President Barack Obama on Thursday signed into law the $17.5 billion Hiring Incentive to Restore Employment Act (the “HIRE Act”), comprising a payroll tax holiday for businesses that hire unemployed workers, an income tax credit of $1,000 for businesses that retain these employees and an extension of highways project financing. The bill was passed in the Senate last month and the House earlier in March, with voting largely along partisan lines.
Speaking at the Rose Garden in the White House before signing the bill, Mr. Obama struck a cautious note saying, “I’m signing it mindful that, as I’ve said before, the solution to our economic problems will not come from government alone. Government can’t create all the jobs we need nor can it repair all the damage that’s been done by this recession.”
In a clear indication that jobs may dominate the administration’s agenda in 2010, Mr Obama said, “There's a lot more that we're going to need to do to spur hiring in the private sector and bring about full economic recovery.” However, he said, the government could promote a strong, dynamic private sector as the “true engine of job creation,” and nurture the conditions that allow companies to grow and start hiring again.
Unemployment levels in the U.S. stabilised last month at 9.7%. While the economy has technically emerged out of recession, over 8 million Americans lost their jobs through the global economic downturn and new hiring is sluggish.
Apart from its strong focus on hiring in businesses, particularly small and medium sized businesses, the HIRE Act stands out for its focus on job creation through infrastructure project financing support. Touching upon this aspect of the bill Mr. Obama said it reforms the framework of municipal bonds to encourage job creation by expanding investment in schools and clean energy projects.
“Say a town wants to put people to work rebuilding a crumbling elementary school or putting up wind turbines. With this law, we’ll make it easier for them to raise the money they need, to do what they want to do by using a model that we've called Build America Bonds — one of the most successful programs in the Recovery Act,” Mr. Obama explained.
Commending a minority of Republicans in Congress who supported the bill Mr. Obama said, “The jobs bill I’m signing today — and our broader efforts to achieve a recovery — aren’t about politics. They’re not about Democrat versus Republican. This isn’t a game that we’re playing here. They’re about the people in this country who are out of work and looking for a job.”