Economic Recovery Act

Floor Speech

ECONOMIC RECOVERY ACT -- (Senate - November 19, 2008)

Mr. SCHUMER. Mr. President, I rise to speak about the Economic Recovery Act, which is a comprehensive stimulus package. We need it. Our Nation needs this. It is a much needed shot in the arm for our ailing economy. When the economy is ailing, there are two choices: We can choose the path of, say, Herbert Hoover and say: Government should not be involved, let an ideological straitjacket tie us up--We know what happened then--or we can choose the course economists on the left, the middle, and the right have said we should choose, which is we need a major stimulus package to get the economy going.

I would have hoped we would have made the choice to help this economy and help the millions of Americans who are worried. Hundreds of thousands have lost their jobs, millions more are worried about losing their jobs, and tens of millions see every week that the paycheck does not stretch as far as it did.

We face an economic crisis of a scale and scope that we have not experienced in 25 years, if not longer. By every measure we are headed toward a cliff. We are in the midst of the greatest housing crisis since the Great Depression. Unemployment has been rising rapidly and is expected to hit levels we have not seen at least since the early 1980s.

States and localities face massive budget shortfalls that may force them to raise property taxes unless Federal assistance is delivered. Families are running harder just to stand still, seeing their incomes shrink while their costs, especially their food and energy costs, are far greater than they were 1 year ago.

The credit contraction that has spread from the financial system to average households has pummeled American businesses in every part of the country, businesses big and small. Not even the most optimistic among us can argue that our economic problems will take care of themselves.

The question before us is: What are we, as stewards of the public trust, going to do? I believe the answer is clear: The Federal Government should, it must, provide an economic stimulus to Main Street as we have to Wall
Street. It must be significant and substantial and it must be targeted at our most pressing needs.

The plan before us does that. It will prime the pump of America's job machine, by fast-tracking $13.5 billion of investment into our Nation's infrastructure which forms the bedrock of our economy. It will help the States avoid the difficult decision to raise property taxes; you cannot do that now. But some of them may have no choice because they have budget shortfalls. But we can avoid that terrible choice by delivering $40 billion in emergency fiscal aid through the FMAP.

The stimulus package before us will jump start renewable energy production by making major investments in the technologies that will not only help America become energy independent but will make us a global leader in the next generation of fuel-efficient vehicles.

Importantly, this bill will also resuscitate small business lending. We all know small businesses are the engine of our economy. But small businesses have been overlooked in the financial rescue efforts to date.

So working with my friend and colleague from Massachusetts, Senator Kerry, we have worked to include provisions in this stimulus package that will throw our small businesses a life vest to weather this storm so they can emerge from it as leaders in job creation.

Small businesses generally rely heavily on loans from banks to build inventory, meet their payroll consistently, and fuel the growth of the business. These loans have all but dried up, threatening the survival of car dealerships, mom-and-pop pharmacies, restaurants and shops all across the Nation.

The Federal Reserve recently reported that 75 percent of domestic banks said they had tightened their lending standards for small-business loans, 75 percent. At the same time, 70 percent of the lenders told the Fed that they would charge more for those loans. According to the New York Times in an August opinion poll, two-thirds of entrepreneurs told the National Small Businesses Association that their companies had been hurt by the credit crunch.

Traditionally, Small Business Administration loans have filled this gap. But chronic underfunding of the SBA under the Bush administration and its outdated fee structure have greatly reduced lender participation and undermined the valuable function that SBA lending could play during this credit crisis.

In October alone, the number of loans made under SBA's largest loan program dropped over 50 percent compared to the same month last year. So the economy desperately needs this shot in the arm.

And SBA's loan program is cut in half. What foolishness. Why do we not change it? That is why Senator Kerry and I fought to include in the economic stimulus package provisions that will modernize the SBA and jump start lending to small business.

Our bill provides $615 million to support $22.5 billion in zero-fee loans to small businesses under the 7A and 504 programs. Providing zero-fee loans will deliver needed relief to small business on Main Street during Wall Street's financial crisis.

The bill also provides $1 million to support $10 million in new microloans for small businesses and $4 million for critical technical assistance for these new ``micro'' borrowers.

In sum, our Nation needs this stimulus package, not just for the small businesses or the large businesses across the Nation but for the American families who have faced devastating hits to their wealth and economic security. We need to build a platform from which we can emerge from this credit crisis as a global leader in energy and innovation and high-paying job creation. I strongly urge the passage of this proposal.

I yield the floor and suggest the absence of a quorum.

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