President Obama Tuesday outlined measures that will "generate the greatest number of jobs" and stimulate the economy, including programs to aid small business, a new round of consumer rebates for energy-efficient products and services and additional infrastructure spending.
The plan, though short on details in some cases, includes three key areas—small business, infrastructure and clean energy—and comes just after the president convened a high-profile jobs summit in Washington, D.C.
Many of the initiatives are extensions of aspects of the stimulus plan, known as the American Recovery and Reinvestment Act.
In outlining the proposals, the president emphasized the administration position that some $200 billion in projected savings in the TARP program would be used for new spending programs as well as deficit reduction.
Prior to the speech, senior administration officials indicated that funds from TARP, which is set to expire at the end of this year, would not be used indiscriminately, a concern raised by both members of Congress and public interest groups.
"No one is talking about making new investments out of the TARP program itself," said one official. "What we are talking about is the fiscal room we have."
Though officials took great pains to steer clear of any further controversy about the use of any of the $700 billion in TARP funds, which under law are supposed to be returned to the Treasury, it was unclear how certain credit facilities would be continued past the program’s deadline.
The President himself said the "little-loved" TARP program would be wound down, but also said TARP savings "will allow us to pay down the deficit faster than was anticipated while also investing funds that would have gone to banks in job creating efforts instead."
Small business borrowing is one area that has been supported under TARP and is expected to get continued support one way or the other.
The small business component of the latest plan also includes new tax cuts and credits, some of which build on stimulus plan measures.
Administration officials said they had asked the Treasury to continue "all the efforts they have to support small business lending." The Treasury is now working on proposals, they said.
Specific measures under the plan outlined by the president include a zero capital gains rate, as well as enhanced tax expensing and depreciation provisions.
"These targeted measures are right and they are needed," the president said. Obama also emphasized that the administration's efforts were "shifting away from helping banks on Wall Street."
The second key category, infrastructure spending, would cover bridges, roads, rail and water. Officials earmarked spending at $50 billion above current levels. It would
The final area, clean energy, has both consumer and business components. It would include a new program of consumer rebates, much like the cash for clunkers program for cars earlier this year, to retrofit their houses and become more energy efficient.
The other effort would follow up up successful programs in the existing recovery act, helping to support renewable energy manufacturing—which would generate jobs, such as building components for wind turbines.
Clean tech and green jobs have been high on the president's list since the early days of his administration; some supporters would have the government make a more ambitious investment in the area, pairing it with major infrastructure projects. At its best, so the thinking goes, clean tech could rival the Internet revolution, creating high-quality jobs and vast profits.
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In some quarters, however, job creation of any sort would be welcome at this point. With more than 15 million people unemployed and the jobless rate above 10 percent, the administration is under pressure to show greater results than what has thus far been achieved under the stimulus plan.
One senior administration official Tuesday said the plan had resulted in 1.6 million jobs, but analysts have been skeptical about such estimates.
The latest monthly payrolls data showed a marginal decline in November, the first in almost two years, dating back to the official end of the previous economic expansion.
Some Obama constituencies are calling for a round of government-financed job creation. The AFL-CIO and others have out forth a plan to spend $40 billion to create one million jobs in the coming year, which would temporrarily compensate for what been unusually slow private sector job creation.