By Joseph Picard: Subscribe to Joseph's RSS feed
September 27, 2010 6:14 PM EDT
President Obama today signed the Small Business Jobs and Credit Act into law.
"This is a bill that will cut taxes and help provide loans to millions of small business owners who create most of the new jobs in this country," Obama said. "It is fully paid for, it won't add to the deficit, and small businesses across the country have been waiting for Washington to act on this bill for far too long."
The House originally passed the measure in June. In the Senate, Republicans successfully filibustered passage until, on Sept. 16, two Republican senators - Sen. George Voinovich of Ohio and Sen. George LeMieux of Florida - crossed the aisle to support the bill, giving it the needed 3/5's majority to pass.
Because the bill had been amended, it had to return to the House for another passage, which happened last week.
The bill would, among other things, provide $30 billion in capital to small banks with incentives to increase small business lending; create the State Small Business Credit Initiative to strengthen state programs that support lending to small businesses and small manufacturers; eliminate capital gains taxes on certain small business investments, amounting to $12 billion in small business tax cuts; and increase the amounts of loans that the federal Small Business Administration could provide, especially for start-up enterprises.
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"This new law will give our nation's nearly 8,000 community banks the opportunity to further serve their local small business customers and continue to aid Main Street's economic recovery during this critical time," said Camden R. Fine, president and CEO of the Independent Community Bankers of America, a staunch supporter of the measure. "ICBA urges bank regulators to quickly implement the program and get much-needed capital into the hands of small business owners."
Paul Merski, ICBA's chief economist, explained that the $30 billion generates additional funding.
"Because of the attractive interest rates, a community bank can leverage the loan 10 to 1," Merski said. "That $30 billion in funding can become $300 billion in loans to help small businesses."
Among the organizations supporting the bill were the Conference of State Bank Supervisors, the Independent Community Bankers of America, 29 state banking associations, the Motor & Equipment Manufacturers Association, the National Association for the Self-Employed, the National Bankers Association, the National Federation of Independent Business, the National Small Business Association and the U.S. Hispanic Chamber of Commerce.
Republican opposition to a measure that favors business is widely viewed as aimed at discrediting Democrats with voters - either as big spenders if the bill passed, or an incompetent majority if it failed - with mid-term elections a little over a month away.
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