US President Barack Obama on Tuesday called for a package of new spending measures to bring unemployment down from its highest levels in a generation, according to dpa. The initiatives amount to tens of billions of dollars in new spending and would have to be approved by Congress. They include an array of tax incentives for small businesses, new infrastructure investments and tax rebates for energy-efficient home improvements. In a speech at the Brookings Institution, a Washington think-tank, Obama said the cheaper cost of bailing out the banking industry had freed up resources to revive the economy, while still allowing the administration to cut into the country"s skyrocketing debt. The bail-out package approved in October 2008 had "served its purpose" by stabilizing the financial industry, costing about 200 billion dollars less than predicted. The total cost will likely be under 150 billion dollars as many banks have already paid back the emergency loans received at the height of the Wall Street crisis. "This gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street," Obama said. Obama did not say how much of those 200 billion dollars he wanted for the new jobs stimulus and how much would go towards reducing the federal deficit, which reached a record 1.4 trillion dollars in the 2009 fiscal year. A senior administration official said the infrastructure investments alone would amount to about 50 billion dollars. A proposal making its way through Congress suggests putting more than 20 billion dollars into the home-improvement programme, which has been dubbed "cash-for-caulkers." Obama also proposed eliminating the capital gains tax for small business over one year as well as a tax cut to encourage hiring. Obama"s fellow Democrats, facing pressure to restore jobs ahead of mid-term congressional elections in November, hope the new measures will encourage a substantial drop in the unemployment rate from its current 26-year high of 10 per cent. The new investments would come on top of the unprecedented 787- billion-dollar stimulus package approved in February. Obama said the original stimulus had already helped the economy recover from its deepest recession in decades, but more was needed. "Even though we have reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who have been swept up in the flood," Obama said.
