Obama Plans Small Business Lending Boost

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WASHINGTON - Continuing his administration's recent optimistic tone, Monday, President Barack Obama promised help for the "heart of the American economy"-- small businesses.

Speaking at the White House, Obama said the U.S. had small businesses to thank for nearly 70 percent of its jobs in the past decade and vowed to allow that progress to continue.

"As president I will continue to do everything in my power to ensure that you have the opportunity to contribute to your community, to our economy and to the future of the United States of America," Obama said.

Part of the plan unveiled Monday aims to funnel more money to help small businesses, like boosting bank liquidity with up to $15 billion to lower lending fees and other obsticles owners can face.

But the plan also comes as anger boils over from previous government loans.

Click play to watch John Jessup's report followed by reaction from the Small Business & Entreprenuership Council's Raymond J. Keating.  Also, click here to watch President Obama's entire speech, Monday, on small businesses.

The mission is make it easier for small business owners to get loans. It is a sector of the struggling economy on which both Republicans and Democrats have turned their focus.

"We've got to do something to help these small business people," said Rep. Eric Cantor R-VA on NBC's Meet The Press. "They're the job creators in this economy."

The Plan

The plan that goes into effect today will cut lending fees banks typically charge small businesses to borrow money, temporarily eliminating some upfront fees and processing charges for certain loans.

The goal is to unlock the frozen credit market to help small business owners fuel growth in their communities.

"We want to demonstrate a genuine commitment," Christina Romer of the White House Council of Economic Advisers told NBC's Meet The Press. "We're doing a lot of help for banks, for homeowners, small business people need it too."

However, critics of President Obama's overall plan to stimulate the economy question how it will work.

"The problem we're seeing in the Obama administration is a lack of focus on how to get things going again," Cantor said. "If we're going to get things going again, how can we have a budget that doubles the debt of our children? How are we going to raise taxes on the job creators?"

AIG Pays Out Bonuses to Company Executives

The initiative was announced just as anger fumed over more bad bailout news.  Insurance giant American International Group revealed that it doled out about about $165 million in bonuses to keep executive employees.

The company says it had to pay them to honor contracts that had been written before accepting federal help.

"The message here, I'm afraid, to any business out there that's thinking about taking government money is 'let's enter into a bunch of contracts real quick, and we'll have the taxpayers pay bonuses to our employees," Sen. Mitch McConnell R-KY told ABC's This Week. "This is an outrage."

"This is an example of people at the commanding heights of the economy misbehaving, abusing the system," Rep. Barney Frank D-Mass said on Fox News Sunday.

The AIG bonuses brought anger from both parties on Capitol Hill as well as the administration. Now AIG has agre to the Obama administration's request to cut back on future payments.

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CBN News
John Jessup

John Jessup

CBN News Washington Correspondent

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