President Obama’s speech on job creation today will define three key areas where the Administration wants to indirectly devote part or all of the $200 billion dollars in unexpected TARP savings – small business job creation, infrastructure investment, and “cash for caulkers” clean energy programs.

Senior Administration officials previewed the speech, which is happening at this hour at the Brookings Institution. They said that the reduction in the TARP price tag has provided additional “breathing space” for this kind of investment in job creation, meaning that TARP authority would not be used to directly pay for the measures, but the impact on the budget would be effectively the same. While the officials would not be pinned down on a cost for these measures, one can expect that the provisions would not go above that $200 billion dollar ceiling. Administration officials characterized this as “moving away from helping banks on Wall Street and toward hiring on Main Street.”

The three key areas are:

1) Small Business. There are three ideas in this area. The first is a series of tax cuts to support additional small business investment. These would include an elimination of capital gains taxes for small business in 2010, and extending Recovery Act tax breaks on enhanced expensing provisions and the bonus depreciation tax incentive. Basically, cutting taxes for small businesses.

The second is an additional tax break, that job creation tax credit in 2010, designed “to get job growth more connected to GDP growth.” The left-leaning Economic Policy Institute has a proposal along these lines.

The third is an extension of lending to small businesses, and the money for this could come directly out of TARP. The White House would eliminate fees and raise loan guarantees for SBA loans through next year, something that they said was so successful in the Recovery Act that they ran out of money. They would also ask the Treasury Department to fast-track small business lending through banks.

2) Infrastructure. Under the proposal, a certain amount of additional infrastructure spending above the expected appropriation – $50 billion was the number thrown out by senior Administration officials – would go to infrastructure spending, including highways, transit, rail, aviation and water. Today’s New York Times investigative report about the disastrous nature of the nation’s water treatment systems is just one example of what could be restored with this new spending. Better and cleaner transportation and physical infrastructure systems could be a public health boon as well as a job creator.

The Administration would also set aside a “meaningful portion” of that infrastructure investment for merit-based projects, similar to a program in the Recovery Act called TIGER. This would leverage money with public-private partnerships.

3) Clean Energy. There are two parts to this. The first represents the White House wanting to catch the lightning in a bottle from the cash for clunkers program a second time with something colloquially referred to as “cash for caulkers.” Under this plan, the federal government would encourage energy efficiency retrofits by providing rebates to consumers who partake in them. Senior Administration officials called this a “win-win” idea that would over time save consumers money on energy bills and put people in the construction sector back to work. No numbers were given for this proposal.

The second part would be to build up Recovery Act investments in clean energy which were “over-subscribed,” where more companies offered bids than the money available. The example given was renewable manufacturing, like factories making components that go into wind turbines.

The President will talk about fiscal discipline in his speech, but would stress that additional investment is needed in the near term to “address the unemployment crisis.” Any deficit reduction would happen in the out years. And the President would argue that such deficit reduction starts with the health care reform proposals to stunt the long-term growth in medical inflation.

In addition to these measures, the President is still holding firm to previous ideas to increase the social safety net (extending unemployment benefits, the COBRA subsidy, a $250 one-time payment to seniors and veterans, and relief to local governments). President Obama also announced that he would wind down TARP entirely, though he set no end date for that.

As a snap analysis, some of these programs are decent, though the small business areas are weighted pretty heavily on tax cuts rather than speeding lending. The more radical ideas of direct employment are not here, and I’m unhappy to see aid to local governments, where 900,000 jobs are at stake in 2010 alone, shunted to the side rather than highlighted. Overall, it beats nothing and in some areas could be worthwhile. I’m not sure it’s enough.