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Obama unveils proposals to address American fears
(Agencies)
Updated: 2010-01-28 19:17
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WASHINGTON: US President Barack Obama Wednesday unveiled a set of proposals in his first State of the Union speech to reassure Americans worried about jobs and the economy.
Obama's first State of Union address, which was watched by millions, focused overwhelmingly on confronting the nation's economic challenges.
NUMBER ONE FOCUS
Obama said his top priority is to tackle double-digit, 26 year high unemployment.
"After two years of recession, the economy is growing again. Retirement funds have started to gain back some of their value. Businesses are beginning to invest again, and slowly some are starting to hire again," said the president in the speech.
But he admitted that every success story, there are other stories. There were "men and women who wake up with the anguish of not knowing where their next paycheck will come from," he said.
"That is why jobs must be our number one focus in 2010, and that is why I am calling for a new jobs bill tonight," he stressed..
To help create more jobs, Obama unveiled a 30 billion dollar credit fund to help small business.
"Tonight, I'm proposing that we take 30 billion dollars of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat," Obama said in his address.
"I am also proposing a new small business tax credit - one that will go to over one million small businesses who hire new workers or raise wages," said the president.
He also vowed to eliminate all capital gains taxes on small business investment, provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.
PUSH FOR FINANCIAL REFORM
During his speech, Obama emphasized the need to rein in Wall Street's excesses and vowed he would continue financial reform to prevent a new crisis.
"I am not interested in punishing banks, I'm interested in protecting our economy," said Obama.
According to him, a strong, healthy financial market makes it possible for businesses to access credit and create new jobs.
"It channels the savings of families into investments that raise incomes," said the president. "But that can only happen if we guard against the same recklessness that nearly brought down our entire economy."
He also said the government would not allow financial institutions, including those that take deposits, to take risks that threaten the whole economy.
However, he nevertheless defended the bank bailout.
"If there's one thing that was unified Democrats and Republicans, it's that we all hated the bank bailout," he said. "I hated it. You hated it. It was about as popular as a root canal."
During the speech, the hawkish president also vowed he would veto any finance bill that does not contain "real reform."
"The House has already passed financial reform with many of these changes. And the lobbyists are already trying to kill it," he told lawmakers at the Capitol Hill.
"Well, we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back," he said.
THREE YEAR FREEZE ON DOMESTIC SPENDING
Obama also tried to balance the need to continue to boost the economy against his commitment to cut the record budget deficit, which soared to 1.4 trillion dollars in fiscal 2009.
During the speech, Obama said he will seek a three-year freeze on domestic spending that is not related to national security.
"Starting in 2011, we are prepared to freeze government spending for three years," said Obama.
"Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected," said the president. "But all other discretionary government programs will."
He promised his administration will continue to go through the budget line by line to eliminate programs that the country can't afford.
"Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't. And if I have to enforce this discipline by veto, I will," said Obama.
He said the government has already identified 20 billion dollars in savings for next year.
"To help working families, we will extend our middle-class tax cuts," he said, but adding that at a time of record deficits, the government will not continue tax cuts for oil companies, investment fund managers, and those making over 250,000 dollars a year.
However, many analysts believe the freeze carries only symbolic value for Obama because it affects only a fraction of the overall budget.
