Baltimore: As latest figures showed that the US economy grew at a faster-than-expected 5.7 percent pace in the fourth quarter, President Barack Obama unveiled a $33 billion package of tax cuts to coax small businesses into hiring workers as he underscored his commitment to pushing job creation to the top of his agenda.
With public frustration over double-digit unemployment eroding his popularity, Obama has begun rolling out initiatives aimed at backing up his jobs pledge made in his economy-focused State of the Union Address earlier this week.
"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, Maryland.
The proposal, which must be passed by Congress, would allow small businesses to claim a 5,000-dollar 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 Wednesday in his State of the Union address.
The total cost of the proposal is $33 billion, according to the White House.
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.
"The economy is growing but job growth is lagging," Obama said.
He spoke after the release of data showing US gross domestic product expanded at a faster-than-expected 5.7 percent in the fourth quarter, a trend he hailed as a "stark improvement" compared to economic decline a year ago.
First Published: Saturday, January 30, 2010, 00:05