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Thursday, 04 February 2010 14:50 |
Financial Times (London)
January 28, 2010
The Financial Times
By Krishna Guha in Washington
January 28, 2010
www.ft.com
President Barack Obama said the US would set aside $30bn from the troubled asset relief programme to help community banks finance small business loans in his State of the Union address on Wednesday.
The idea is to ease access to credit for small companies that typically account for a large share of jobs growth but face difficulties accessing bank loans.
No details were immediately available but most experts believe that such a programme would have to be exempted from Tarp rules that put constraints on participating banks, such as executive pay, in order to be attractive.
Mr Obama sketched out plans for a fiscal two-step: one last boost for the economy in the fiscal year 2010 with a “jobs package”, followed by fiscal consolidation from 2011 onwards.
He urged Congress to adopt his proposal for a small business hiring tax credit, incentives for environmentally friendly home remodelling and further investment in infrastructure.
But he said the administration would adopt a freeze on non-security related discretionary spending for three years from 2011 and promised to use his veto power to enforce this.
Addressing liberals in his own party who oppose such a freeze, he said fiscal discipline was essential to avoid a rise in long-term interest rates that could derail recovery.
Mr Obama urged the Senate to adopt statutory pay-as-you-go rules and said he would create a bipartisan fiscal taskforce charged with coming up with specific proposals to fix public finances by a set deadline – likely to be after the November midterm elections.
The White House will announce its own budget proposals on Monday. The president defended the fiscal stimulus passed into law early last year, saying it had created 2m jobs already and was on track to create another 1.5m.
Mr Obama also made a surprise commitment to advance trade liberalisation, setting a target of doubling US exports and adding 2m export-related jobs over five years.
He said the US would push for a completion of the Doha trade round and signalled support for trade deals in Asia and for ratifying bilateral agreements with South Korea, Panama and Colombia.
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