President Barack Obama will speak Tuesday on his plans to put Americans back to work amid a double-digit jobless rate, a political poison pill that threatens to diminish or even reverse Democratic congressional majorities in elections next year.
Heading into Tuesday's speech, Mr. Obama suggested he might turn to unspent money in the massive federal bailout program to fund job growth. He is expected to focus on three main areas: helping small businesses add staff and grow; updating transportation infrastructure; and making homes energy-efficient, according to an administration official who discussed the speech on the condition of anonymity.
Turning the highly unpopular financial rescue program, known as the Troubled Asset Relief Program (TARP), into a potentially popular one that creates new jobs has strong political appeal for the administration. The hope is that the revamped plan could dramatically reverse the fortunes of millions of U.S. families that have lost not only jobs, but huge portions of retirement savings and, in many cases, seen their homes taken over in mortgage foreclosures.
Many Republicans, however, are saying that any savings from the bailout should be used to pay down the deficit, reports CBS News senior White House correspondent Bill Plante.
"Here we are in almost month 12 of this administration and we're just now beginning to have a serious conversation about job creation, and just sort of jerking from one thing to the next with respect to the underlying issue that this administration came into office talking about it would solve, and that is job creation, unemployment rates, and what to do with small businesses. So you know, another speech? Another summit?," GOP Chairman Michael Steele told CBS' "The Early Show" Tuesday.
The U.S. economy appears to be on the mend after the deepest downturn since at least World War II, but unemployment - which was slightly improved in October but still standing at 10 percent - and scarce credit for small businesses have left the electorate in a sour mood. That could magnify the historic tendency of U.S. voters to cast their ballot against members of Congress of the president's party in the first national balloting after a change in the White House.
The Democrats currently hold a majority in both chambers of Congress. Mr. Obama succeeded George W. Bush on Jan. 20 and will be midway through his term at the time of the November 2010 congressional elections. The bailout, which had an initial price tag of $700 billion, was put in place in the final weeks of Bush's administration and is credited with preventing a feared meltdown of the American financial system.
The Obama administration will lose $200 billion less than expected from the federal bailout program, according to a Treasury official who spoke on condition of anonymity because that new projection had not been released. That's down from the $341 billion estimate of August. The lower estimate reflected faster repayments by big banks and less spending on some of the rescue programs as the financial sector recovered from its free fall more quickly than anticipated.
"TARP has turned out to be much cheaper than we had expected," Mr. Obama told reporters Monday in a brief question-and-answer period. "It means that some of that money can be devoted to deficit reduction. And the question is: Are there selective approaches that are consistent with the original goals of TARP - for example, making sure that small businesses are still getting lending - that would be appropriate in accelerating job growth?"
Still, the president's spokesman, Robert Gibbs, sought to downplay the idea of a quick fix.
"The president is not going to unveil the silver bullet idea which adds all the jobs that are - all the jobs that will be made up by the loss and the economic downturn and then some," he said on Monday.