President Obama proposed a new tax credit for businesses that hire unemployed veterans.

The tax credit expands upon an earlier program that provided tax breaks to businesses that hired disabled veterans. The new Returning Heroes Tax Credit would go to firms that hire unemployed veterans, with a maximum credit of $2,400 for every short-term unemployed hire and $4,800 for every long-term unemployed hire. In addition, the earlier Wounded Warriors Tax Credit would be expanded, increasing the existing tax credit for firms that hire veterans with service-connected disabilities who have been unemployed long-term (with a maximum credit of $9,600 per veteran) and continuing the existing credit for all other veterans with a service-connected disability (for a maximum credit of $4,800).

During a speech Friday, Obama described how one veteran, Nick Colgin, who saved the lives of a French soldier and 42 civilians on a flooded river in Afghanistan, was unable to get a job as a first-responder in the U.S. Another veteran, Maria Canales, handled financial work for her unit in Iraq and completed a degree in business management when she returned to the U.S., but couldn’t get an accounting or finance job at home.

“That isn’t right and it doesn’t make any sense, not for our veterans, not for the strength iof our country,” said Obama. “If you can save a life in Afghanistan, you can save a life in an ambulance in Wyoming. if you can oversee millions of dollars in assets in Iraq, you can help a business balance its books here at home.”

Obama also issued a challenge to the private sector to hire or train 100,000 unemployed veterans or their spouses by the end of 2013. It builds on an existing initiative championed by First Lady Michelle Obama and Jill Biden. He also proposed a “reverse boot camp” that would help provide training to enable more veterans to successfully transition to a civilian workforce.

The Department of Labor will also establish a new initiative to deliver an enhanced career development and job search service package to transitioning veterans at their local One-Stop Career Centers. The Office of Personnel Management will also create a “Best Practices” Manual for the private sector to help businesses identify and hire veterans.

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