Obama may seek research tax breaks to spur growth

Washington: US President Barack Obama may include a permanent extension of the research and development tax credit among the tax breaks for businesses he is contemplating to spur job growth, two Congressional aides said.

The White House also has been considering payroll tax relief to encourage new hiring, more tax breaks for small businesses and new infrastructure spending, according to people familiar with the discussions who spoke on condition of anonymity because the discussions are preliminary.

Obama's spokesman, Robert Gibbs, said no decisions have been made.

The administration's economic team is reviewing "targeted" measures to boost economic growth and hiring that won't be at the same scale as the $814 billion (Dh2.9 trillion) stimulus legislation approved last year, he said on Thursday. A permanent extension of the research and development tax credit would cost $70.5 billion over the next 10 years, according to the president's 2011 budget proposal.

No new stimulus

"Some big new stimulus plan is not in the offing," Gibbs said. "I do not anticipate something that rivals the extraordinary measures that the president has already taken."

Less than two months before Congressional mid-term elections and with a government report due yesterday forecast to show the unemployment rate rose last month, administration officials are working to balance new stimulus measures against their own projections of a budget deficit that will hit a record $1.47 trillion this year and $1.42 trillion in 2011.

Polls show voters are increasingly sceptical of Obama's handling of the economy following the worst recession in more than 70 years. Republicans, who are seeking to gain majorities in the House and Senate in November elections, have criticised last year's stimulus as ineffective.