President Obama proposed to use some $30 billion from theTARP bank bailout program and steer it into a lending fund for small businessesin hopes of sparking job creation.

The lending program, which the president unveiled in anappearance in New Hampshire, would be limited to banks with $10 billion or lessin assets, a sector that encompasses roughly 8,000 banks.

The program is part of a small-business program thepresident discussed in last week's State of the Union address. At that time, heannounced a $33 billion program to provide up to $500,000 in tax credits forbusinesses that add jobs or increase wages beyond the rate of inflation.

In the $3.8 trillion budget for 2011 which was proposedyesterday, the draft proposes to eliminate all capital gains taxes onsmall-business investment and raise the limit on Small Business Administrationloans from $2 million to $5 million.

"While the program announced today is a step in theright direction, it's important to remember that access to credit is not thelargest problem keeping small businesses from hiring. The No. 1 problem facingsmall business is lack of sales. Until consumers resume spending, smallbusiness owners will remain reluctant to start hiring," said SusanEckerly, senior vice president of the National Federation of IndependentBusiness.

 

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