Maloney statement on the Small Business Jobs and Credit Act
WASHINGTON, DC – Rep. Carolyn Maloney (D-NY) offered the following remarks in support of the Small Business Jobs and Credit Act of 2010, H.R. 5297, which passed the House today.
Madam Speaker, the Small Business Jobs and Credit Act of 2010 (HR 5297) will strengthen our current economic recovery, by strengthening our small businesses.
This legislation is sorely needed to bolster our small firms, which have lagged their larger counterparts in recovering from the Great Recession.
While the economy has made significant progress since the beginning of 2010, including eight straight months of private sector job growth, small businesses are not yet fully participating in this recovery.
The legislation before us will help change that – by providing small businesses with eight separate tax cuts totaling $12 billion; promoting lending to small firms; and encouraging investment in these engines of growth.
A September report from the Joint Economic Committee, which I chair, provides fresh evidence of the challenges that continue to face small businesses.
While hiring at medium and large firms began to pick up in mid-2009, hiring at small firms remains flat and has continued to decline for the smallest firms – those with fewer than 50 employees.
Why aren’t small businesses hiring?
A big part of the answer is that they simply cannot get the loans they need.
The number of loans to small businesses and the value of those loans are both dropping.
Loans made to small businesses, which peaked at 27.2 million in the second quarter of 2008, have fallen by over 4.8 million since then, a drop of 17.8 percent.
At the same time, the total value of those loans fell by $60 billion to approximately $650 billion.
I have heard time and time again from my constituents that even as the economy gains strength, creditworthy businesses still cannot get the normal business loans they need to make payrolls, pay vendors, or expand their operations.
I have heard this from a wide variety of businesses – from the old fashioned 100 year old, family-owned Eneslow Shoes, to the high tech QED National –
a leading provider of Staff Augmentation services to IT organizations.
Sound companies doing good business tell me they just can’t get the credit they need.
There is a provision in this legislation that I believe will get capital flowing again to small businesses.
The $30 billion Small Business Lending Fund will leverage $300 billion in loans to small businesses.
Small and community banks receive capital from the Fund on terms that become more favorable as they make more loans to small businesses.
The new lending fund is a big piece of this legislation – but it’s just one piece.
· The bill also increases the loan limit for SBA 7(a) loans from $2 million to $5 million.
This is especially important for high-cost areas like New York City, where $2 million just doesn’t go very far for a small business.
· The bill extends 50 percent bonus depreciation, enabling small businesses to immediately write off half the cost of investments in new equipment this year.
· It promotes entrepreneurship by doubling the tax deduction for start-up expenses.
· And finally, 2 million self-employed individuals will be able to deduct the cost of health insurance for themselves and their families this year.
Small businesses are the backbone of the American economy, generating innovation, growth, and jobs.
Three out of four Americans work for establishments with fewer than 250 employees.
It’s critical that we get small businesses firing on all cylinders. And it’s frustrating it hasn’t happened sooner. But, I’m confident that this legislation will help our small firms turn the corner, add employees and accelerate our economic growth.