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 Treasury Secretary Timothy F. Geithner Press Conference Remarks on New Markets Tax Credits Announcement Chicago, Illinois


10/30/2009

TG-338

As Prepared for Delivery

Thank you, Rep. Davis. As you've said, "all the issues associated with poverty are pronounced" in your 7 th District of Chicago.  And all of them are harder to deal with because of the recent economic and financial crisis.

It is good to see you [again], Mayor Daley.  I'm pleased to be here with Treasury's Donna Gambrell, Director of the Community Development Financial Institutions Fund.

 I want to offer a special thanks to Bill Leavy.   Bill is Executive Director of the Greater West Town Community Development Project, our host today.   Bill is helping Chicago's disadvantaged get the training they need to find jobs.  

Yesterday's 3.5 percent GDP figure was the first positive performance the U.S. economy has posted in more than a year, following the steepest drop in growth in more than 50 years, and the longest in more than 60 years.  

This means that our Recovery Act is helping to move us in the right direction--with tax cuts that put money in the pockets of middle-class families and small businesses; extended unemployment and health benefits to tide people across tough times; aid to state and local governments to sustain critical services like teachers in the classroom, and investments in infrastructure to create private sector jobs.

It means that our financial programs are working to repair the financial system so that it can make the loans to households and businesses essential to reviving prosperity.

But a single quarter's growth is only a first step.

It is enough to stanch the hemorrhaging of nearly three-quarters of a million jobs a month that greeted us last January.  But it is not enough to bring down the jobless rate from its unacceptably high level of nearly 10%.

It is enough to get some people back to work.  But it is not enough to ensure that every American who wants a good job--and the security and self-worth that comes with work--can find one and keep it.

The American people expect us to reach for these broader goals, and President Obama is doing everything in his power to deliver for them.  

To deliver, we must rebuild our economy on a firmer foundation--to equip our workers with the skills and education they need to compete; to invest in renewable energy and the jobs of the future; and to make health care affordable for families and businesses everywhere.

And we must make sure that the advantages of this new, stronger economy are broadly shared, including by communities, such as those in the 7 th District and those served by Greater West Town Project.

These communities suffer the most in recessions. Job-expanding projects fail for lack of investment.  These failures set back the communities in which they occur, making those communities less appealing to future potential investors, thereby making them prone to still more setbacks.

The New Markets Tax Credit program helps break this vicious cycle and extends the benefits of growth to all corners of the country.

The program works by attracting private business and development.  It does so by offering tax credits worth 39 percent of the value of the investment claimable over seven years.  This credit offsets some of the risks involved in investing in these communities and, in the process, creates a partnership between the private and public sectors to help create jobs and opportunity where they are most needed.

New Markets Tax Credits have proven to be remarkably effective job creators [engines of economic development].   To date over $14 billion of private sector capital has been invested in an estimated two thousand businesses, supporting roughly 200,000 jobs.

That's why the Administration has worked to expand the program. And that's why today I am announcing tax credit allocations to support $5 billion in new investments.

Those on the receiving end of recent investments under the New Markets program are proven winners. One of these is the Greater West Town Community Development Project.  

Leavy and his team are using $9.3 million of NMTC-supported funds to build a new career training and economic development center on North Sacramento Boulevard.  When they move in next September, they will be able to more than double their program to help students who did not complete high school, from 100 students to 250.

Since its inception in 2003, the program has managed to graduate 70 percent of incoming classes sending hundreds of graduates out with full high school degrees and college transition training.

The center will also provide new quarters for Greater West Town's shipping, receiving and warehousing program. This program has traditionally graduated and placed more than 80 percent of participants.

One of those who has landed a new job is Francisco Chavez.

Chavez is an Army veteran and 41-year-old father of three.  He worked days and went to community college at night until the economy's troubles caught up with his most recent employer, a gas tank manufacturer.  He was laid off in June of last year.

He enrolled in Greater West Town's shipping and receiving program this summer. Despite having just worked as a shipping coordinator, he found the transition tough because of all the new technology.

"The thought of quitting passed my mind,'' he told one of my staff.  "But there was no way I could; I have my children."

Francisco graduated two weeks ago. He landed a shipping job with Bearse Manufacturing, a military pack and duffel bag maker, three days ago.  He starts Monday.

Francisco, will you say a few words about how Greater West Town has improved your life?

[Francisco Chavez speaks.]

Francisco's story will have to be repeated millions of times over before a real recovery is underway.  

And we are going to keep at it so that their jobs will come with access to affordable health care and our children will have access to better education.  And with programs like the New Markets Tax Credits and help from groups like Greater West Town, we are working to restore confidence in America by giving Americans the opportunity and economic security that they deserve.

Thank you.

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