President Obama puts economy, small businesses, and job creation at the center of his State of the Union address.

Kent Bernhard, Jr writes at Portfolio.com that faced with a national 10 percent unemployment rate and a corresponding erosion in his popularity, President Obama delivered his first State of the Union address tonight and offered up a laundry list of proposals aimed directly at the small businesses who do 60 percent of the hiring in America.

The president proposed eliminating all capital-gains taxes on small-business investment, creating tax incentives for small businesses to hire new workers and raise the wages of those they already employ, and steering $30 billion in money from the Wall Street bailout to community banks to lend to small businesses. In all, two thirds of the speech was devoted to the economy.

“Now, the true engine of job creation in this country will always be America’s businesses. But government can create the conditions necessary for businesses to expand and hire more workers,” Obama said. “We should start where most new jobs do—in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides its time she became her own boss.”

Just over a year into his presidency and less than a week before submitting his fiscal 2011 budget proposal, Obama proposed creating a task force of advisers to look for ways to reduce the nearly $1.4 trillion budget deficit. He also promised to freeze some discretionary spending for the next three years—a nod to those who have become more concerned in recent months about increased federal deficit spending. And he called on Congress to be more transparent about the money members add to the budget for pet projects—called earmarks.

“Rather than fight the same tired battles that have dominated Washington for decades, it’s time for something new. Let’s try common sense. Let’s invest in our people without leaving them a mountain of debt. Let’s meet our responsibility to the people who sent us here,” he said. “I’m also calling on Congress to continue down the path of earmark reform. You have trimmed some of this spending and embraced some meaningful change. But restoring the public trust demands more. For example, some members of Congress post some earmark requests online. Tonight, I’m calling on Congress to publish all earmark requests on a single website before there’s a vote so that the American people can see how their money is being spent.”

That pledge, however, isn’t stopping Obama from saying he hopes to invest in clean energy, an effort the White House says will create not only new small businesses and more jobs but also a bigger wave of innovation. Among his promises: renewed support for efforts to place a cap on carbon emissions and creation of a program to offer homeowners incentives to retrofit their homes to be more energy efficient.

“We should put more Americans to work building clean-energy facilities and give rebates to Americans who make their homes more energy efficient, which supports clean-energy jobs. And to encourage these and other businesses to stay within our borders, it’s time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America,” he said.

He added that incentives also have to be part of that picture, and hard choices, like one that would put a cost on greenhouse-gas emissions caused by burning coal, oil, and natural gas. Such a bill has passed the house but is stalled in the Senate.

“To create more of these clean-energy jobs, we need more production, more efficiency, more incentives,” he said. “That means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean-coal technologies. And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.”

For the long term, he also reiterated his call for financial reform, aimed at lessening risk and giving consumers more information.

“The House has already passed financial reform with many of these changes. And the lobbyists are already trying to kill it. Well, we cannot let them win this fight,” he said.

As with any State of the Union—the near-annual speech a sitting president gives to a joint session of Congress—Obama’s address served as a blueprint for where he wants to take his presidency for the coming year. And like with the speeches of his predecessors, Obama doesn’t skimp when it comes to making promises and proposals:
•He focused on making export deals, another area in which he hopes he can juice small-business hiring.
•He said he plans to steer more money to small banks to lend to small businesses. Plus, he reiterated his call for greater regulation of the entire financial system and for curbs on allowing banks to grow too big to fail.
•He called on Congress to pass a law reversing the recent Supreme Court ruling that “reversed a century of law to open the floodgates for special interests—including foreign companies—to spend without limit in our elections. Well, I don’t think American elections should be bankrolled by America’s most powerful interests, and worse, by foreign entities.”
•He’s proposing the hiring tax credit for more than 1 million small businesses.
•He’s aiming to double U.S. exports by pursuing a round of trade negotiations and strengthening ties with partners like South Korea, Colombia, and Panama.
•And finally, the president renewed his call for comprehensive health care reform, his signature issue. But he wants to reframe the issue, making the case that without such reform, the cost of health care drags down businesses’ ability to expand or create new jobs.

Obama made his case while his fellow Democrats still hold a majority in both houses of Congress, but he did so in a significantly changed political landscape ever since Massachusetts voters elected Republican Scott Brown to take the traditionally Democratic Senate seat that belonged to Ted Kennedy before his death.

That election deprived Obama of a 60-vote, filibuster-proof majority in the Senate, and that means the president will have to find a way to work with Republicans, not just on health care but on the other proposals he makes tonight.

 Read more at: Portfolio.com