Obama to Propose $5,000 Tax Credit Per New Job

President Obama will unveil his new jobs plan Friday, to include $33 billion in tax breaks for businesses to hire workers and increase pay.

The plan, which Obama is scheduled to announce in a stop at a Baltimore business, would offer a $5,000 tax credit for each new worker hired this year, up to $500,000 per business.

The cap is one of several features meant to tailor the program more to small businesses than to large corporations. Startup companies could receive half that amount. Existing companies could not close down and then reopen under a new name and receive any benefits, White House officials said Thursday

Obama alluded to the plan Wednesday in his State of the Union speech, in which he set job growth and specifically passage of a jobs bill as his top priority in 2010.

"People are out of work. They're hurting. They need our help. And I want a jobs bill on my desk without delay," Obama said Wednesday in his prime-time address.

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Obama also called for $30 billion from repaid Wall Street bailout funds to be directed toward helping community banks lend to small businesses. He pitched a new tax credit for small businesses that hire new workers and a tax incentive for businesses that invest in new plants and equipment. Plus he called for the elimination of all capital gains taxes for small business investment.

Obama said the "devastation" of the economic crisis remains, but also defended his approach so far, saying his administration acted "immediately and aggressively" to stave off a "second depression."

The jobs plan, which needs congressional approval, would end on Dec. 31. Administration officials proposed funding it with money repaid to the government from the 2008-09 bank bailout program.

The Social Security system would not lose any revenue under the plan, administration officials said.

The House rejected a similar proposal last month, although Senate Democrats have warmed to the idea lately. House Republicans, meanwhile, hinted they would have questions about the effectiveness of Obama's plan.

The Associated Press contributed to this report.