Providing for Consideration of Senate Amendment to H.R. 5297, Small Business Jobs Act of 2010

Floor Speech

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Mr. Speaker, House Resolution 1640 provides for consideration of the Senate amendment to H.R. 5297, the Small Business Jobs and Credit Act of 2010. The rule makes in order a motion by the chair of the Committee on Financial Services to concur in the Senate amendment. The rule waives all points of order against consideration of the motion and provides that the Senate amendment and the motion shall be considered as read. The rule provides one hour of debate on the motion controlled by the Committees on Financial Services, Small Business, and Ways and Means.

The rule also allows the Speaker to entertain motions to suspend the rules through the legislative day of October 1, 2010. Finally, the rule waives clause 6(a) of rule XIII which would allow for same day consideration through Friday, October 1, of any measure reported from the Committee on Rules.

Mr. Speaker, today the House considers a tremendously important piece of legislation that provides long-overdue assistance to the millions of small businesses in our country. The Small Business Jobs and Credit Act of 2010 grants immediate tax relief to small business owners, increases access to much-needed capital, and enhances the ability of small businesses to export goods overseas.

Today, the House delivers on a promise it made to small businesses. With the passage of this bill, small businesses, the backbone of our economy, will be given the tools and relief they need to expand their companies, to create more jobs and to help this Nation recover from the worst economic recession in decades.

Mr. Speaker, this bill provides more than just assistance for short-term economic recovery, which it accomplishes by increasing the amount of money that banks can lend to small businesses, by eliminating certain Small Business Administration loan fees, and by giving States the increased flexibility to manage their own small business lending programs.

This bill is also a blueprint for new and long-term job creation. We have heard the pleas from entrepreneurs and small business owners in our districts, and we closed the legal loopholes which gave multinational corporations an advantage in securing government contracts over HUBZone, 8(a), service-disabled veterans, and women-owned businesses. Everyone is now on a level playing field when it comes to competing for Federal contracts.

Perhaps the most important provision in this bill is the increased access to credit. As a small business owner myself, I know how difficult it is to make ends meet. When I first started my business, long before the credit crunch hit, fortunately I was able to work with a small community bank that was in a position to give me access to capital that was critical to getting my company up and running.

Today, not all small businesses are so fortunate. No one was harmed more in the credit market collapse than small businesses. Throughout my home State of Maine, the stories I hear each week are the same:

"They say the economy is getting better, but I still can't get the capital I need to make payroll or rehire those employees I was forced to lay off, much less think about expanding."

This bill changes that by providing real relief at the same time small businesses need it the most.

The benefits are not theoretical. This isn't wishful thinking. We know that increasing the 7(a) loan limits from $2 million to $5 million, that increasing the 504 loan limits from $1.5 million to $5.5 million and that increasing the 7(a) Express Loan limits from $300,000 to $1 million will produce growth and jobs in communities all over our country.

In July, the owner of Mount Desert Island Ice Cream, a small business in Bar Harbor, Maine, wrote to me to share her incredible success story. Despite the turbulent economy, she expanded her business and created 10 new jobs this summer because of a Recovery Act ARC loan.

She explained if it weren't for the access to new capital, she wouldn't have been able to expand from two stores to three. She was able to use the Federal loan to manage the debt burden on her existing store locations, which freed up her cash flow, letting her expand.

The results were a mini-economic boom in Portland. Mount Desert hired a staff of 10. It employed contractors and suppliers to retrofit the new store, and it buys more and more ingredients from local Maine producers, all because she had access to government-backed loans.

I will say it obviously didn't hurt, Mr. Speaker, that business is also booming because her store sells really, really good ice cream. I think President Obama even got to enjoy a scoop or two when he went to Maine this summer.

You know, I held a workshop in my district at the height of the recession in June of 2009, before the Recovery Act loans were available; and I invited small business owners from across Maine to attend. The response, frankly, was overwhelming. Hundreds of small, struggling businesses came because they had nowhere else to turn. They needed help to stay afloat and to meet their payrolls. They were adamant that loan limits were insufficient and that lending had dried up.

In Maine, fishermen who run small businesses need capital for boat repairs--to replace gears and engines. Some of our fishermen are having a particularly difficult time gaining access to funds because they are already heavily in debt for their boats and permits, making it difficult for lenders to assess their levels of risk and exposure. Worse, fishermen who want to purchase and increase processing capacity to boost prices for the catches they receive face enormous difficulties in purchasing the facilities they need to process multiple species at once.

One Maine fisherman explains it to me this way: ``The main problem is that, when most of us took out loans for our businesses, it was some time ago, and we could operate like a normal business. Now the struggle is getting even harder. Banks that I have dealt with do not seem to realize or care that things are different, and they still have fairly rigid rules that are based in the past about financing these operations. They pretty much laugh us out of the room now when they see the income from the last few years, mostly due to a lack of price for the fish we catch. We need some kind of low-interest loan program with very affordable payments if we are to keep the fleet in Maine until rebuilding occurs.''

The loan guarantees included in this bill will make it more attractive for local lenders with the experience and know-how to provide access to the financing to our Nation's small business owners, and the reduced fees will make it more affordable for small businesses to grow, expand, and create jobs. This is why those at SBA support this bill, because they are able to work closely with lending institutions to assist our small businesses.

Mr. Speaker, the recovery is under way, but we are certainly not out of the woods yet. Unemployment in my home State of Maine is about 8 percent. That means almost 56,000 Mainers are out of a job. Passing the Small Business Jobs and Credit Act will provide much needed help. If the number of Maine small businesses with fewer than five employees added just one employee, then we could cut unemployment in half in our State. If every small business in Maine hired one more person because of the benefits in this bill, then we would certainly be on the road to recovery.

This bill will also stimulate long-term job growth, once the economy is back on track, by implementing provisions that small businesses have long sought:

There are numerous tax benefits that will entice rather than discourage our budding entrepreneurs from starting their own businesses;

This bill will allow a taxpayer to deduct up to $10,000 in trade or business start-up expenses, an amount currently capped at $5,000. Allowing owners to keep more money and to reinvest it in their companies at the outset, as they work to grow and expand their businesses, is critical;

This bill also allows owners to write off up to $500,000 in capital expenditures in 2010 and 2011, subject to a phase-out when they exceed $2 million. It also eliminates all capital gains taxes on certain small business investments for the 2010 tax year. For owners who have held off on hiring or making significant investments in their businesses, these tax provisions will allow them to act this year or next instead of continuing to wait;

When it comes to competing for Federal Government contracts, we level the playing field for small businesses by closing loopholes that previously gave large companies a built-in advantage in seeking those contracts;

We require a regular review of size standards to make sure that small businesses that are fortunate enough to expand don't retain an advantage over their smaller competitors in competition for small-business-only contracts;

We treat those in the aquaculture industry on par with other small businesses, and we make those companies eligible to receive SBA economic injury disaster loans.

Could this bill be better? Of course it could, but small businesses demand our help now. They can't wait, and we have an obligation to act swiftly to pass this bill today to make good on our promise to reward innovation, to loosen outdated limits on lending, and to encourage entrepreneurs to go to the SBA for help in starting and building their own businesses.

I look forward to the passage of this critical bill.

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