Obama Signs $42 Billion Package for Small Businesses

Posted on October 13, 2010. Filed under: Uncategorized |

President Obama has signed a new mini-stimulus package that would provide small businesses with $12 billion in tax breaks and access to a $30 billion lending fund.

“It was critical that we cut taxes and make more loans available to entrepreneurs,” Obama said as he signed the long-stalled measure into law. “Today, after a long and tough fight, I am signing a small business jobs bill that does exactly that.”
The action came after the Senate voted 61-38 to beat back a Republican filibuster and pass the package. Two Republicans — Sen. George LeMieux of Florida and Sen. George Voinovich of Ohio –joined the Democrats in backing the measure.
Small businesses, often cited as a key engine in spurring economic recovery, have been especially hard hit by the economic downturn. The sector’s recovery and renewed hiring are seen as critical next steps in America’s economic rebirth.
“While I am grateful for this progress, it should not have taken this long to pass this bill,” Obama said as the Senate moved toward passage.

“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 capital to grow and hire, and this is really welcome news,” he added.

Republicans opposed the measure as a second coming of the unpopular bank bailout plan the Troubled Assets Relief Program (TARP).
“It had the mini-TARP in there, with no real help to small businesses, as far as I’m concerned,” said Sen. Orrin Hatch (R-Utah).
The $30 billion lending fund, which would be administered by the Treasury Department, would provide capital to small banks that would make loans available to cash-starved small businesses.

The bill’s $12 billion in tax breaks are designed to spur small business investment and hiring. The tax breaks would allow new write-offs for the cost of equipment and other business improvements and health care costs for the self-employed would also be deductable. In addition, some Small Business Administration loan fees would continue to be waived.

Democrats have said the measure could result in the creation of 700,000 new jobs nationwide in the near term. Opponents of the measure dismiss that estimate, saying small businesses are being hurt as much by diminished consumer spending as by limited access to credit.

The bill enjoyed early bipartisan support, but Republicans balked at the addition of the $30 billion lending fund as too costly. The measure was the target of a summer filibuster that prompted frustrated House members to stage a quiet demonstration on the Senate floor.

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