From Sunlen Miller:
At a small business in Chesapeake, Maryland President Obama today said that the 5.7% jump in GDP last quarter “affirms” the progress in the economy.
“Today, we've stopped the flood of job losses. We've stabilized the financial system. And we can safely say that we've avoided that looming depression,” the president said of the GDP numbers, “we received a report that affirms our progress and the swift and aggressive actions that made it possible.”
In a better-than-expected report, the Bureau of Economic Analysis said today the nations’ Gross Domestic Product during the October to December period grew at an annualized rate that was 5.7% better than in Q3.This is significantly better than economist expectations and is the best quarterly GDP measurement since Q3 2003.
While noting that numbers like these don’t mean much to those that are still out of work, the president said that the “good news” is that the numbers equal economic growth – and businesses will soon start hiring again.
“That means businesses are going to start to see more customers and hopefully, even here in Chesapeake, you might start seeing enough orders that you start needing to hire that extra shift. That could make a big difference.”
Speaking at the Chesapeake Machine Company’s manufacturing plant – a small business employing 40 – the good GDP numbers wrapped in nicely into the president’s message of encouraging small businesses to add employees and expand their wages.
“The economy's growing, but job growth is lagging. Companies are recovering but not yet taking that next step and taking on somebody full time. And while businesses will always be engines of job creation in this country, government can create the conditions for those businesses to expand and hire more workers.”
Those conditions, as outlined in the president’s State of the Union address Wednesday propose a tax credit for small businesses.
A small business would get a tax credit of up to $5,000 for every employee they add in 2010, as well as a tax break for increases in salaries as well. Business would be reimbursed for the extra Social Security payroll taxes they would pay by increasing wages and hours for their workers.
The total amount of credit will be capped at $500,000 per firm, to ensure that the majority of the benefit goes to small businesses and start-up companies.
“This is a simple, easy-to-understand mechanism that will cut taxes for more than 1 million small businesses,” Obama said, “It'll give them an incentive to hire more people and a little bit of extra money to pay higher wages, to expand work hours or invest in their company.”
Touting support of this by economists “who rarely agree on anything,” Obama said that this would not only accelerate job growth in an cost-effective way, but it involves a provision to prevent people from gaming the system.
Noting some tax break proposals that have already been introduced on Capitol Hill – some by Republicans – the president said he is looking forward to working with them.
“I'm open to any good ideas from Democrats or Republicans. In fact, several members of Congress have proposed tax breaks for businesses similar to what I've proposed, and I'm looking forward to working with them.”
The small business proposal is just one of the job creation ideas that the president would like to see in a jobs bill he pitched heavily for in his speech to a joint session of Congress Wednesday evening.
Today the president called on Congress again to move forward with a jobs bill.
“The House of Representatives has passed a jobs bill that includes some of these proposals. I expect the Senate to do the same.”