The Truth About the "Small Business Jobs" Act

To try to break up the flood of far-left, anti-Emmer and anti-Republican posts and columns dominating the Opinions page each and every day, despite the more diverse and moderate views of the paper's audience on campus, I recently sent in a letter to the Minnesota Daily. As it becomes less and less recent, I'm guessing my letter won't actually be posted in the paper. At least I can still post it here.

Passing the “Small Business Jobs” Act
And the Controversial Dispute behind It

With elections just around the corner, Democrats were looking for a way to salvage their approval ratings. Enter the “Small Business Jobs” Act, a 42 billion-dollar addition to Stimulus package legislation. The President announced, “Now the Republicans have said this is their number one concern. I’m going to call their bluff.”

With the way Democrats designed the bill, the federal government would control and subsidize a $30 billion lending fund, regulate which businesses and products were eligible, and allocate funds for the expenses it deemed appropriate. On top of that, there would be another $12 billion in tax breaks. 38 Republican senators, wary of further government expansion and spending, voted against the bill. Yet, it wasn’t because they were all hypocrites as a previous letter to the Daily on this subject assumed. In reality, the Republicans proposed dozens of amendments to help Small Businesses through regulatory tax relief, including a safety measure to relieve small businesses from upcoming tax hikes and a bipartisan proposal to remove the government cap on the amount of loans businesses can obtain from credit unions. Senate Majority leader Harry Reid refused to let these be put to a vote, claiming they were not “germane” to the bill.

John Berlau and Andrew Kwiatkowski of the Competitive Enterprise Institute commented on this in the American Spectator saying, “[I]ndeed, actually providing relief to entrepreneurs from the government's burdens may not be ‘germane’ to a bill that purports to help small business by setting up a $30 billion big-government ‘small business lending fund’ -- what National Review writer Stephen Spruiell has called ‘Son of TARP’ -- in which the U.S. Treasury buys up stakes in banks and directs them to lend to small business with an emphasis on ‘linguistically and culturally appropriate outreach.’”

The phrase “linguistically and culturally appropriate” is concerning as well. After the President’s attack on GM, can any of us really believe he won’t let politics influence lending decisions? Republicans attempted an amendment to make loans available without government control, but of course, Reid was quick to block it, confirming their concerns that this was more about government control.

Spruiell also wrote that "this is the kind of politicized bank lending that the government has encouraged for decades through laws such as the Community Reinvestment Act and through mandates requiring Fannie Mae and Freddie Mac to promote homeownership [that] actively drove the deterioration of lending standards that led to the bust."

With the real estate market seeing its highest foreclosure rate last month since the downturn, we are still feeling the ill effects of the last time the government micromanaged bank lending decisions. But, as we’ve seen with overwhelming public opposition to the Health Care bill and bloated $814 billion Stimulus, Mr. Obama won’t let trifles like the will of his constituents sway his stance on legislation.

Yet, the failure of similar measures isn’t the only reason many small businesses are voicing their disapproval. Pallavi Gogoi with the Associated Press reported that, “Bank executives say their customers don't want loans, even at low interest rates, because the sluggish economy has chilled expansion plans. Some say the federal money isn't worth it because they fear it will come with too much regulatory oversight.”

The President doesn’t appear to understand that what businesses need right now is not a pile of cash wrapped in bureaucratic tape. As Gogoi reminded us, people remain distrusting after the Troubled Asset Relief Fund (TARP), which “formed at the height of the financial meltdown to pump money into banks. Banks that accepted TARP money had to later cut dividends to shareholders and limit compensation to top executives. They were also penalized for early repayment.” He also added that, “Ninety-one percent of small business owners surveyed in August by the National Federation of Independent Business (NFIB) said all their credit needs were met. Only 4 percent cited a lack of financing as their top business problem. Plans for capital spending were at a 35-year low.”

Understanding that this bill was the right intention but the wrong approach, and realizing their attempts at compromising with amendments were being ignored, Republicans went for their last option, a filibuster. The President seized that opportunity to tell the press, “Understand, a majority of senators support the plan but Republican leaders in the Senate won’t even allow it to come up for a vote,” ironically casting the Republicans as the unreasonable ones.

Because of the Democrat majority’s blatant disregard for minority views and the President’s unprofessional and unyielding partisan stance, our representatives were once again unable to produce a bill that will bode well for the taxpayers funding it. With power clearly getting to their heads, Democrat leaders didn’t stop to realize that they weren’t just silencing and bashing members of the Congressional minority, but the citizens represented by that minority. As such, it’s going to take a lot more than this last political ploy to win the public back by November.