We now know what earlier we had only suspected--that this recession has been one of the worst in history. Two years ago, we were losing 750,000 jobs a month. The situation has improved somewhat from the darkness of those times--we have been gaining jobs in the private-sector for each of the past 15 straight months. Nonetheless, the unemployment rate is still above 9 percent and job growth is still terribly inadequate.
Small businesses have powered the country out of every recession in our history. They have always been the true engine of growth in challenging times. Unfortunately, businesses are currently suffering from taxes that stifle innovation and growth, a complex regulatory code and the accelerating cost of health benefits. They are also having difficulty accessing the capital they need to make new hires and invest in new equipment. Large businesses and banks have huge cash reserves, but they are waiting to see a consistent economic recovery before investing in workers and businesses again. By enacting tax and regulatory relief, as well as improving access to capital for small businesses, we can help small businesses lead our way into a sustainable and lasting recovery.
For this reason, Congressman Schiff has been fighting to enact tax deductions for small businesses that can be used for start-up expenses, to eliminate payroll taxes for new hires, and to do away with capital gains taxes for the purchase of small business stock. Through these efforts, small businesses can begin growing and adding jobs again. Schiff has supported the Small Business Jobs Tax Relief Act, which increases the amount of startup expenses that small businesses are allowed to deduct from $5,000 to $20,000. The Small Business Jobs Tax Relief Act will help entrepreneurs in the vital early days as they try attract the capital they need to launch new companies.
Schiff also voted for the HIRE Act, which will forgive payroll taxes for businesses that hire individuals who have been out of work for at least two months. Businesses that hire workers today will see a larger tax credit than those that wait until next year. This is designed to further encourage small business owners that might be struggling with the decision of whether to hire a new employee now. The HIRE Act also encourages businesses to make new investments in equipment by providing tax incentives. This legislation received bipartisan support and has now been signed into law by the President.
Schiff is also working to remove burdensome regulation for small businesses. U.S. tax law requires businesses to submit a Form 1099 for every contractor paid at least $600 for services during a year. This requirement usually does not apply to corporations receiving payments, but this exemption will be phased out beginning in 2012. This change would require a small business owner to fill out a Form 1099 every time the owner completed a sale or series of sales that totaled more than $600 in revenue in a given year, driving up the cost of doing business and wasting valuable time for the owner. Schiff voted for the Small Business Tax Relief Act, which would repeal this provision and he will continue to work to ensure that this fix gets passed.
Schiff is also acutely aware of the difficulties that small businesses have experienced in obtaining credit and believes we must make credit easier to obtain if small businesses are going to fuel the country's economic recovery. Schiff supported the Small Business Financing and Investment Act, which will modernize the SBA's capital access program for the first time in ten years. It will unlock lending and investment for small business owners, providing $44 billion annually in loans and investments to small businesses and will help to create up to 1.3 million jobs every year.
Schiff has also supported legislation that would establish a $30 billion Small Business Lending Fund to make capital investments in community banks with assets less than $10 billion. This would allow the banks to leverage up to $300 billion in loans, helping to loosen tight credit markets and get businesses expanding again. That legislation has now passed the Senate, and Schiff hopes we can send it to the President shortly.
Providing tax and regulatory relief and improving access to capital are steps that we need to take in the short term to get the economy moving again. Over the long term, Schiff believes we must ensure that America continues to nurture the spirit of entrepreneurship that has encouraged new businesses, new technologies and new ventures to be born here. We now live in an interconnected global business environment, with competition arising all over the world. Schiff believes we need to compete for economic leadership by being the most inventive, ingenious and productive people on earth. We cannot compete with the developing world on wages, and we don't want to try. But we can and must ensure that we continue to be the most productive nation in the world if we are to maintain our quality of life. Critical to this effort is ensuring that America produces an educated workforce second to none.
Schiff believes we must also invest in the future, making the much needed investments in infrastructure that will efficiently transport more goods and people, and create jobs. He has worked with Los Angeles Metro to ensure that the groundbreaking on Phase 2A of the Gold Line to Azusa occurred several years ahead of the schedule called for in Measure R, because the line needed to be extended into the San Gabriel Valley as soon as possible. Construction would create nearly 7,000 jobs and $1 billion in economic activity.
Schiff also introduced the Build America Bonds Extension Act of 2011, which extends the popular Build America Bonds program that has helped the state of California and countless municipalities and school boards across the state finance infrastructure projects, creating much needed jobs in the hard-hit construction industry in the state.
Schiff knows that the creativity and ingenuity of the American people will pull us out of this recession. He will be doing all he can to return our country to prosperity, and hopes constituents will continue to share their thoughts and ideas with him on how we can accelerate a shared and sustainable economic recovery.