Obama pushes Congress to pass small business plan

U.S. President Barack Obama makes remarks about the leaked Afghan war documents in the Rose Garden at the White House in Washington, July 27, 2010.

WASHINGTON (Reuters) - U.S. President Barack Obama pushed the Senate on Tuesday to pass legislation he says will benefit small businesses and generate jobs, and called on Republicans to back what he described as a plan similar to programs they had supported in the past.

The plan includes a $30 billion fund to invest in community banks to bolster lending to small businesses, which account for a large portion of job creation in the U.S. economy. It also would provide funds to support existing state small business credit initiatives and exclude some small business stock sales from capital gains taxes.

Obama wants Congress to pass as much legislation as possible before adjourning for its August recess, aware that legislators will be in full campaign mode when they return in mid-September, just weeks before the Nov. 2 elections.

The House of Representatives, which has already passed a version of the bill, adjourns at the end of this week and the Senate aims to leave at the end of next week.

"These are the kind of common sense steps that folks from both parties have supported in the past, steps to cut taxes and spur private sector growth and investment," Obama told reporters at the White House in remarks taking aim at Republicans after an hourlong meeting with congressional leaders from both parties that he said was "productive."

"I hope that in the coming days, we'll once again find common ground and get this legislation passed. We shouldn't let America's small businesses be held hostage to partisan politics and certainly not at this critical time," he said.

The White House meeting included Senate Republican Leader Mitch McConnell and John Boehner, his counterpart in the House, who have been vocal critics of his economic policies.

Boehner wants to repeal and replace Obama's healthcare overhaul and keep in place tax cuts for wealthy Americans that expire at the end of the year. Obama, who wants to let those cuts expire, has criticized Republicans for supporting economic plans he says helped lead to the recession and favour the rich.

REPUBLICANS WANT SPENDING CUTS

Boehner said Obama should focus on controlling spending and cutting taxes, not raising them.

"According to Congress's official tax scorekeeper, half of small business income in America will face higher taxes under the president's plan at a time when Americans are asking, 'where are the jobs?'" he said.

"Republicans are ready to work with the president to rein in spending and take action to support private sector job creation," Boehner said.

With the U.S. jobless rate stuck just under 10 percent, recession-weary Americans go to the polls on Nov. 2 to elect 435 members of the House and 37 members of the U.S. Senate.

Sixty-seven percent of voters feel Obama has not focused enough on creating jobs, with the economy seen as the country's main problem, according to Reuters-Ipsos poll results released on Tuesday.

Forty-six percent of registered voters said they would vote Republican in the November election, versus 44 percent who said they would back Democrats, according to the poll. Both Republicans and Democrats anticipate that Republicans will pick up seats against the Democratic majorities in both congressional chambers and could win control of the House.

"Everyone understands that we're less than 100 days from an election," Obama said. "It's during this time that the noise and the chatter about who's up in the polls and which party's ahead threatens to drown out just about everything else."

He said, "The folks we serve ... sent us here to represent their interests, not our own."

(Additional reporting by Donna Smith; editing by Jackie Frank)