In what may be seen as yet another measure to counter the effects of recession, President Barack Obama and state agencies have urged banks to lend money to small businesses.
In a statement, the Federal Reserve Board, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and other agencies told the banks that small business establishments were suffering because of a credit crunch and needed help.
The President sought the help of his own party representatives as well as Republicans to pass his plan to use $30 billion to bail out small businesses. He said such assistance would help generate fresh jobs. He also sought to give new tax credit to more than 1 million small businesses that engage new recruits or raise salaries of existing staff members.
The US Congress is about to consider another multi-billion-dollar bill aimed at creating jobs and reducing the country’s unemployment rates, which currently stands at 9.7 percent.
“I urge members of both parties: do not oppose good ideas just because it’s good politics to do so,” Obama said. “The proposals I’ve outlined are not Democratic or Republican; liberal or conservative.”
The statement from the regulators pointed out that loans to small businesses during the year ending last June dropped by 1.8 percent, or around $14 billion.
The new step comes after half-a-dozen other initiatives aimed at freeing credit, make available more loans and generating employment. But, Obama can only propose. To make them legal, Congress has to pass legislation. Already, he has faced opposition there.