As expected, the U.S. Senate approved on Sept. 16, 2010, legislation designed to give an economic boost to small businesses through tax breaks and easier access to credit.
The Small Business Jobs and Credit Act of 2010 (H.R. 5297) had been stalled in the Senate for a couple of months as Democrats and Republicans debated the best way to provide aid to small business owners and to boost the country’s faltering economic recovery. The economic aid package includes nearly $12 billion in tax relief for small businesses and a new $30 billion lending fund. If the aid package is enacted, the U.S. Treasury Department would administer the new funds and distribute the money to small banks, which qualify for the funds by promising to extend loans to small businesses.
Republican leaders in the Senate oppose the new loan program and call it a revised version of the controversial Troubled Assets Relief Program—also known as TARP.
“The bill had the mini-TARP in there, with no real help to small businesses as far as I'm concerned,” Sen. Orrin Hatch, R-Utah told reporters after the bill’s passage.
Republican Senators George Voinovich of Ohio and George LeMieux of Florida jumped party ranks and joined with the Democrats in voting for legislation. Voinovich said in a statement that he agreed to support the bill because small business owners throughout the U.S. were “really hurting” and needed new tax breaks and access to credit to survive.
Democratic leaders estimate that the legislation if signed into law would create as many as 700,000 new jobs. Opponents of the measure disagree with the estimate and claim that the $30 billion lending program is nothing more than another bailout for banks and would do little to help small business owners.
The legislation will move back to the House of Representatives, which approved a similar measure in June 2010. Sources familiar with the issue say the House could begin debate on the bill soon and most likely could pass the Senate-approved version of the measure by Sept. 24, 2010. President Barack Obama has been actively encouraging Congress to approve the legislation and said that he would sign it into law.
Bill Leonard is senior writer for SHRM.
Economic Recovery and Jobs Will Be Top Priorities for Congress