To encourage small businesses to hire new workers, President Barack Obama unveiled a $33 billion package of tax cuts on Jan. 29.
Obama, who has made job creation the top priority of his administration, spoke as the White House got a rare economic boost when GDP data showed growth for the fourth quarter at a higher than expected 5.7%. "It is time to put America back to work. We have had two very tough years," Obama said, as he toured a small factory in Baltimore, Md..
The proposal, which must be passed by Congress, would allow small businesses to claim a $5,000 tax credit for every new employee they hire and to be reimbursed for Social Security retirement taxes on increased payrolls.
The firms will be allowed to claim the credit every quarter, so they do not have to wait until the end of the tax year to benefit from the plan, previewed by Obama on Jan. 27 in his State of the Union address.
Obama said the GDP growth estimate "affirms our progress and the swift and aggressive actions that made it possible," arguing that his economic policies have staved off the threat of a second Great Depression.
"Just to give you perspective there, that's the fastest economic growth in six years, and it's a stark improvement over the rapid and terrible decline that we were experiencing one year ago."
But Obama noted that although the economy was growing, a swift rise in job creation was lacking, meaning initiatives like the new hiring incentive were needed.
"Companies are recovering but not yet taking that next step and taking on somebody full time," Obama said after touring Chesapeake Machine Company, a custom manufacturing and metal factory.
Copyright Agence France-Presse, 2010
