Emergency Unemployment Compensation Extension Act

Floor Speech

BREAK IN TRANSCRIPT

Mr. President, the ongoing debate on unemployment compensation shines a spotlight on the underlying problem; that is, extremely sluggish job growth in our still-lagging economy. Putting people to work is my number one goal.

As American families continue to struggle to get the jobs they need at the wages they deserve, it is more important than ever for Members on both sides of the aisle to come together on legislation to promote economic growth and job creation. Today, I am pleased to join my good friend and colleague Mr. Casey to discuss our legislation to do exactly that: the Small Business Tax Certainty and Growth Act, which we introduced last year. Our bipartisan legislation focuses on areas of consensus that both parties can embrace to rekindle opportunity by helping small employers start up or grow and create or add good-paying jobs.

It is often said that small businesses are our Nation's job creators, and the data bear that out. According to the Bureau of Labor Statistics, small businesses generated 65 percent of the net new jobs that were created between 1993 and 2009. Together, America's small businesses employ nearly half of our Nation's workers and generate half of our Nation's GDP.

Even the smallest employers have a huge impact on our economy; 18 percent of all private-sector employees work for businesses with fewer than 20 workers.

Senator Casey and I recognize that employers cannot grow and add jobs unless they have the money to invest in building and expanding their businesses. That is why our bill focuses on making it easier for them to plan their capital investments and aims to reduce the burden and uncertainty of taxation, all in the name of creating jobs.

Let me explain a few of the provisions of our bill.

First, let me start by stating the obvious: Starting a new business that can hire workers costs money. Our bill eases the tax burden on new employers by permanently doubling the deduction for start-up expenses from $5,000 to $10,000.

There are two other provisions in our bill that affect employers both large and small that we propose to extend: first, the so-called bonus depreciation, and second, the 15-year depreciation for improvements to restaurants and retail facilities. Unfortunately, these important provisions were allowed to expire at the end of last year, causing great uncertainty and thus discouraging investment and the creation of jobs.

Just think about this: The law has reverted to a provision that says that a restaurant has to depreciate its renovations over 39 years. Can you imagine a restaurant waiting to renovate only once every 39 years because it is going to take that long to write off, to depreciate the cost? The 15-year depreciation schedule for improvements is far more realistic.

Our bill also provides certainty for small employers who use section 179 of the tax code. That is the small business expensing provision. Recent studies by the National Federation of Independent Business, NFIB, which has endorsed our bill, show that the constant changes in the tax code are among the top concerns of small business owners. Indeed, I think the Senator from Pennsylvania and I have both found in talking to smaller employers in our States that they are yearning for some certainty in tax policy. They simply cannot deal with a tax code where one year the deduction is at one level, and the very next year it is uncertain whether Congress is going to renew the provision or let it expire.

The level of expensing allowed under section 179 has been unpredictable from year to year, and has changed four times in the past 7 years. This uncertainty makes it difficult or even impossible for small employers to take full advantage of this tax incentive in their long-term investment planning. Our bill would fix this problem by making the maximum expensing allowable under this section permanent at $250,000 and indexing it for inflation. We also expand the ability of small employers to use simplified methods of accounting.

Let me give a real-life example of what the small business expensing and the bonus depreciation provisions can mean. Last year I spoke with Rob Tod, the founder of Allagash Brewing Company, which is based in Portland, ME. Allagash makes some of the best craft beer in the country. In fact, Maine is known for its craft beers. Well, Rob's operation started out as a one-man show in 1995. In the 19 years since, it has grown into a firm that employs approximately 65 people and distributes craft beer throughout the United States.

Rob noted to me that his company's ability to expand was fueled in part by bonus depreciation and section 179 expensing.

New to the craft beer business, Rob had difficulty obtaining financing on favorable terms, but these cost recovery provisions allowed him to pay less in taxes in the years he acquired the equipment needed to expand his business. Those tax savings were then reinvested in his business, thus creating jobs.

Just think about that. What a difference these provisions made to this company, which has gone from a one-man operation to employing 65 people. This economic benefit is multiplied when you consider the effect of Allagash's investment on the equipment manufacturers, the transportation companies needed to haul new equipment to his brewery, the increased inventory, and the suppliers of the materials needed to brew additional beer.

We are all too familiar with the litany of polls showing how little faith the American people have in their elected leaders and how much they want us to work together to solve our Nation's problems.

I have been privileged to work with Senator Casey to do exactly that. The legislation that we have introduced is neither a Republican nor a Democratic proposal. It is, instead, a bipartisan plan to help spur America's economy, to assist our small employers, and, most of all, to create good-paying jobs. I urge my colleagues to support our bipartisan bill. I would ask our leadership to bring this legislation to restore economic growth and job opportunity to the Senate floor for action as soon as possible.

I yield to my colleague from Pennsylvania for his remarks.

BREAK IN TRANSCRIPT

Mr. President, I want to commend the Senator from Pennsylvania for his remarks. I think it is obvious that both of us have reached out to employers in our States and asked them what would make a difference. What would allow you to create new jobs, preserve the ones you have, and pay your workers more?

To a person, they identified provisions in the Tax Code, the uncertainty that occurs when they expire, the difficulty to plan and to hire new workers when you do not know what the Tax Code is going to be. That formed the basis for our bipartisan bill. We listened to what employers were telling us. I hope more of our colleagues will help us bring this bill to the Senate floor.

Every day that I am talking to an employer in Maine, I am asked: Are the provisions that expired at the end of last year going to be renewed? Will they be retroactive? Can we count on them?

They put their hiring plans on hold until we give them the certainty that they deserve. So, again, it has been a great honor to work with my colleague. I do urge our leaders to bring this important bill to the Senate floor.

BREAK IN TRANSCRIPT

Source