Small businesses 'engine' of US economy: Obama

President Barack Obama called small businesses the “engine” of the US economy and said too many are still struggling to get the credit they need to operate.

In his weekly address on the radio and Internet, Obama said the nation’s banks, supported by taxpayers in the economic crisis, now need “to stand by the creditworthy small businesses”.

“It’s time for those banks to fulfill their responsibility to help ensure a wider recovery,” Obama said. “We’re going to take every appropriate step to encourage them to meet those responsibilities.”

The president this week announced measures to open up credit for small business, such as capital injections for community banks to spur lending. Obama also asked Congress to raise the limits for Small Business Administration loans from $2 million to $5 million and as much as $5.5 million for manufacturing.

“The goal here is to get credit where it’s needed most — to businesses that support families, sustain communities, and create the jobs that power our economy,” Obama said.

The president has asked Treasury Secretary Timothy Geithner and SBA administrator Karen Mills, to convene a conference of regulators, congressional leaders, lenders, and entrepreneurs to come up with additional steps to improve the flow of credit to small businesses looking to expand.

In the radio address, Obama said his health-care overhaul plan would allow small businesses to buy insurance for employees through exchanges that may offer better coverage at lower costs.

The “crushing” costs of health-care are discouraging many entrepreneurs from even trying to start a business and causing others to cut benefits and jobs, or close their doors, Obama said.

“Small businesses have always been the engine of our economy — creating 65 per cent of all new jobs over the past decade and a half — and they must be at the forefront of our recovery,” Obama said.

In the Republican address, Senator Mike Johanns focused on Obama’s number one domestic priority — overhauling US healthcare.

The Nebraska Republican said Obama’s plan would drive up costs and lead to higher premiums and more government mandates. Older Americans would see funding for hospice care and home health care services “cut off,” he said.