WASHINGTON, July 28 (Xinhua) -- U.S. President Barack Obama is urging Congress to pass a bill that aims to boost credit to small businesses and spur job growth. Meanwhile, he is seeing his approval ratings nosedive.
|U.S. President Barack Obama speaks about the economy after meeting with|
small business owners at the Tastee Sub Shop in Edison, New Jersey July
28, 2010. (Xinhua/Reuters Photo)
Obama on Wednesday traveled to New Jersey to visit small business owners -- smaller companies account for a large chunk of the U.S. workforce -- in an effort to drum up support for the proposed legislation, which he is encouraging Congress to pass before the August recess.
The legislation provides 30 billion U.S. dollars to small banks to boost lending to small businesses. It also contains tax cuts and an exemption from capital gains taxes for small businesses that qualify.
The trip comes during a time of sinking presidential popularity, which is tied to the worst economy since the 1930s. That puts Obama under pressure to appear active on the jobs front in the run-up to the November elections, as many Americans believe the White House and Congress to be unmindful of voters' needs.
But the GOP could paint Obama's small business bill as a smaller version of last year's stimulus package. And if that happens, it could further hurt the president in the polls, said Steven Kull, director of the Program on International Policy Attitudes at the University of Maryland.
Indeed, many Americans view the 787 billion dollar stimulus package passed last year as a waste of taxpayer money -- although many economists said it rescued the economy from even further decline -- that ultimately did not create the jobs that many thought it would.
Americans are also concerned that the stimulus adds to the ballooning deficit, and many are wary of too much spending to jumpstart the economy.
On the other hand, if the bill is signed into law and unemployment starts to decrease, Obama can make it an example of how he is helping to revive the economy, which could help his ratings, Kull said.
And those could use a boost, as Obama saw his job approval numbers drop to around 47 percent in his sixth quarter in office -- his lowest quarterly rating to date and a continuation of a downward trend, according to Gallup.
Since Franklin Roosevelt, the average sixth quarter rating is 54 percent, putting Obama around seven points below. Jimmy Carter, Ronald Reagan and Bill Clinton also fell below the norm. Dwight Eisenhower, John Kennedy, Richard Nixon and both George Bushes saw their sixth quarter ratings rise above the average, Gallup found.
Prospects for a turnaround in Obama's numbers look grim, however, as most presidents saw a decline in their popularity during their seventh quarter, with the exception of the first George Bush, whose ratings were boosted after Iraq's invasion of Kuwait in 1990, Gallup found.
As for the bill itself, some analysts have cast doubt on its ability to have an impact on jobs in any significant way.
Aparna Mathur, resident scholar at the American Enterprise Institute, said lending to small businesses would have a positive effect under normal circumstances. But in this harsh economic climate, the bill misses the mark.
"It's not just access to credit right now, it's also demand in the economy," she said, "It's also the climate of uncertainty in terms of investment. And people are uncertain about the kind of taxes that they might be forced to pay in the future given the large size of the federal debt."
Slashing corporate taxes -- the United States pays the second highest corporate tax rate in the developed world, after Japan -- would do more to spur the economy than extending credit to small businesses and signal that the United States is friendly to investment, she said. It would also make the United States more competitive with the European economies, she added.
Other analysts noted that corporate tax cuts could drive more foreign direct investment, pointing out that such measures were taken by the Kennedy administration in 1962. This led to solid growth between that year and 1965, for example.
Barry Bosworth, a former presidential advisor and senior fellow at the Brookings Institution, however, said corporate tax reductions have the weakest impact. But the advantage of Obama's loan program is that it is temporary and most of the money will be paid back, he said.
Still, most small businesses are likely to oppose the plan, as they want something bigger, such as permanent tax breaks, Bosworth said.