House Approves Legislation to Help Small Businesses and Create Jobs
The House gave final approval today to key legislation that helps small businesses across the country get access to the credit they need to expand and hire new employees.
The legislation, the Small Business Jobs Act (H.R. 5297), is part of the ongoing effort by Congress and the Obama administration to put Americans back to work and strengthen the economy. The legislation passed the House by a vote of 237-187, and now heads to President Obama’s desk for his signature. The House first passed the legislation in June, but it was held up by Republicans in the Senate until this month.
The Small Business Jobs Act provides $30 billion in capital to community banks to help them boost lending to creditworthy small businesses looking to hire and expand their operations. The legislation is intended to help small businesses that are struggling to gain access to credit due to the financial crisis. It calls for community banks to repay the capital over time.
“This bill offers concrete help, at no cost to taxpayers, to small banks and businesses that want to collaborate to expand economic activity,” said Rep. Barney Frank (D-MA), chairman of the Financial Services Committee. “Banks’ participation is entirely voluntary. There are no possible negative consequences for the economy. I regret the fact that Republican opposition held this bill up, particularly since our Republican colleagues advanced no substantive arguments against it, but were simply engaged in a political fight to prevent the Obama administration from making progress on the economic front.”
“For over a year I have been talking to small business owners on Main Street who are ready to add jobs but cannot because Wall Street banks refuse to give them the loans they need. Their stories are the driving force behind this legislation,” said Rep. Gary Peters (D-MI). “Putting capital in the hands of our small businesses and entrepreneurs is one of the best things we can do to spur job growth. The new lending will allow small businesses to put people back to work.”
“Jobs in our community are created by businesses in our community, and providing an environment for small business growth is key to Congress’ mission to strengthen our ongoing economic recovery,” said Rep. Melissa Bean (D-IL). “Small business owners in my district and across the country tell me that access to credit remains their top barrier to growth. These initiatives – supported by the Obama Administration, the Chamber of Commerce, and other business groups – are an intelligent way to leverage taxpayer dollars into greater private investment in our small businesses.”
The legislation includes an initiative put forth by Rep. Peters to provide federal funding for state lending programs that use small amounts of public resources to generate substantial private bank financing. Such programs are designed to address many of the reasons banks are having trouble increasing lending to small businesses, including lenders’ desire to hold greater reserves against certain loans and concerns about collateral shortfalls on the part of borrowers.
The $30 billion lending facility is completely separate from the Troubled Assets Relief Program and mandates accountability and oversight by Congress, the Government Accountability Office, and the Treasury Department’s Inspector General.
The legislation also includes small business tax cuts and improvements to Small Business Administration loan programs. For more information on these provisions, visit the websites of the Ways and Means Committee and the Small Business Committee. The Committee on Financial Services approved the legislation on May 19, and the full House first approved it on June 17.