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Senate finally passes small business aid bill

By Reuters
September 17, 2010

(Reuters)

The Senate passed a long-stalled measure on Thursday that would boost lending to small businesses, giving President Barack Obama’s Democrats one of their last chances before November elections they are working to revive the sluggish economy.

The 61 to 38 vote sends the measure back to the House of Representatives, which has passed a similar bill and is expected to approve the Senate’s version as soon as next week.

With the unemployment rate stuck at 9.6 percent, voters cite jobs and the economy as their top concern and say Obama has not done enough on these issues.

Republicans are poised to rack up big gains in the November 2 elections and could win control of one or both chambers of Congress.

If the measure clears Congress, it would be a rare victory on the job-creation front for Democrats, who have seen many of their other efforts blocked by Republicans this year.

Republicans have characterized the bill as a bailout along the lines of the unpopular Wall Street bank rescue effort, and blocked action since the end of July.

“For something this common-sense, it’s been harder work than we thought it would be,” said Democratic Senator Max Baucus, who helped craft the bill.

Smaller firms have complained of trouble getting access to credit after the 2007-2009 financial crisis, when many banks sharply pulled back their lending activity. Credit continues to be tight.

The bill, backed by industry groups, would create a $30 billion fund that the government would invest in independent community banks to encourage lending to small firms.

It would also exclude from taxes all capital gains on sales of small-business stock, and ease tax rules for expending and depreciating equipment. Tax breaks in the bill total $12 billion.

DEMOCRATS SAY COULD CREATE 500,000 JOBS

Democrats estimate the lending incentives could lead up to $300 billion in new small business credit over the coming years and create 500,000 new jobs. Some 8 million jobs have been lost since the recession began in late 2007.

Obama welcomed passage of the bill.

“It’s going to make a difference in millions of small business owners across the country who are going to benefit from tax breaks and additional lending so companies have the capital to grow and hire,” he said at an education event in Washington.

The bill passed with the help of two Republicans, who broke with their party to give the Democrats the votes they needed to overcome a procedural roadblock.

One of those Republicans, Senator George Voinovich, said the need to help small businesses outweighed his frustration that Republicans were not able to offer changes to the bill.

“My support for the small business legislation is based upon the many calls of support I heard from Ohio’s small and medium manufacturers, most of whom are still struggling to recover from this recession,” said Voinovich, whose Rust Belt state has been hit particularly hard by the worst recession since the Great Depression.

Many Republicans have invoked small businesses as they oppose an Obama proposal that would raise income taxes on the wealthiest 3 percent of U.S. households, arguing it would snare many who file business income as personal income.

Republican Senator Charles Grassley said he supported the bill’s tax provisions, but not its lending facility.

“The small-business fund in the bill just doesn’t have enough safeguards in place to ensure that recipients are credit-worthy or that the taxpayers will be made whole in the end,” Grassley said.

The government’s definition of a “small business” varies by sector, but typically encompasses firms that employ fewer than 500 workers or take in less than $7 million in annual revenue.

(Additional reporting by Richard Cowan, Trisha Zengerle and Kim Dixon, Editing by Vicki Allen and Philip Barbara)

Copyright © 2010 Reuters

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5 Responses to Senate finally passes small business aid bill

  1. Pondering It All

    September 18, 2010 at 12:46 pm

    When Republicans in Congress almost all vote against a bill to help small businesses obtain credit, hire new workers, and grow, that demonstrates quite clearly just who they work for: They don’t give a rat’s ass about people who make less than $1,000,000 per year, though they would like you to think they are the party for every hot dog vendor and drywall contractor.

    The numbers don’t lie: Obama’s proposal to raise the top tax rate from 36% to 39% at $250,000 AGI would give a small business executive earning $300K a $1,500 increase ((300K-250K) * 0.03). That’s less than he spends on coffee! On the other hand, the CEO making $1M per year has to pay out $22,500 (enough to buy his daughter her first car). And the stinking rich making $100M per year may have to pay the full 39% on their corporate bond dividends instead of getting Bush’s 15% discount rate ($24M tax increase). That’s the part of Obama’s proposal the Republicans will do anything to stop, since those are their real bosses (The “have-mores” to quote GWB.)

  2. woody188

    September 18, 2010 at 6:13 pm

    Giving banks money to lend didn’t work at the beginning of the year…so what’s changed?

    Mom and Pop have already maxed out their credit, so how will them getting more loans they can’t pay off make them hire anyone?

  3. Carl Nemo

    September 18, 2010 at 7:04 pm

    Hi Woody,

    “Bwany Fwank” et al. know all this, but they are totally compromised crimpols that do the bidding of their bankster masters. They could give a hoot less about “We the People”. Every time I listen to lisping “Bwany” speak I have a cold rage well up inside knowing that we must suffer such “convenient” incompetency at the hands of this plug-in mattoid et al. in Congress cut from the same cloth…! : |

    Carl Nemo **==

  4. Bogofree

    September 18, 2010 at 9:31 pm

    Error – Bogo!

    Above is link to main story in Herals. Here is Howie’s piece.

    http://bostonherald.com/news/columnists/view.bg?articleid=1282314