After the bank reform bill and the unemployment extension bill passed earlier this month, will Democrats be able to pass another economy related bill in this July session of the Congress? With the Congressional recess in August fast approaching, the Democrats are looking to pass a small business bill HR 5297, aimed at ameliorating small businesses concerns even as Republicans signalled their intention to block the bill that seeks to expand government lending programs and grant up to $12 billion in tax breaks to small businesses.
Democrats in the Senate are pushing this legislation stating that it will help small businesses get access to credit they need to create the jobs that drive the economy. Naturally, some Democrats view this small-business bill as critical to their political fortunes in November. However, Senate Republicans have been insistent on a chance to make amendments.
But Sen. Harry Reid of Nevada, the Senate majority leader immediately introduced an amendment that sought to restore the fund.
The principal bone of contention and cause of much disagreement is a proposed $30 billion lending program that would make credit available to small businesses through local banks. Some Republicans have branded the proposal as a mini “bailout” and said that the program resembled the unpopular Troubled Asset Relief Program, or TARP.
Senator Olympia J. Snowe of Maine who is the senior Republican on the small-business committee said that she is firmly opposed to the proposed $30 billion program since it resembled the huge bailout of Wall Street, the Troubled Asset Relief Program which provided $700 billion to banks to shore up the financial system.. Critics of the lending program say that it uses taxpayer money to encourage banks to take risks.
“It has all the quality and features of the TARP program,” Ms. Snowe said. “I think we’ve been down that road.”
Echoing Snowe’s concerns, Senator Bob Corker (R, Tenn.) said “I would call this ‘Son of TARP,’
In a bid to save the bill, Democrats had released a new version of the bill last Wednesday night minus a $30 billion lending program. After Sen. Reid’s efforts to block Republican’s moves to make amendments, the legislation was all set to falter with the Republicans intending to filibuster.
In a surprise move, Sens. George LeMieux (Fla.) and George Voinovich (Ohio) joined the present members of the Democratic caucus in voting for the amendment, and beat an attempted filibuster, 60 to 37. Sen. Mary Landrieu (D-La.) — a centrist Democrat and the chair of the Small Business Committee has been instrumental in bringing around the two Republicans for adding the $30 billion back to the bill.
But the bill is not out of the woods yet. The amendment needs a final majority-rules vote and the bill itself needs to achieve cloture and a final vote.
Earlier last Monday, President Obama urged the Senate to approve the bill. “We all have to continue our efforts to do everything in our power to spur growth and hiring,” he said. “And I hope the Senate acts this week on a package of tax cuts and expanded lending for small businesses, where most of America’s jobs are created.”
In addition to the lending program the package has more than $12 billion in tax breaks for small businesses, including provisions that allows for accelerated depreciation. These are essentially quicker tax write-downs of capital expenditures. The legislation also proposes a break on capital gains taxes from the sale of certain small-business stock if the stock is held for more than five years.
The bill seeks to expand several Small Business Administration loan programs, increasing loan limits as well as eliminating borrower fees in some cases. Small businesses would also be allowed to carry back general business tax credits to offset their tax bills from the previous five years.
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