President Barack Obama is to urge the US Congress to pass new tax breaks which are aimed at saving businesses about $US200 billion over two years.
With unemployment stuck at 10% and the economy appearing to slow sharply, the Democratic Party could face big losses at November's mid-term elections.
Mr Obama will lobby Congress to let US companies write off investment costs until 2011, which he believes will provide an added incentive for businesses to increase investment.
Earlier this week, Mr Obama called for $US50 billion worth of new infrastructure spending.
Federal Reserve chairman Ben Bernanke noted in a recent speech the worrying failure of businesses to increase their fixed capital investment, and the crucial role this would play in sustaining the recovery.
