Obama travels to New Hampshire to push job-creation agenda

Reporting from Washington — 

President Obama, attempting to focus anew on a job-creating agenda, is promoting a plan to hand smaller, community-based banks $30 billion to spur lending to small businesses.

At a town hall-style appearance in Nashua, N.H., Tuesday, the president plans to tout the proposal outlined in his State of the Union address last week.

“Jobs will be our No. 1 focus in 2010,” the president said in excerpts of his speech released in advance of the event by the White House. “And we’re going to start where most new jobs do -- with small businesses.”

The president is advancing a plan to take $30 billion of the money that bailed-out banks have repaid to the federal government and send it to community banks for lending to small businesses. The president also proposes tax cuts for small businesses that hire new workers.

The seed money for loans is targeted for banks with assets of less than $10 billion which, according to the White House, provide the greatest share of lending to small businesses nationwide.

“These are the companies that begin in basements and garages when an entrepreneur takes a chance on his dream, or a worker decides it’s time she became her own boss,” the president said in his remarks. “Small businesses like this have created roughly 65% of all new jobs over the past decade and a half. And I think we should make it easier for them to open their doors, expand their operations, and hire more workers.”

For the president, this focus on job creation marks the start of a second year in office in a difficult economic and political environment. The fiscal 2011 federal budget that Obama proposed this week -- with a projected $1.27-trillion deficit -- anticipates a continuing high rate of unemployment for the next two years.

And with the seating of a new Republican senator from Massachusetts, the president’s party is losing its super-majority in the chamber this month, while heading into midterm congressional elections in November with a frustrated electorate offering the GOP the potential for gains in the Senate and House.

While continuing to press for alternative-energy development, educational initiatives and an overhaul of healthcare insurance, the White House also is seeking a new economic stimulus: proposing $100 billion in tax relief for investment in small businesses and tax breaks for businesses that create new jobs.

Obama is taking that plan on the road today.

“I’ve proposed a new tax credit for more than 1 million small businesses that hire new workers or raise wages -- and a tax incentive for all businesses to invest in new plants and equipment,” the president plans to say at his stop in New Hampshire, his third appearance in a pivotal swing state in as many weeks.

Last week, after the State of the Union address, he held a town hall-style session in Florida. The week before, he was in Ohio.

While the president promotes tax incentives for small businesses, his critics are pointing to his plans to repeal the tax cuts that former President George W. Bush won in 2001 and 2003 for households earning more than $250,000 a year. Republicans contend that this includes many of the small-business owners whom the White House maintains it is trying to help.

Under the president’s plan for a new Small Business Lending Fund, the government is to transfer $30 billion from the $750-billion Troubled Asset Relief Program that was created in late 2008 to rescue failing financial institutions -- money that bailed-out banks have repaid -- to community and smaller banks that lend to small businesses.

The fund is to support banks with assets of less than $10 billion. The White House says they account for more than 50% of all small-business loans nationwide. At the same time, these smaller banks would not be bound by restrictions that the government placed on the major financial institutions that benefited from the federal bailout.

Under the small-business lending program, banks with between $1 billion and $10 billion in assets would be eligible to receive up to 3% of their risk-weighted assets. They would be given added financial incentives for ensuring that they increase their lending to small businesses, using their 2009 loans as a benchmark.

mdsilva@tribune.com