioning ARC Energy, a Nashua-based LED light manufacturer; the president toured the company's facilities earlier in the day, scoping out a machine that grows sapphire crystals. "The technology they've created is the only of its kind in the world," Obama said. "They're this little business in a condo out on Amherst Street, and they have the potential to revolutionize an industry."
The president's small business speech comes one day after announcing a $3.8 trillion fiscal blueprint for 2011. The budget calls for an additional $100 billion in spending to bring down unemployment and boost the economy. At the same time, Obama said he plans to reduce the federal deficit, to eliminate 120 government programs, and to cap spending over the next three years.
Already, the program has drawn criticism from restive members of Congress — a fact the president conceded in his speech. "Because there's no magic wand that will make economic problems that were years in the making disappear overnight, it's easy for politicians to exploit the anger and anguish folks are feeling right now," Obama said.
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CHRISTINE LAGORIO-CHAFKIN is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is senior writer at Inc. @Lagorio