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Obama Calls For Small Business Stimulus Package

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By Minara El-Rahman on December 09, 2009 12:15 PM

According to CNN, President Obama announced that he would like to drum up a small business stimulus package. He did so in a speech that he gave last Tuesday at the Brookings Institution.

He said such small business stimulus package would include new tax breaks to small businesses for new hires and for buying new equipment. CNN quotes President Obama as saying, "Even though we have reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who have been swept up in the flood. And it speaks to an urgent need to accelerate job growth in the short term while laying a new foundation for lasting economic growth."

President Obama also proposes to eliminate capital gains on small businesses for one year and recommended that any money left over from Trouble Asset Relief Program (TARP) should be funneled into building small businesses back up.

The New York Times quotes President Obama as saying: "Small business, infrastructure, clean energy: these are areas in which we can put Americans to work while putting our nation on a sturdier economic footing. That foundation for sustained economic growth must be our continuing focus and our ultimate goal."

President Obama wants to use remaining TARP funds in order to open up frozen lines of credit to small businesses. Previously, we discussed how the lines of financing a small business have been drying up. In response to that, all that lenders have had to offer recently to small businesses have been credit cards.

In the meantime, Republicans are not happy with President Obama's vow to help small businesses. They claim that President Obama is turning TARP into a slush fund.

Senator John Thune of South Dakota is quoted by the New York Times as saying, "It was the intent of the law when it passed that any funds that were paid back in should go back in the Treasury - should be used to pay down the debt. They shouldn't be recycled, re-spent, reused, allowing TARP to become what is essentially a political slush fund to be used for whatever the administration decides to use it for."

Republicans held a press conference where they promised to fight what they call a second stimulus for small businesses. The New York Times quotes Senator Mitch McConnell of Kentucky, the Republican leader: "Using bailout funds for another spending spree would violate both current law and our pledge to return every dollar to the taxpayers." 

It seems like there will be a fight in Congress in order to keep Main Street alive and thriving.

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