This past Thursday at 10 p.m. the U.S. Senate voted to include a proposed Small Business Lending Fund as part of a larger bill called the Small Business Jobs Act. The purpose of the overall bill is to increase private sector lending and provide tax breaks to small businesses.
All the national data shows that small businesses are being frozen out of access to capital as a result of the economic meltdown. Smaller financial institutions simply are not lending to small businesses because regulators are telling them to improve their balance sheet and warning them not to make loans that have any risk—i.e. small business loans. Without this access to capital, small businesses cannot grow and hire the workers we need to lift our economy according to economists.
One important way of breaking this log jam is the Small Business Lending Fund in which the Federal government would infuse $30 billion into community banks to improve their financial position and doing so in a way that strongly encourages them to make small business loans again. Supporters argue that this $30 billion will result in $300 billion in loans.
|Sen. Mary Landrieu (D), LA|
The S.C. Small Business Chamber has been an active proponent of this Lending Fund that was proposed by President Obama back in January.
Senator Mary Landrieu of Louisiana and chairwoman of the Senate Small Business Committee has been one of its strongest advocates in the Senate and a sponsor of the overall Small Business Jobs Act.
Before the vote Thursday night, Landrieu said, “This is something that we want to do to help Main Street, to help small business. This isn’t about Wall Street. It’s not about bailouts. It’s not about troubled assets. It’s not TARP. It’s a small business lending fund, a strategic partnership with community banks.”
In spite of the tremendous need for opening the spigot on small business lending, Senate Republicans continued to oppose the needed solution objecting to government assistance and calling the measure TARP-2. Only two GOP Senators voted for the amendment that enabled it to be approved 60 to 39—George LeMieux of Florida and George Voinovich of Ohio.
LeMieux pushed back on his Republican colleagues. “This has nothing to do with (TARP). These are small banks. This is the banker you know down the street – the banker who’s at your rotary, who you see at church or synagogue. This is not some Goldman Sachs banker. This is the community banker who loans to the tailor, to the construction business, the folks that employ people in your hometown.”
And for Senators concerned about increasing the deficit, there is a solution to that also. Last Tuesday I joined Senator Carl Levin of Michigan and Representative Lloyd Doggett of Texas in a press teleconference coordinated by Business and Investors Against Tax Haven Abuse. In that press conference we discussed how to completely pay for the Lending Fund.
For all the talk by Republican Senators, including our two, about how they LOVE small business and want to help us, they just can’t set aside their partisanship to actually put their votes where their mouths are.
I had sent letters to Senators Lindsey Graham and Jim DeMint asking them to support the Small Business Jobs Act in general and the Lending Fund in particular. But our organization that represents thousands of small businesses across South Carolina received neither a response nor the votes we sought.
Hopefully the Small Business Jobs Act will come up for a full Senate vote very soon and let’s hope that the 60-39 vote will hold to break a Republican filibuster. If it does, not only will the Lending Fund be established but also SBA loan limits will be increased and business owners will be allowed to deduct the cost of health insurance for themselves and their family members in the calculation of their self-employment tax.
Send a message to Senators Graham and DeMint and ask them to put down their GOP flag for the sake of our small businesses and our economy. Ask them to be more like George (LeMieux and Voinovich) and vote for the Small Business Jobs Act.