Earlier this week President Obama introduced a plan to use excess money from the TARP to help spur job growth. While many working class Americans have been critical of the financial bailout up to this point, November marked a major turning point in the economic recovery as the unemployment rate fell for the first time in over a year. The drop of .2% is the biggest since early 1998, and is a strong sign that the economic recovery may be starting to trickle down to Main Street.

In a speech on Tuesday, Obama stated his intentions to increase the scope of the bailout to include small businesses by reallocating some of the TARP funds. Originally the extra money was intended to go to paying down the deficit, but under the proposed legislation the money will be used to provide incentives to small businesses for hiring new workers in the form of tax breaks, although details of the plan have yet to be released.

“I believe it’s worthwhile to create a tax incentive to encourage small businesses to add and keep employees and I’m going to work with Congress to pass one,” President Obama said on Tuesday. 

In addition to providing incentives for small businesses to hire, Obama also proposed extending some of the tax breaks that were part of the stimulus package that was originally passed in February. The President outlined plans to create jobs by improving roads, bridges and other infrastructure throughout the country as well.

As with most debates, there is a strong partisan divide on the legislation. Those on the left say that with the unemployment rate still at 10-percent, more government aid in needed; while those on the right claim that the attempts to pass the new bill are evidence that the original plan failed. One of the main sticking points for Republicans is the fact that the TARP was instituted to act as a loan program, but with the new spending initiatives, there will be no method available for repayment.

“The stimulus money clearly was a spending bill. TARP was a loan — a loan to be paid back. And we know that a number of the banks are, in fact, paying it back,” said Senate Minority Leader Mitch McConnell. “So I don’t think raiding a loan program to launch another spending spree is the best way to create jobs.”

According to initial estimates, the legislation would cost anywhere between $75 billion and $200 billion, and would be paid for by left over money in the TARP and funds that banks have already repaid. Today Timothy Geithner, the Treasury Secretary, announced that the TARP, which was originally scheduled to expire this December, will be extended through next October. Although details involving the potential cost of the legislation are scarce, the President is adamant that the plan not add to the already ballooning deficit. In his statement on Wednesday, Geithner told Congress that we would be like to rescind $150 billion of TARP funds to offset the costs of the newly proposed plan.

The TARP fund received a boost today when Bank of America officially paid off their $45 million in TARP loans, leaving Citigroup and Wells Fargo as the only big banks left on the government’s books—although Citigroup recently announced a similar plan of repayment.

Despite the recent surge of efforts to improve the struggling job market, November reports gave Americans reason to be optimistic. Just 11,000 jobs were shed in November, more than 100,000 less than analysts had predicted.  There should be an increased windfall for the unemployed this month as companies look to hire seasonal workers to keep up with the holiday rush.

One of the leading indicators of job creation is the hiring of temporary workers. Businesses tend to be reluctant to hire full-time employees straight out of a recession, and temps are generally used to bridge the gap and test the waters. In November, employers hired over 50,000 temporary employees, a number that has been steadily increasing since the summer.

Some of the sectors that are strongest right now include engineering, accounting and healthcare. The President is quick to note, however, that there are still areas that are underwater.

“If you look at the U.S. financial system today, there are parts that are still very damaged,” President Obama said, highlighting the volatile housing sector and credit problems that small businesses are experiencing.

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