AFL-CIO wants TARP funds to target small businesses, not Wall Street

AFL-CIO President Richard Trumka wants lawmakers to redirect bailout funds for the financial sector to small businesses.

Trumka said money from the Troubled Asset Relief Program (TARP) needs to be plugged into economic programs that will help “Main Street,” given reports that despite the infusion of federal funds, it is still hard for businesses and consumers to get credit.

{mosads}“Banks aren’t lending to small business. We should establish a fund to lend TARP money directly to small- and medium-sized businesses at commercial rates, managed by the community banks left out of the Wall Street bailout, with the banks taking first-dollar risk,” Trumka said in prepared remarks before a conference hosted by the Economic Policy Institute on Tuesday.

“If small businesses can get credit, they will create jobs. And we need jobs now.”

The TARP transfer is part of a five-point plan by the union to create 2 million jobs over the next year. It also comes in the wake of the White House’s announcement that it plans to host a jobs summit on Dec. 3.

Trumka and the AFL-CIO were big backers of President Barack Obama’s $787 billion stimulus package. In his remarks, the union leader said he believed the recovery effort created or saved 1 million jobs and stopped the country from sliding into a depression.

But more still needs to be done, Trumka said Tuesday. With the unemployment rate now above 10 percent, the administration and Congress have begun to consider more measures to create job growth as millions of Americans remain unemployed.

As part of the union’s five-point plan, Trumka recommends an extension of unemployment benefits, food assistance and healthcare for those without work. In addition, reinvesting in the nation’s infrastructure will put thousands back to work. Further, aid to local and state governments has to be boosted. And along with the TARP transfer, the most distressed communities should take priority over others in the case of government assistance.

{mosads}Trumka said he plans to take the AFL-CIO’s proposal to the White House and lawmakers on Capitol Hill.

“Doing nothing is not an option. If we don’t act, everything will be worse — including our federal budget deficit,” Trumka said. “That’s why those of us here today have joined together to say this is not tolerable. We can put America back to work.”