U.S. Rep. Gabrielle Giffords this week voted with the majority in the House to support legislation that will assist small businesses, the economic engine of the American economy.
"There are more than 107,000 small businesses in Arizona accounting for more than 97 percent of the state's private sector employers," said Giffords, a former small business owner. "If we can give small businesses a push, the entire economy will move forward."
Giffords on Tuesday voted in favor of the Small Business Jobs Tax Relief Act, which passed 247-170. And today, she voted in favor of the Small Business Jobs and Credit Act which passed 241-182.
The two bills will be combined into one small business bill and sent to the Senate for its consideration.
The $7.1 billion in small business tax cuts and lending in the bills will entirely be offset by closing two tax loopholes. One loophole is for a crude oil product that is a waste byproduct of paper manufacturing. The other loophole involves a type of tax planning that allows rich families to pass on wealth while cutting their estate and gift taxes.
The Small Business Jobs Tax Relief Act will increase the capital gains tax cut for those who invest in small businesses this year. The act also increases the deduction for business start-up expenses.
The Small Business Jobs and Credit Act will create jobs through a new $30 billion lending fund for small and medium sized community banks. The fund could leverage up to $300 billion in lending.
Community banks provide the credit that small businesses need to grow and create jobs. The bill includes tough performance-based incentives to make sure that these banks lend to small businesses.
Despite improving economic conditions, small businesses still are struggling to get the credit they need. According to the National Small Business Association, 39 percent of small businesses struggle to access credit.
The nonpartisan Congressional Budget Office estimates the legislation would actually save taxpayers $1 billion over 10 years, as banks are expected to pay back these funds with interest.
The act is supported by the National Small Business Association, the Small Business Majority, the Conference of State Bank Supervisors, the Independent Community Bankers of America, the American Bankers Association and the National Bankers Association.
Giffords noted that over the past 15 years, America's small businesses have created 65 percent of all new jobs. "They are a driving force in our economy and are absolutely critical to the economic recovery now underway," said the congresswoman.
Passage of the Small Business Jobs and Credit Act was strongly supported by the Independent Community Bankers of America and State Community Bank Associations. In a statement, the organizations said, "The nation's 8,000‐strong community banks are well positioned to leverage the fund and have the established relationships with small businesses in their communities to get credit flowing."
Michael Grant, president of the National Bankers Association, agreed. "The net effect of this capital investment, which will generate billions from business and personal tax revenues, can only have a reversing effect on the budget deficit," Grant said. "This is not a bailout to small and medium‐sized banks. It is, instead, a true investment in a brighter future for America's working class."
Small businesses have added about 325,000 new jobs since June 2009 when the upward trend in employment began -- and 25,000 new jobs in May alone -- according to the Intuit Small Business Employment Index.
The index, compiled by a company that provides payroll services to small businesses, is a survey of companies with fewer than 20 employees. Companies of that size employ 87 percent of the Americans who work in the private sector.
Giffords has been a strong and consistent advocate for small businesses in Congress. She also recently voted for legislation requiring the Small Business Administration to establish loan programs to support new small businesses in targeted industries, such as clean and defense technologies.