The U.S. Senate today passed jobs-producing small business legislation shepherded through with the key help of U.S. Senator Maria Cantwell (D-WA). Cantwell, a member of the Senate Small Business and Finance Committees, was part of the Senate team that today won final passage, in a 61-38 bipartisan vote, of the comprehensive Small Business Jobs Act (HR 5297). The measure will reduce the federal deficit while spurring job growth through expanded access to capital and $12 billion in targeted tax incentives for small business. The fully paid-for bill will help small businesses create hundreds of thousands of new jobs through access to capital, incentives for investment, and support for innovation and entrepreneurship. Cantwell co-sponsored a key provision of the bill, the $30 billion Small Business Lending Fund, as well as a small business trade promotion provision, and a measure to aid small business government subcontractors -- all important provisions to Washington state.
"The entrepreneurial economy won today," Cantwell said at a press conference today immediately following the vote. "In Washington state, we have 140,000 small businesses. If each one of those businesses just hired one person, we would basically wipe out the job loss that we've had since the recession."
Cantwell strongly supported inclusion of the Small Business Lending Fund (SBLF), first proposed by President Obama in January. The fund will leverage $300 billion in private sector small business lending with a $30 billion public investment. The Congressional Budget Office says the program will reduce the federal deficit by $1.1 billion over 10 years as community banks repay the investment. Treasury Department Counselor Gene Sperling said at a press conference Tuesday that Cantwell was instrumental in winning passage of the lending fund: "Nobody pushed us harder to understand the connection between small banks and small business more than Maria Cantwell throughout."
"This bill is by far the most important thing we've done for our economy this year," Senator Cantwell said. "It expresses our faith in the private sector -- in the community bankers and small businesses who create jobs to get our economy moving again."
The bill includes several provisions to help small businesses access capital and make investments to grow their businesses and create jobs.
Helping Small Businesses Access Capital
· The Small Business Lending fund establishes a lending program administered by the Department of Treasury for healthy community banks with under $10 billion in assets. Banks would repay at a dividend rate that would decrease as their lending to small businesses increases. The Independent Community Bankers of America estimates that the $30 billion program would generate $300 billion in small business lending.
· The legislation raises the cap on Small Business Administration (SBA) loans to increase lending by $5 billion in the first year after enactment, and refinances commercial real estate debt into long-term, fixed-rate loans. These provisions are expected to be budget neutral and could create or save 200,000 jobs, according to the Senate Small Business and Finance Committees.
* The legislation extends the American Recovery and Reinvestment Act small business lending program that eliminates the fees normally charged for loans through the SBA 7(a) and 504 loan programs and increases the government guarantees on 7(a) loans from 75 percent to 90 percent. Since its creation, the program has supported over $26 billion in small business lending, which has helped to create or retain over 650,000 jobs.
* Allows the SBA to waive or reduce the non-federal share of Women's Business Centers or Microloan Intermediary funding requirement for up to one year from fiscal year 2012. SBA estimates the microloan program will create or save more than 10,000 jobs in fiscal year 2011.
· Reduces the tax burden for small businesses by allowing them to carry back general business tax credits to offset their tax burdens from the previous five years. Small businesses will also be able to count the general business credits against the Alternative Minimum Tax (AMT), freeing up capital for expansion and job growth.
Increasing Small Businesses' Ability to Make Investments
· Increases Section 179 expensing -- permitting up to $500,000 in capital investments that businesses can deduct immediately off of this year's taxes.
· Extends Bonus Depreciation -- allowing taxpayers to immediately write off 50 percent of the cost of new equipment.
· $12 billion in tax cuts, including 100 percent exclusion from capital gains taxes on small business investments.
· A small business trade promotion provision that leverages more than $1 billion in export capital for small businesses, creating or saving as many as 50,000 jobs across the nation in 2010.
· Increases to $10,000 the tax deduction for start-up expenditures -- doubling the current levels.
· Establishes a new State Export Promotion Grant Program (STEP), which would increase the number of small businesses that export goods to other countries.
Promoting Fairness in Competition
· Improves tax fairness by preventing small businesses from incurring large tax penalties aimed at large corporations and wealthy individuals investing in tax shelters.
* Improves small business contracting by clarifying that no single contracting program receives priority over another program when competing for federal contracts.
· Measures to aid small business government subcontractors. The bill establishes stricter federal contracting bundling requirements, ensures prompt payment of subcontractors, requires an aggressive review of SBA size standards every five years, and allows small businesses to team together to compete for large contracts. Increasing contracts to small businesses by 1 percent would create or save more than 100,000 jobs.
· Allows self-employed individuals to deduct health insurance costs for purposes of paying the self-employment tax.
Small businesses have been the hardest hit by the recession, reporting difficulty accessing lending capital to grow and hire. Approximately 81 percent of all jobs lost since the start of the recession have been from small businesses. There are 27 million small businesses in America, with 50 percent of working Americans either owning or working for a small business. In Washington state, there are more than 140,000 small businesses that have employees. Since the beginning of the recession in fall 2008, Washington state has lost some 142,000 jobs -- job loss that would be wiped out if each of those small businesses were to hire just one more employee.