Obama urges action on small-business incentives

WASHINGTON - President Barack Obama urged Congress on Friday to act on measures to boost lending and give tax breaks to small businesses that he said will be the engine of U.S. job growth.

Even as the economy recovers from the worst recession since the 1930s, small businesses are finding it tough to get the credit they need to expand, Obama said.

He called for swift approval of initiatives that the administration says would spur more than $20 billion in new lending to small businesses, eliminate capital gains taxes on small business investments and provide tax breaks for startups.

"Government can't create private-sector jobs," the president said in remarks at the White House following a meeting with small-business owners. "But it can create the conditions for small businesses like these to grow and hire more people."

The U.S. economy has created almost 500,000 private-sector jobs in the first five months of this year, yet the U.S. unemployment rate is at 9.7 percent five months before the midterm congressional elections.

Small businesses account for about two of every three U.S. jobs, Obama said, and they were hit hard by the recession.

The president said he expects the House to pass the legislation he wants next week and called on the Senate to follow "as soon as possible." He also pitched his proposals, some of which he first outlined in his State of the Union address, during a meeting Thursday with Democratic and Republican congressional leaders.

"Even though we are in the process of digging ourselves out of this recession, we're still in a pretty deep hole," Obama said Friday. "We may be recovering, but we're not yet recovered. We have to keep moving forward."

- Bloomberg News