Obama eyes bank bailout funds to spur new jobs

<div><p>WASHINGTON (Reuters) - President Barack Obama will extend his push to revive the U.S. economy next week with a speech outlining job creation ideas, from encouraging home insulation programs to diverting funds meant to rescue failing banks, officials said on Friday.</p><p>With unemployment hovering around 10 percent, political pressure is building on Obama to do more to boost the economy after months of debate on overhauling the U.S. healthcare system and a months-long review of Afghan war strategy.</p><p>The White House has not given specifics of Obama's strategy but U.S. officials said his proposals included incentives to homeowners to make their homes more energy efficient, pushing banks to make more loans to small businesses and possibly tax cuts for companies that add more workers.</p><p>Obama hosted a job-creating forum on Thursday to gather ideas from corporate executives, small business owners and other experts. On Friday, he spoke in Allentown, Pennsylvania, a manufacturing city hit hard by economic changes.</p><p>"The president believed that he has seen and heard good ideas from his economic team and from discussions yesterday, and he'll outline some of what he supports moving forward on Tuesday," White House spokesman Robert Gibbs told reporters.</p><p>"I don't think it will be the totality of all that we're looking at, but I think that the president believes that we should and must do everything in our power to create an environment for job growth and job creation."</p><p>The speech, in Washington, is scheduled for Tuesday at 11:25 a.m. EST (1625 GMT).</p><p>Gibbs said Obama was likely to discuss using money from the government's Troubled Asset Relief Program (TARP) funds set aside to bail out crumbling financial institutions for highway construction, small business loans and other measures.</p><p>The administration has previously said it may steer TARP money to community banks to try to spur lending to small businesses in addition to its idea of using some of the funds to pay down debt.</p><p>The White House insists the program it has in mind is by no means another economic stimulus package akin to the $787 billion scheme Obama signed in February.</p><p>The administration will find it hard to spend further large sums to create jobs because it ran a staggering $1.4 trillion budget deficit in fiscal 2009 and is likely to have a similar shortfall in the current fiscal year ending Sept 30, 2010.</p><p>SERIES OF JOB EVENTS</p><p>"In the two years since this recession began, too many members of our American family have felt the gut punch of a pink slip," Obama said in his speech at Allentown.</p><p>Obama's fellow Democrats in Congress expect the economy to be the top issue in next year's election and acknowledge that unless it improves their own jobs may be at stake.</p><p>Republicans scoffed at Obama's job creation efforts.</p><p>House of Representatives Republican leader John Boehner said Democratic efforts to overhaul healthcare, reduce carbon emissions and make it easier for unions to organize would make it harder for businesses to hire.</p><p>"The job killing agenda that the president supports that's moving through the Congress has to be stopped," he said. "It scares employers to no end."</p><p>The employment picture grew a little less dire on Friday with a report that the jobless rate had dropped to 10 percent in November from 10.2 percent in October, but millions of Americans are still out of work and are feeling pessimistic.</p><p>(Additional reporting by Tom Ferraro in Washington and Alister Bull in Allentown, editing by David Storey)</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=64775423&bid=informcom" /></div><div id="copyright"><div>


Copyright 2009  <a href="http://www.reuters.com/finance">Reuters US Online Report Politics News</a></div></div>


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