Page last updated at 17:35 GMT, Tuesday, 8 December 2009

President Barack Obama announces job creation plan

Obama outlines proposals for small businesses

US President Barack Obama has outlined a number of proposals aimed at boosting employment, including winding up the $700bn (£425bn) US bank bail-out fund.

Mr Obama said the remaining money from the Troubled Asset Relief Program (Tarp) could be used to facilitate lending to small businesses.

Speaking at the Brookings Institution think tank, he also called for tax cuts for small businesses.

However, there were few details on the scale or cost of the measures proposed.

The unemployment rate in the US currently stands at 10%.

The Tarp fund was set up in the last few weeks of the Bush administration as a bail-out package for US banks.

On Sunday, a Treasury Department official said the long-term cost of the package would be at least $200bn less than previously estimated.

Mr Obama acknowledged that it had been unpopular.

With regards to small businesses, he proposed a one-year elimination of capital gains tax on new investments, and adding a new tax cut to encourage small business hiring in 2010.

In the last few years, small businesses had created 65% of new job growth, he said.

'False choice'

"We avoided the depression many feared," Mr Obama said, before adding, "Our work is far from done."

He stressed that boosting jobs was the best way to tackle the massive US deficit.

"There are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. But this is a false choice," he said.

The president reiterated his commitment to halve the massive US deficit - which stood at $1.3 trillion when he took office - by the end of his first term.

Other measures put forward included more money for infrastructure projects and rebates to consumers who made their homes more energy-efficient.

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