Obama unveils a $33 billion tax-break plan to boost jobs

The proposal would give businesses a $5,000 tax credit for each worker hired in 2010 and subsidize wage increases by reimbursing Social Security tax increases for businesses that expand their payrolls.

"This is a simple, easy to understand mechanism that will cut taxes for more than 1 million small businesses," Obama said, as he unveiled the proposal after touring Chesapeake Machine, an industrial-equipment maker in Baltimore. "It'll give them an incentive to hire more people and a little bit of extra money to pay higher wages, to expand work hours, or invest in their company."

The incentives would be capped at $500,000 for each business, meaning they would mostly benefit small firms. The tax break on pay increases would apply only to workers making $106,800 a year or less.

The proposal is a variation of an idea that Congress rejected a year ago. But with job growth still lagging even as the economy expands, administration officials think the revised proposal is well-timed to encourage businesses to resume hiring.

"The proposal has been improved based on the discussions we have had with everyone from" members of Congress to small-business groups, said Jason Furman, deputy director of the National Economic Council.