Small Business Group Responds to President Obama's State of the Union

/PRNewswire -- In response to President Barack Obama's State of the Union address, the nation's leading organization dedicated to promoting entrepreneurship and protecting small business issued the following response:

"Entrepreneurs are heartened to hear that President Obama wants to make the U.S. the best place on earth to do business. Indeed, across the globe, nations are cutting taxes, simplifying their tax systems and reducing regulations to make it easier to start up and grow a business. Developed and emerging countries alike have quickly adapted to the competitive environment and are reaping rewards in their aggressive efforts to attract capital and business investment. President Obama has awoken to this realization, and mere rhetoric alone will not change the competitive dynamic. Entrepreneurs and investors must now see dramatic changes on the policy front. This means, immediately locking in a pro-growth tax system, restraining the regulatory tide that is sweeping over every sector of our economy and reducing government spending," said Small Business & Entrepreneurship Council (SBE Council) President & CEO Karen Kerrigan.

SBE Council chief economist Raymond J. Keating added: "While the President's pro-business rhetoric is encouraging, other specifics in his speech were disappointing. First, his explicit call for a tax increase on upper-income earners showed that he still fails to grasp that such a tax hike on entrepreneurs and investors would be bad for the economy. Second, his call, in effect, for higher taxes on oil companies in order to subsidize other energy sources reveals a desire for politics to overrule markets, with the result being higher costs in the end. And third, he took one step forward on trade, by urging Congress to approve the South Korea trade deal, but two steps back by failing to push ahead now with the Panama and Colombia accords."

Kerrigan concluded: "We look forward to working with President Obama and Congress in the critical areas of reducing regulation and simplifying the tax system. Leadership and action are desperately needed on these issues if the U.S. is to become more competitive in the global economy. Furthermore, small business owners have substantive ideas for improving the health care overhaul bill that was enacted into law. We only hope the Administration will listen to our solutions this time around."

SBE Council is a nonpartisan, nonprofit advocacy and research organization dedicated to protecting small business and promoting entrepreneurship. For more information, please visit: www.sbecouncil.org .

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President Obama Goes Back on Campaign Promise with Jobs Bill

/PRNewswire/ -- The Small Business Jobs Act being pushed by President Obama contains a loophole that will legalize contracting fraud while protecting large fraudulent businesses from prosecution, and stands in stark contradiction to a campaign promise made by President Obama.

In February of 2008, President Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php) President Obama made this statement to address ongoing fraud and abuse in federal small business contracting programs that cost small businesses over $100 billion a year in missed contract opportunities. Federal law currently mandates that a minimum of 23 percent of all federal contract dollars go to small businesses.

Since 2003, there have been over a dozen federal investigations, which have found Fortune 500 firms and thousands of large companies around the world as the actual recipients of federal small business contracts. The Small Business Administration's (SBA) Inspector General has listed this problem as the number one management challenge facing the agency for the past five consecutive years and referred to this problem as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." (http://www.asbl.com/documentlibrary.html)

Section 1341 of H.R. 5297, the Small Business Jobs Act, contains specific language that will allow the SBA to develop policies and procedures to protect large businesses that have misrepresented themselves as small businesses from prosecution for felony contracting fraud. Section 16(d) of the Small Business Act prescribes a penalty of up to ten years in prison and a fine of not more than $500,000 per occurrence for firms that have misrepresented themselves as small businesses.

Some of the firms that have received government small business contracts include: Rolls-Royce, British Aerospace (BAE), Lockheed Martin, Boeing, Northrop Grumman, L-3 Communications, SAIC, Titan Industries, Raytheon, Dell Computer, Xerox, French firm Thales Communications, Italian firm Finmeccanica SpA, and Ssangyong Corporation headquartered in Seoul, South Korea. Textron, a Fortune 500 firm, received over $775 million in federal small business contracts in a single year.

"It is unbelievable that President Obama is going to create a loophole to benefit the corporate giants he promised to kick out of federal small business contracting programs," ASBL President Lloyd Chapman said. "When you see President Obama on television, I want every American to realize that his administration is giving over $1 million a minute in small business contracts to some of the largest companies in the world."

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Snowe, Landrieu Introduce Legislation to Bolster Small Business Participation in International Trade

/PRNewswire/ -- U.S. Senate Committee on Small Business and Entrepreneurship Ranking Member Olympia J. Snowe (R-Maine) and Chair Mary L. Landrieu (D-La.) last night introduced two bipartisan measures to strengthen and improve support for American entrepreneurs seeking opportunities to expand their business, create new jobs and compete in the international market. The Small Business Export Enhancement and International Trade Act (S. 2862) and the Small Business Trade Representation Act (S. 2861) will ensure small businesses have access to the resources and tools needed to explore new export opportunities in emerging markets or expand their current export business.

"Small businesses face particular challenges in exporting, and the bills that Chair Landrieu and I have introduced will take great strides toward ensuring their greater participation in international trade," said Ranking Member Snowe. "By improving and bolstering critical Small Business Administration (SBA) lending and assistance programs, we will be giving our nation's entrepreneurs a helping hand in surviving, diversifying, and competing effectively in the international marketplace. Additionally, the Small Business Trade Representation Act would once and for all establish an Assistant United States Trade Representative for Small Business, a critical position that will help ensure American small businesses are at the forefront of trade policy considerations."

"Building upon legislation that I have introduced in the last three Congresses, including, S. 1196 the Small Business International Trade Enhancements Act of 2009 that I introduced in June of this year, this bipartisan legislation will ensure that small businesses seeking to export their goods and services will have access to the resources they need to successfully expand into foreign markets," Chair Landrieu said. "With health premiums increasing more each year and cash registers at home not ringing like they used to, exporting has become a practical solution for small firms. Expanding opportunities for small business trade is not only vital to the financial security of our entrepreneurs, it is vital to the recovery of our economy."

The Small Business Export Enhancement and International Trade Act contains several crucial provisions, including ones to:

-- Establish an SBA Associate Administrator for International Trade to
carry out the Agency's international trade programs and formulate its
trade and export policy;
-- Bolster the number of SBA export finance specialists assigned to
Export Assistance Centers;
-- Raise, from $2 million to $5 million, the maximum amount of an
International Trade Loan or Export Working Capital Program loan;
-- Establish in statute an Export Express program and expand the maximum
loan size from $250,000 to $500,000; and
-- Create a State Trade and Export Promotion (STEP) Grant Program to
increase the number of small businesses that export and increase the
value of the exports by small businesses.


Additionally, the Small Business Trade Representation Act would create an Assistant United States Trade Representative for Small Business whose responsibility would be to ensure that small businesses are represented in trade negotiations and in U.S. trade policy.

The provisions in these bills come from both S. 1208, the Small Business Export Opportunity Development Act, introduced by Senator Snowe, and S. 1196, the Small Business International Trade Enhancements Act of 2009, introduced by Senator Landrieu.

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Snowe, Landrieu Introduce Legislation to Make Permanent Critical Small Business Tax Deduction

/PRNewswire/ -- U.S. Senate Committee on Small Business and Entrepreneurship Ranking Member Olympia J. Snowe (R-Maine) and Chair Mary L. Landrieu (D-La.) today introduced legislation to make permanent the enhanced Section 179 expensing limits enacted in the American Recovery and Reinvestment Act (ARRA). Specifically, the bill will aid small businesses by allowing them to deduct up to $250,000 of the cost of qualifying property in the year it is purchased, rather than to recover such outlays through depreciation deductions over a number of years.

"Small businesses continue to struggle as a result of the current recession, and many are having trouble finding capital to make job-creating new investments," said Ranking Member Snowe. "Our bill will permanently allow small businesses to expense up to $250,000 of new investments, enabling them to acquire vital new facilities and equipment. By permitting small businesses to deduct more of their equipment purchases today, they will retain substantial savings instead of waiting a period of years to recover their costs through depreciation. Additionally, this change would simultaneously save small firms the vital time currently required to comply with complex and confusing depreciation rules."

"The $250,000 expensing limit put into place in the Recovery Act has produced a positive economic impact for the nation's small businesses," Chair Landrieu said. "By making this limit permanent, small business owners will have a valuable incentive to make investments in business assets critical to business growth and important to remaining competitive in the global marketplace."

The ARRA signed into law in February set the maximum amount that a taxpayer may expense in 2009 at $250,000. Subsequently, under current law, the maximum amount that may be expensed will be approximately $133,000 in 2010 and $25,000 in 2011. The Snowe-Landrieu bill would permanently set the maximum amount at $250,000.

Ranking Member Snowe has previously introduced legislation to raise the expensing limit to $200,000 in both 2007 and 2008. Both she and Chair Landrieu successfully advocated for the language that was included in the ARRA.

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Democratic Senators Discuss Reforms for Small Business Health Care

/PRNewswire/ -- Five Democratic Senators today gave back-to-back speeches on the Senate floor discussing the need to focus on small businesses when considering health care reform. Without the right reforms, small businesses will pay nearly $2.4 trillion over the next ten years in health care costs for their workers, according to a report by the Small Business Majority. The Senators made the following comments:

"Without the worry of high health costs, small businesses will be able to get back to what they do best: creating jobs, encouraging entrepreneurship, growing our economy and keeping our nation competitive in the global arena," U.S. Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu of Louisiana said. "Today, it is more important than ever for us in Congress to work together to bring about these needed health care reforms and help small businesses."

"If we do nothing, small businesses are going to see this escalator of costs go up for health insurance. Small businesses should be able to negotiate with insurance companies to drive down the costs of their health plans," Sen. Maria Cantwell of Washington said. "That's why we need to give small business the same kind of negotiating power that large companies have to negotiate for benefits."

"Small businesses are essential to our economy, and we must control health care costs and relieve the financial burden facing so many small businesses in New Hampshire and across the nation," said Sen. Jeanne Shaheen of New Hampshire. "I urge my colleagues to work together to pass comprehensive health reform legislation because employers should not have to choose between keeping their doors open and offering health care to their employees."

"If we do not pass health insurance reform, small business owners will continue to see the cost of providing healthcare coverage to their employees eat away at their bottom line. In my home state of Colorado, premium costs for small businesses are projected to more than double over the next decade," Sen. Udall of Colorado said. "These unsustainable cost increases not only harm current businesses, but they also prevent the growth of new ones. Enacting meaningful health reform is necessary for ensuring productive small businesses, new American jobs, and a strong economy."

"Today, small businesses are the only group who still pay retail for their health care coverage," said Sen. Mark Warner of Virginia. "With fewer employees, they lack the bargaining power of large firms and pay as much as 18 percent more for the same health insurance as larger companies. But if we do health care reform right, it will give small businesses and their employees more affordable options."

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Democratic Senators, Congresswoman, Small Business Owners Discuss Impact of Health Insurance Reform on Small Businesses

/PRNewswire/ -- Democratic Senators Tom Harkin and Mary Landrieu and Congresswoman Debbie Halvorson joined Mike Draper, a small business owner from Des Moines, Iowa; Gwendolyn Barnes, a small business owner from Shreveport, Louisiana; Dr. Ken Brantley, a small business owner from Richmond, Virginia; and other small business owners from across the country at a press conference this morning to discuss how health insurance reform will benefit small businesses. Recent studies indicate that small businesses are likely to see their premiums rise 15% in the coming year, double the rate of last year's increase. Small businesses employ roughly 40% of the private labor force in America, making it crucial that we work to ensure affordability of health coverage for this central part of the American workforce.

"The status quo in health insurance spending for America's small businesses is intolerable and it is unsustainable," said Harkin. "Today, we have a simple message for small business owners across America: help is on the way and it comes in the form of a health reform plan that puts a stop to the discriminatory insurance industry practice of jacking up premiums for small businesses by up to 200 percent when an employee gets sick or because the business hires a woman. Our bill will end the practice of denying coverage based on preexisting conditions or increasing premiums based on health status, gender, or industry. As I have said many times, the biggest winners in a reformed health system will be small business owners and their employees."

Landrieu said: "Small businesses are suffering from skyrocketing health insurance premiums that are eating into their bottom lines and threatening their survival. As we continue to make progress toward comprehensive health care reform, Democrats are working to address the health care needs of small businesses. And while we may not yet completely agree on everything, one thing we can all agree on is that doing nothing is simply not an option."

"Small businesses are the backbone of our economy, and right now health care costs are simply too much to bear," said Halvorson. "If we truly want our small businesses to help lead us out of our current economic troubles, we must act to reform health care. Small business owners and their employees are depending on it. We must act now."

Draper said: "We try to be flexible, but it's an expensive way to do it. Right now, health insurance is a volatile commodity such as oil -- the price swings, the price increases, and it takes up a larger portion of a company's budget. If the government were to provide a more stable option and take the market out of things, it would help settle business's books, it would help them better predict the future. As a business owner, I wouldn't have to worry about finding policies, knowing what is covered, what isn't covered and how much the company will end up paying."

"We started off with everybody on a group plan, but as the premiums continued to climb and climb, my employees had to start dropping out, so we switched to individual plans," said Barnes. "But one of my employees was denied for a pre-existing condition. And we've had trouble with the insurance company -- when my daughter needed a surgery, they mysteriously took her off the surgery schedule. That's not right. It's time to fix health care -- for small businesses like mine and for the communities we serve."

Brantley said: "The lack of affordable health insurance hurts millions of small-business owners like me. I would love to hire several highly skilled staff to work with me. This would balance the workload, expand our care, and create more jobs. It is virtually impossible, however, to find qualified applicants who will accept a job offer without health insurance benefits. The high cost of health care hurts my ability to create new jobs here in Virginia and retain skilled employees. Without competition and meaningful health care legislation, we will continue to see rising health insurance premiums each year that harm businesses and squeeze families."

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Rural America's Opposition Grows to Speaker Pelosi's National Energy Tax

As House Democrats scramble for votes for Speaker Pelosi’s national energy tax on anyone who drives a car, buys an American-made product, or flips on a light switch, opposition among family farmers and small businesses in rural America continues to grow stronger. That’s because, as Agriculture Committee Ranking Republican Frank Lucas (R-OK) noted during a hearing earlier this year, rural Americans would be disproportionately impacted by this burdensome, jobs-killing tax. They travel 25 percent further than urban residents to go to work and run errands. They spend 58 percent more on fuel than urban residents as a percentage of their income. And electricity is far more costly to deliver to rural households than to urban homes across America. The end result: if Speaker Pelosi’s national energy tax becomes law, rural Americans will pay much, much more. Here is just the latest collection of groups that are opposing Speaker Pelosi’s national energy tax because of its consequences for family farmers and small businesses:

Agribusiness Association of Iowa
Agricultural Retailers Association
Agrium Inc.
Alabama Farmers Federation
American Agri-Women
American Farm Bureau Association
American Farmers & Ranchers
American Frozen Food Institute
American Meat Institute
American Plant Food Corporation
AmeriFlax
Associated Industries of Florida
Beck’s Superior Hybrids
Brandt Consolidated
CF Industries
Chemical Industry Council of Illinois
CHS Inc.
Corn Producers Association of Texas
D.B. Western, Inc.
Far West Agribusiness Association
Florida Chamber of Commerce
Florida Farm Bureau Federation
Florida Fertilizer & Agrichemical Association
Florida Strawberry Growers Association
Food Industry Environmental Council
GROWMARK
Hardee County Farm Bureau (FL)
Hillsborough County Farm Bureau (FL)
Illinois Fertilizer & Chemical Association
Indiana Beef Cattle Association
Indiana Farm Bureau
Indiana Grain & Feed Association
Indiana Grain and Feed Association
Indiana Office of Energy Development
Indiana Plant Food & Ag Chemicals Association
Indiana Plant Food & Agricultural Chemicals Association
Indiana Pork Producers Association
Indiana Professional Dairy Producers
Indiana State Department of Agriculture
Indiana State Poultry Association
International Raw Materials, Ltd.
J.R. Simplot Company
Kansas Agribusiness Retailers Association
Kansas Grain and Feed Association
Minnesota Agri-Growth Council
Minnesota Corn Growers Association
Minnesota Crop Production Retailers
Missouri Agribusiness Association
Missouri Farm Bureau
Montana Agricultural Business Association
National Chicken Council
National Corn Growers Association
National Grain and Feed Association
National Grange
National Meat Association
National Pork Producers Council
National Turkey Federation
NCRA
National Cattlemen’s Beef Association
Nebraska Agri-Business Association
Nebraska Farm Bureau
New Mexico Peanut Growers Association
North Carolina Peanut Growers Association
North Dakota Agricultural Association
North Dakota Barley Council
North Dakota Farm Bureau
North Dakota Grain Dealers Association
North Dakota Grain Growers Association
North Dakota Soybean Growers Association
North Dakota Stockmen’s Association
North Dakota Wheat Commission
Northern Canola Growers Association
Northern Pulse Growers Association
Ohio Corn Growers Association
Ohio Farm Bureau
Ohio Poultry Association
Ohio Wheat Growers Association
Oklahoma Ag Retailers Association
Oklahoma Grain & Feed Association
Oklahoma Peanut Commission
Oklahoma Seed Trade Association
Oklahoma Wheat Growers Association
Panhandle Peanut Growers Association
Peace River Valley Citrus Growers Association
Peanut Growers Cooperative Marketing Association
Polk County Farm Bureau (FL)
PotashCorp
Rocky Mountain Agribusiness Association
Sarasota County Farm Bureau (FL)
Society of American Florists
South Carolina Fertilizer & Agrichemicals Association
South Carolina Peanut Growers Association
South Dakota Agri-Business Association
South Dakota Farm Bureau
South Dakota Grain & Feed Association
Southern Crop Production Association
Southwest Council of Agribusiness
Terra Industries Inc.
Texas Agricultural Cooperative Council
Texas Farm Bureau
Texas Grain & Feed Association
Texas Peanut Producers Board
Texas Sheep & Goat Raisers Association
Texas Wheat Producers Association
The Andersons, Inc.
The Fertilizer Institute
The McGregor Company
Todd Staples, Commissioner, Texas Department of Agriculture
Tom Farms (Kip Tom, CEO)
United Egg Producers
Virginia Peanut Growers Association
W.B. Johnston Grain Co.
Western Peanut Growers Association
Western Plant Health Association
Wyoming Stock Growers Association


House Republicans believe there is a better way – one that can lower energy costs, create jobs, and clean up the environment in rural America and everywhere else. Led by Rep. Mike Pence (R-IN), the House GOP American Energy Solutions Group has crafted the American Energy Act to increase environmentally-safe energy production; promote alternative fuels to reduce carbon emissions; and encourage increased efficiencies and technologies to maximize America’s energy potential. When will Democrats listen to family farmers and small businesses and work with Republicans on real bipartisan solutions to secure a cleaner, more reliable energy future?

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Landrieu, Snowe Comment on White House Plan to Unlock Frozen Credit Market and Stimulate New SBA Lending

/PRNewswire-USNewswire/ -- United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, D-La., and Ranking Member Olympia J. Snowe, R-Maine, today commented on President Barack Obama's ambitious new plan to increase access to capital for small businesses. Chair Landrieu and Ranking Member Snowe joined Congressional lawmakers, business leaders and community bankers in a meeting with the President this morning to discuss the plan, which will take immediate steps to unlock frozen credit markets, temporarily roll back lending fees and bolster bank liquidity to ensure small firms can have continued access to credit.

"President Obama and Secretary Geithner have laid out a bold, ambitious agenda aimed at encouraging lending to small businesses, the engines of economic recovery," Chair Landrieu said. "The financial crisis has hit small businesses where it hurts the most - drying up access to capital as banks are becoming more hesitant to lend. The frozen secondary market for SBA-backed 7(a) and 504 loans has discouraged new lending to small businesses, but the Obama Administration's plan to purchase SBA-backed 7(a) and 504 loans will allow banks to leverage existing SBA loans to provide new loans to entrepreneurs looking to grow and create more jobs.

"By increasing the SBA loan guarantee to 90 percent and temporarily eliminating fees on 7(a) and 504 loans, President Obama's plan will reduce the risk lenders face when they make new loans while making those loans more affordable to small business owners. I was proud to work with my colleagues on the Appropriations Committee to get these provisions included in the American Recovery and Reinvestment Act. By getting capital flowing again to small businesses, we will help get the country out of the economic crisis. Washington must focus on small businesses. I look forward to chairing a hearing of the Small Business Committee on Thursday that will look into the factors that have caused many entrepreneurs to be shut out of vital credit markets. The President's announcement today proves that he also understands the importance of small businesses to our economy," Chair Landrieu said.

"I am pleased that President Obama has called today's summit to address the credit crisis that is preventing our nation's small businesses from accessing the capital so vital to maintaining and expanding their operations," said Senator Snowe. "Today's implementation of critical provisions that Senator Landrieu and I fought to include in the American Reinvestment and Recovery Act to provide fee relief to borrowers and lenders in the SBA's 7(a) and 504 loan programs, as well as an increased guarantee rate for 7(a) loans, comes not a moment too soon. The President's willingness to use TARP funds to directly purchase SBA loan pools, which I have expressed my support for with the Administration, is a much-welcome step that will provide liquidity into secondary markets and generate additional financing dollars for small businesses nationwide."

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Statement by Robert Greenstein, Executive Director, Center on Budget and Policy Priorities, on the President's 2010 Budget Proposal

/PRNewswire-USNewswire/ -- The following is a statement by Robert Greenstein, Executive Director of the Center on Budget and Policy Priorities:

The President's budget represents a bold and courageous proposal to make progress in restoring fiscal discipline while addressing two central problems of our time -- a broken health care system and the threat of catastrophic global warming -- and other national needs.

Particularly courageous are several proposals that take on vested interests to fully pay for the costs of health care reform and tackling global warming, including:

-- Instituting major cost-saving reforms in Medicare that also hold
promise for slowing private-sector health care costs and are
consistent with recommendations of Congress' expert advisory body, the
Medicare Payment Advisory Commission. Faced with intense opposition
from insurance companies and other interests, Congress has shied away
from such proposals, but the new Administration has embraced them.
The budget also includes a sound, longstanding Republican proposal --
to increase the premiums that affluent Medicare beneficiaries pay for
the prescription drug benefit that Medicare provides them.
-- Limiting various tax subsidies to the most affluent Americans to 28
cents on the dollar. Currently, middle-income Americans receive a tax
subsidy equal to 10 cents or 15 cents for each dollar of their
deductible expenses (if they itemize deductions at all), while
affluent Americans get a subsidy of 35 cents for each dollar of the
same expenses. The budget would cap the subsidy at 28 cents on the
dollar for those with incomes over $250,000, the same rate at which
those expenses could be deducted in the final Reagan years, when the
top tax rates were lower. As a result, incentives to incur those
expenses would be the same as under President Reagan.
-- Auctioning all emissions permits under the Administration's proposed
cap-and-trade system to address global warming, rather than conferring
windfall profits on energy companies and others that pollute by giving
them tens of billions of dollars' worth of permits for free. The
proposal would then use auction proceeds to offset the impact on
working families of the resulting increases in energy prices, by
extending the Making Work Pay tax cut. (This tax cut is similar to
tax-reduction proposals of recent years by a number of analysts,
including those here at CBPP, to efficiently provide middle-income
consumers with relief from the increased energy costs that an
emissions cap would trigger.) Additional measures will be required to
provide adequate relief to low-income consumers; the budget envisions
using some of the remaining auction proceeds for that.


The budget also makes a significant commitment to restoring fiscal responsibility while meeting high priority national needs, by:

-- Reducing deficits to 3 percent of the Gross Domestic Product by 2013,
about the level needed to keep the federal debt from rising much
faster than the economy and thus leading to an explosion of debt that
swamps the budget and the economy.
-- Pledging to offset the costs over the next ten years of health care
reforms that initially will raise costs by providing universal
coverage but that will set the stage for reducing public- and
private-sector health care costs in subsequent decades by gradually
slowing the rate at which those costs grow. The high rate of growth
of health-care costs is at the root of the nation's long-term fiscal
problem.


By themselves, these budget proposals would prove insufficient to keep deficits at 3 percent of GDP indefinitely. Policymakers will need to take additional steps in subsequent years, as President Obama noted at his "fiscal summit" on Monday.

The budget also deserves high marks for transparency and honesty. Gone are the gimmicks that have been an annual feature of both Presidential and Congressional budgets, under which policymakers pretended to reduce deficits markedly over time by omitting costs in the "out years" for operations in Iraq and Afghanistan, natural disasters, and continued relief from the Alternative Minimum Tax and the scheduled reductions in Medicare fees for doctors -- and by printing in the budget numbers for the costs of discretionary programs in the out years that everyone knew were unrealistically low.

Those gimmicks, sleights-of-hand, and convenient omissions are absent from this budget. Its greater realism and transparency makes the President's pledge to cut the deficit in half in four years a meaningful one; we will now know each year whether we are on course to meet that goal.

The budget also provides needed investments in key areas for long-term economic growth, such as energy efficiency and early childhood education. And it proposes savings from lower priority programs such as bloated agricultural subsidies and from unwarranted tax breaks, such as one that millionaire equity fund managers have exploited to pay taxes at lower rates than many middle-income families and others that benefit oil companies. The budget also follows in the tradition of the 1990 and 1993 deficit-reduction laws in both shrinking the deficit and reducing poverty, which is higher in the United States than in other Western nations.

Predictable but Unfounded Criticisms

The budget already is facing several lines of attack that rest on inaccurate or misleading charges. Chief among them is the claim that the tax increases for people who make over $250,000 will seriously injure small businesses.

In fact, small businesses would win under this budget. Tax Policy Center data show that fewer than one in every ten people with small business income have incomes over $250,000, the only group that faces higher taxes under this budget. Moreover, many people with small business income who are in this category are wealthy individuals who have invested in businesses, but who are not proprietors and have little or nothing to do with running those businesses. The vast majority of small business owners are middle-income individuals who would receive tax cuts under the budget; many of them would also benefit from its universal coverage and health care cost containment reforms.

To be sure, many will oppose various proposals to close tax loopholes, the Medicare and agricultural subsidy reforms, and the cap on the value of itemized deductions for the most affluent Americans -- while saying that they, too, favor universal health coverage, curbing global warming, improvements in education, and the like. This budget challenges them to propose their own ways to finance such measures.

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Landrieu, Snowe Highlight Key Small Business Provisions of Economic Recovery Package

/PRNewswire-USNewswire/ -- United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, D-La., and Ranking Member Olympia J. Snowe, R-Maine, last night spoke on the floor of the Senate about the key small business provisions included in the Economic Recovery Package.

The bill includes provisions to increase access to capital for small firms. It temporarily eliminates fees on the Small Business Administration's flagship loan programs -- 7(a) and 504 loans -- which could stimulate as much as $20 billion in new lending.

The bill also includes key assistance to microbusinesses, funding for the SBA's surety bond program, which will help the agency guarantee bonds for small contractors who have been squeezed out of the conventional bonding markets, and $10 million for the SBA Inspector General's oversight of small business stimulus funds.

On the Senate floor, Sens. Landrieu and Snowe also emphasized the need to elevate the SBA Administrator to Cabinet-level status so that the Administrator can better advocate for the needs of small businesses. Last week, the Senators sent a letter to President Barack Obama requesting the move.

A full transcript of Sens. Landrieu's and Snowe's colloquy is below:

Ms. LANDRIEU. First, let me thank the Senator for her leadership over the years as a chair and ranking member of this important committee. Let me also acknowledge the great leadership in recent years of Senator John Kerry, the chairman of the Small Business Committee. Particularly in regards to this particular bill, working out some bipartisan provisions that we could include, I wish to thank Senator Durbin and his staff who worked closely with us.

I wish to begin my brief colloquy with a statement that might be surprising to some who are listening, that 40 percent of all the capital in the country for small business, basically, comes through or touches the Small Business Administration. That is how important this small department of only 2,000--it used to have 3,000 people--it was terribly, and unjustifiably, in my view, cut under the previous administration. I wish to acknowledge that Senator Snowe has been a fierce and effective advocate. In the case of those cuts, she argued, sometimes successfully and sometimes not, those cuts shouldn't take place. Nonetheless, the Presiding Officer has started a small business that turned into a large business, and he knows that one of the great challenges right now is access to capital and affordable capital. We are not talking about access to being able to use a credit card at 21 percent or 15 percent. That is not affordable capital. We are not talking about mortgaging your house only to watch the value fall by 50 percent. We are talking about things that could really spur the flowing of the capital markets in this country.

Briefly, in the underlying bill we voted cloture on, we have eliminated the fees associated with the 504 economic development program, the 7(a) program, and the 504 program.

Lending is down by 40 to 60 percent, depending on the State. In Louisiana, we are down 60 percent. We think by eliminating these fees, it may spur banks to lend money and borrowers to come forward for this access to capital.

For over 50 years, the SBA's lending programs provided critical financing to small business owners who could not get affordable loans in the conventional market. In the wake of the financial crisis and this recession/depression, the SBA loan programs have not filled the void left by increasingly tight markets for conventional bank loans. We hope some of the provisions in this bill will help reduce that trend.

The fee waivers supported by the U.S. Chamber of Commerce and other business groups are very encouraging by the results when we did this the last time, after the 9/11 attacks--what that might mean to spur economic growth in this country in the next few months and years to come.

Let me also mention that in the underlying bill, we specifically targeted microloans. This might also be surprising to many, but the microloan program provides very small loans--on average about $13,000 per loan. That seems to be very small, but sometimes I think we get caught up in billions and billions and we forget that sometimes $5,000, or $10,000, or $20,000 is all it takes to get a good idea off the ground and to help create jobs in America.

I want to say, since so many Government programs get a bad rap and a black eye, this program--in large measure, my colleague from Maine helped to start it in 1992--the microloan program has been one of the most successful programs to date, having just one loss in its 18-year history, just one loss. Microloans are made to the smallest of businesses, typically home-based businesses, startups, newly established or small businesses. The program has always also been a great way to meet the needs of minority women and rural small business owners.

The final part of this bill I want to mention before turning it over to my colleague is the venture capital funds that will also stimulate the flow of venture capital to emerging small businesses by providing flexibility for participants in the SBA's Small Business Investment Company programs, SBIC programs, which have been successful. The language in the underlying bill will give them the flexibility to even be more successful. The occupant of the chair knows, Virginia's economy is growing and being spurred by new investment in small business. The Chair has had, as Governor of that State, a front-row seat. These are some of the things we have put in the underlying bill.

I will mention one final item. The good Senator from Maryland, Ben Cardin, secured on the floor of the Senate, in addition to the work we had done originally on this proposal, a surety bond amendment, which was passed by a pretty overwhelming vote in the Senate, which will help small businesses secure--particularly in the areas of construction--those surety bonds that will enable them to be part of this new stimulus package.

I am proud of the work we have done. Again, if it can be improved in conference, I would be open to that.

I would like to turn the final part of this presentation over to the good Senator from Maine for comments about the financing portion, as well as some other portions I spoke about.

I yield the floor.

The PRESIDING OFFICER. The Senator from Maine is recognized.


Ms. SNOWE. Mr. President, I commend my colleague, Senator LANDRIEU, from Louisiana, the new chair of the Small Business Committee. I am confident that she is going to champion small businesses and the critical role they play in our Nation's economy. I look forward to joining forces with the Senator from Louisiana. She is going to be an effective and eloquent advocate on behalf of the men and women who make up the millions of small businesses across this country, which are the lifeblood of our Nation's economy.

One of the things we learned during the aftermath of Hurricane Katrina is that over 85 percent of businesses in Louisiana were small businesses. Similarly, in my home state of Maine, over 97 percent of all businesses are small businesses. So we understand the imperative of doing everything we can to reinforce and leverage the resources we have at the Federal level to support the engine of our economy; and that is, of course, America's small businesses. They are too often overlooked, Mr. President, in the role they play in our Nation's economy and in their job creation potential--creating two-thirds of all net new jobs in America.

At a time of cataclysmic job loss, we have to look to small businesses to spur economic growth. I am concerned because I have taken many street tours across my State, and have seen first hand what we are seeing unfold all across America, small businesses closing their doors. So I know that we must do everything conceivable to reinforce, and bolster the resources of the Small Business Administration, to help it make a difference in creating jobs.

Frankly, all too often small businesses are overlooked, unrecognized, and not acknowledged for the indispensable role they play in driving our Nation's economy. Nationally, unemployment is at 7.6 percent. In the past 4 weeks, more than 2.3 million people have filed new claims for jobless benefits. Those losses will only cascade even further if small businesses are unable to access the capital needed to help them start, grow, and expand their operations. It is one of the issues I am working on as we speak. Certainly, through the Troubled Asset Relief Program and with the respective Federal agencies, I think we should have a phone line so small businesses can call to find out how we can match up their needs for lending with banks and financial institutions across this country.

As we speak, we are finding that more and more small businesses are unable to get the lines of credit they need to continue to carry on their business. Certainly, in a multiseason State such as Maine, people cannot do some things during the course of the winter, but they want to maintain their workforce and are unable to because they cannot access the line of credit that is indispensable to survival. There are a number of things we can do at the Federal level, much of which is included in this stimulus plan pending before the Senate.

I agree with my colleague, Senator Landrieu that we must focus upon initiatives that are crucial to creating jobs. After all, when everybody talks about the stimulus plan, how to evaluate it, as I said last week, we need to create a rigorous standard by which we measure job creation in this legislation. It is absolutely essential in building the confidence that this stimulus plan will work.

The way to do that is to look at some of the provisions targeted toward the small businesses, which will play a key role in our economy. When you realize that firms with fewer than 500 employees comprise 99 percent of all businesses in America. And according to the SBA, small businesses have greater potential to recover faster than larger businesses during the course of a recession. But small businesses are fighting for survival.

That is why Senator Landrieu and I worked to ensure that key initiatives were included into this bill, which will be critical for small business success during these very difficult economic times. We collaborated on these initiatives because we know that they are paramount to securing a robust future for small businesses.

SBA lending numbers are in a free fall. That is demonstrated in several of the charts I have here. The 7(a) loan volume has dropped from over $3.2 billion to under $2 billion, respectfully, compared to the same quarter last year. In terms of percentage impact, that is a 43-percent decline. For startup 7(a) loans, the numbers are just as bad. Nationally, startup loans are down over 40 percent, when compared to the first quarter of fiscal year 2008 to the current fiscal period.

In Maine, for example, if you look at 7(a) lending, it has declined by nearly 69 percent for the first quarter of fiscal year 2007, compared to this quarter of fiscal year 2009. That is why it is absolutely urgent that we make sure the initiatives that are included in the Senate-passed version of the stimulus plan are maintained and preserved in conference. They will go a long way toward addressing and minimizing many of the problems small businesses face.

For example, Senator LANDRIEU and I worked in tandem on some of these key initiatives, which include those to reduce or eliminate fees for 504 and 7(a) loans, for instance. This is a departure from the approach taken in the House but, frankly, reducing these fees will provide a greater incentive for both small businesses and lenders to participate in the program, rather than just increasing the guarantee, which is reflected in the House-passed version of the stimulus plan.

We will also be able, through supporting these programs, to reduce the cost of SBA loans for borrowers. These SBA loans will help to create or retain 750,000 jobs.

Additionally, we have included provisions to increase funding, as Senator LANDRIEU indicated, for the SBA's vital microloan program. These microloans are not only easy to process, they are effective and accessible to small businesses. Again, these loans have demonstrated time and again their job creation value and potential. We have improved the venture capital program and increased the size of loans that small businesses can take under the SBA's 7(a) and 504 lending programs. Another key component is the automation of the SBA's loan processing, which must be improved. It would be easier for lenders, particularly small ones and those in rural areas, to participate in the loan programs because, increased automation will result in increased usage of these key programs. Most critically, this automation would reduce the regulatory burden on small businesses. In fact, the SBA Office of Advocacy has determined that the cumulative annual cost of Federal regulations to small businesses is more than $1 trillion. So automation would take a step toward reducing that burden, and it would make a tremendous difference for many in my State, in Louisiana, and across the country.

As a member of the Finance Committee, I also want to highlight key tax provisions in the stimulus plan. Again, I express my gratitude to Senator LANDRIEU for her advocacy of these initiatives because they are essential. The first is an extension of Section 179 Small Business Expensing at the $250,000 level for 2009 and 2010. That has demonstrated--repeatedly in the past--to create jobs. We need to use proven programs, like this, in the stimulus that have job creation value.

I am very pleased that level of $250,000 will be extended both in 2009 and 2010 so that small businesses can make investments in plant and equipment that they can deduct immediately. In 2005, the most recent year for which data was available, according to the IRS, more than 4.5 million small businesses claimed the section 179 expense deduction. These are 4.5 million job-creating engines, which this provision could assist at this difficult time in America.

The other provision, of course, is the 5-year net operating carryback of losses which will allow companies to use these losses against prior-year profits to gain immediate tax refunds.

Thank you, Mr. President, for allowing me to speak about these key small business provisions in the stimulus bill. As we focus our attention on this stimulus package, we have to measure each and every initiative by its job-creation capabilities and as a catalyst for creating those jobs. As Senator Landrieu indicated, there is no greater catalyst for job creation in this country than small businesses. I have often stated that we have ignored and overlooked their tremendous potential.

The stimulus package, which is pending before the Senate, will bolster small businesses through a variety of initiatives. I am pleased we were able to incorporate these provisions, through the support of Senator Landrieu and many members of the Senate Finance and Appropriations Committees and particularly Senators Baucus and Grassley, Finance Committee chair and ranking member, and Senators Inouye and Cochran, Senate Appropriations Committee chair and ranking member. Thank you to all of those who realized how vital these initiatives will be to creating jobs. I hope that in the conference committee these initiatives will be preserved because at the end of the day, this package will be measured in terms of its ability to jump-start this economy. And we know that small businesses will be on the front lines of job recovery, if given the resources and the ability to do so.

Again, I thank my colleague from Louisiana for being such a critical advocate and for her leadership on the Small Business Committee. I am looking forward to working with her in the future.

Mr. President, I yield the floor.

Ms. LANDRIEU. Mr. President, if my colleague will yield for a moment, I want to mention as we close, I am so happy and excited about the President's nominee for the Small Business Administration. I had the opportunity to meet her for the first time today.

I ask my colleague from Maine, who is actually very familiar with this nominee, and she is from Maine, if the Senator would share a word or two about the particular qualifications of this nominee as we get ready to start this process. Through the Chair to my friend from Maine, it is indicative of the President's focus and his interest and his understanding by giving us such a quality nominee to consider.

The PRESIDING OFFICER. The Senator from Maine.

Ms. SNOWE. Mr. President, I appreciate that Senator Landrieu has raised for discussion the tremendous credentials that are offered by Karen Mills. There is no question that she has a tremendous background both in manufacturing and venture capitalism and in understanding the role that small businesses play in our Nation's economy.

She has had firsthand experience, not only through her family's business endeavors, but also through her work in venture capitalism in helping to shape and rebuild various businesses. She understands and appreciates the resources that are necessary and essential to rebuilding businesses and the access to capital that is required.

Also, she played a pivotal role in Maine's economy, in encouraging the use of cluster development. She has worked extensively with the Brookings Institute on how to nurture cluster development in various small and rural communities, to help rebuild and reshape their local economies.

What we have recognized, and what she has certainly demonstrated time and again through her own personal firsthand experience, is that it does not take a lot of resources to nurture and create small businesses as a foundation for a local economy. It is that type of experience she will bring to the Small Business Administration.

In fact, I had the opportunity to meet with her this afternoon as she prepares for the confirmation hearing. There is no question that she has widespread knowledge on what it will take to rebuild the Small Business Administration helping it to be far more responsive and receptive to small businesses, to understand what they need, to link them up with lenders, to provide the technology required to make the agency much more effective and responsive to the needs of small businesses across the country.

I am looking forward to working with Ms. Mills and the chair of the Small Business Committee because I believe that Ms. Mills is outstanding in her capabilities and truly appreciates the role small businesses play in America's economy. Mr. President, I ask unanimous consent to have a biography of Ms. Mills printed in the Record.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

BIOGRAPHY OF MS. KAREN GORDON MILLS

Ms. Karen Gordon Mills is the President of MMP Group, Inc. Previously, she was the Co-Founder and Managing Director at Solera Capital. Before founding MMP Group, she was the Managing Director and Chief Operating Officer of the Industrial Group for E.S. Jacobs and Co., from December 1983 to January 1993. In this role, Ms. Mills personally led seven leveraged buyout transactions and had an influential or board role in six others: Ms. Mills background includes consulting for McKinsey and Co. both in the U.S. and in Europe, and working as a Product Manager for General Foods. She has been a Director and Member of Audit and Compensation Committees of Arrow Electronics Inc. since 1994 and Director and Member of its Audit Committee of ArmorAll Products Inc. since 1994. Ms. Mills serves as Director of Latina Media Ventures LLC, Triangle Pacific Corp. since 1988, Annie's Homegrown Inc., Scotts Company, and Guardian Insurance Company. Ms. Mills chairs Governor Baldacci's Council on Competitiveness and the Economy. She also sits on the Governor's Council for the Redevelopment of the Brunswick Naval Air Station, which recently went on the BRAC closure list, and serves on the Boards of the Maine Technology Institute and the Maine Nature Conservancy. Ms. Mills is a member of the Council on Foreign Relations and has been Vice Chairman of the Harvard Overseers. Ms. Mills has an A.B. in Economics from Radcliffe College, Magna Cum Laude. She also holds an M.B.A. from Harvard Business School where she was a Baker Scholar.

Ms. LANDRIEU. Mr. President, I thank the Senator for her testimony in regard to Karen Mills and will commit as the new chair of this committee to move her nomination through with dispatch.

I will say before I give closing remarks, a word to banks and credit unions, particularly community banks, that I am intent in a leadership position on this committee to have the SBA be a better partner to community banks and credit unions as we really leverage the power of the SBA. Too often in the past, it has been seen as a problem or too complicated or too bureaucratic. I am looking forward to making that a much smoother, more powerful, muscular partnership so that our small businesses in America can have a model, the best in the world. It is going to be exciting to work on.

I thank the Senator from Maine and look forward to having a very strong partnership with her in the months ahead.

Is there any further business?

Ms. SNOWE. Mr. President, one other issue that is critical, which Senator Landrieu and I both share, is that of elevating the Small Business Administration to Cabinet-level status. As I have said before, this will underscore the critical role that small businesses play in our economy. I know Chair Landrieu shares and supports such an initiative. It is long overdue and unquestionably should be done. We should elevate the status of the agency to give it the prominence and profile it deserves on behalf of the men and women of our Nation's small business community. There should be far more focus upon the role that they can serve in not only our domestic marketplace, but the global marketplace as well.

I will continue to call for the elevation of this critical position. I have advocated it for years. In light of where we are today in the economy, and the increase in unemployment, it is even more imperative that we increase the prominence of small businesses in the President's cabinet because, again, doing so will provide the attention and resources they require to survive and be prosperous.

Ms. LANDRIEU. Mr. President, I agree with the Senator from Maine. I was happy to join with her in a letter to the President urging him to take this step. Hopefully, he will consider that request and give it every consideration.

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Obama Stimulus Plan Breaks Campaign Promise to Small Businesses

/PRNewswire-USNewswire/ -- On February 22, 2008, Barack Obama released the following statement:

"It is time to end the diversion of federal small business contracts to corporate giants."

(http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

The statement was made in response to more than 12 federal investigations, which found billions of dollars in federal small business contracts had been diverted to Fortune 500 corporations, their subsidiaries and thousands of other large businesses in the United States and Europe.

Report 5-15 from the Small Business Administration (SBA) Office of Inspector General stated, "One of the most important challenges facing the SBA and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/IG/05-15.pdf)

Since the exposure of this issue in 2002, nearly every major newspaper in the United States has covered the diversion of federal small business contracts to Fortune 500 firms.

Now, in the face of one of the most catastrophic economic disasters in U.S. history, President-elect Obama has failed to include any provision in his economic stimulus plan to stop the diversion of billions of dollars in federal small business contracts to Fortune 500 firms.

President-elect Obama's refusal to take decisive action to stop the diversion of up to $100 billion a year in federal small business contracts seems to be a direct contradiction to everything he has said about taking "dramatic action" to "put people back to work."

Many of the nation's most respected experts on the economy like Dr. Laura Tyson and Carly Fiorina agree the best way to stimulate our nation's failing economy is to direct federal infrastructure funds to small businesses. Tyson is the former Chair of the U.S. President's Council of Economic Advisers during the Clinton Administration and is currently an economic adviser to President-elect Barack Obama. Fiorina is the former CEO of Hewlett-Packard and McCain campaign economic advisor.

President-elect Obama's refusal to stop the fraud and abuse in federal small business contracting programs will only result in more lost jobs at middle class firms across the nation.

"It does not make sense to throw nearly a trillion of hard earned taxpayer dollars at an economic stimulus plan and then ignore fraud and abuse in longstanding federal programs specifically designed to create jobs and stimulate the middle class economy," President of the American Small Business League Lloyd Chapman said. "It would take one sentence in this bill to create thousands of jobs and to redirect billions of dollars in federal contracts to legitimate small businesses all around the country. My advice to President-elect Obama is that if he sincerely wants to create jobs in America he needs to include this one line in the stimulus package, 'The federal government can no longer report awards to publicly traded companies as small business awards.'"

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Obama Ignores Economic Experts on Stimulus Plan

/PRNewswire-USNewswire/ -- President-elect Barack Obama and the new 111th Congress will soon be rolling-out an economic stimulus plan. The stimulus package will no doubt cost taxpayers hundreds of billions of dollars, and there is no guarantee it will achieve its goal of rescuing most Americans from the failing economy.

One free, easy and guaranteed method to stimulate the U.S. economy is to channel federal infrastructure funds to our nation's nearly 27 million small businesses. U.S. Census Bureau statistics show 98 percent of all U.S. firms have less than 100 employees. These firms create over 85 percent of all new jobs and employ over 56 percent of all private sector workers.

So far President-elect Obama has completely ignored this simple, quick and cost effective method of stimulating the national economy.

In a recent appearance on CNN's Late Edition with Wolf Blitzer, two of America's top economic experts, Laura Tyson and Carly Fiorina agreed that directing federal infrastructure funds to small businesses was a foolproof and easy way to create millions of jobs and immediately boost the failing economy. Tyson is the former Chair of the U.S. President's Council of Economic Advisers during the Clinton Administration and is currently an economic adviser to President-elect Barack Obama. Fiorina is the former CEO of Hewlett-Packard and McCain campaign economic advisor.

This method of stimulating the nation's failing economy would be virtually free to taxpayers and would have an immediate positive effect on the economy. It could be implemented immediately, because it would be based on existing federal programs designed to direct federal funds to small businesses. The Small Business Reauthorization Act of 1997 stipulates that a minimum of 23 percent of all federal prime and sub-contracts be awarded to small businesses.

Since 2002, over a dozen federal investigations have found fraud, abuse, loopholes, and a blatant lack of oversight by federal officials, which have allowed billions of dollars in federal contracts earmarked for small businesses to wind-up in the hands of Fortune 500 firms. Additionally, ABC, CBS and CNN, along with most of the nation's largest newspapers have reported the dramatic abuses in these programs.

It has been estimated that as much as $100 billion a year in federal small business contracts are diverted to Fortune 500 firms and other large businesses. If these funds were redirected to the middle class economy as Congress originally intended with the passage of the Small Business Act of 1953, there would be a significant, undeniable and immediate impact on the national economy.

If President-elect Obama is searching for the most cost effective and immediate way to stimulate America's faltering economy, legislation to direct federal infrastructure funds to America's small businesses should be implemented as soon as possible.

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Snowe, Kerry, Landrieu Tout Bipartisan Bill to Provide Immediate Tax Relief for American Small Businesses

Senator Olympia J. Snowe (R-Maine), the Ranking Member of the Committee on Small Business and Entrepreneurship, Senator John Kerry (D-Mass.), the outgoing Chairman of the Committee, and Senator Mary Landrieu (D-La.), the incoming Chair, today introduced the Small Business Act of 2009. This bipartisan legislation provides immediate tax relief for small businesses making vital investments in new equipment to further weather the current economic storm.

"Expensing has long served as a critical tool to grow the economy and create new jobs. At a time in which we find ourselves in a recession and our nation's small businesses are having trouble finding capital to make job-creating new investments, we simply cannot allow this tax incentive to expire," Senator Snowe said. "By increasing small business expensing and establishing a five year carryback for net operating losses, this measure will pack a powerful punch and assist America's 26 million small firms that represent 99.7 of all employers."

"This law has helped small businesses acquire the tools they need to thrive and grow," said Senator Kerry. "Extending the provision isn't only justified, it's sorely needed in an economic climate where small businesses are hurting."

"It is my hope that Congress will move quickly on this legislation to ensure that our nation's small businesses can weather the current economic downturn," Senator Landrieu said. "By increasing the expensing limits and extending the net operating loss carryback period, we can provide timely and much needed relief to our small businesses."

Last year, Congress passed and the president signed into law the Economic Stimulus Act of 2008, which allowed American small businesses to expense up to $250,000 of their investments, including the purchase of new equipment through 2009. The Snowe-Kerry initiative would extend Section 179 of the tax code, increased small business expensing, through 2010 and establish a five year carryback for net operating losses.

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American Small Business League: Obama to Create Loopholes for Venture Capitalists

/PRNewswire-USNewswire/ -- The following was released today by the American Small Business League:

President-elect Barack Obama is preparing to create significant changes in federal contracting law that will allow some of the nation's wealthiest investors to receive federal contracts earmarked for small businesses. Under the banner of "increasing access to capital" for small businesses, the policies will allow firms controlled by individual venture capitalist and even large venture capital firms to participate in federal small business contracting programs.

The Obama Administration's new pro-venture capital policy could virtually repeal the Small Business Act for legitimate American small businesses by modifying the longstanding federal definition of a small business as "independently owned."

Under the proposed Obama Administration policy, "independently owned" will be changed to include firms that are not independently owned, but are actually controlled by wealthy investors and possibly some of the nation's largest venture capital firms.

Opponents of the new policy say it appears to be designed more to increase wealthy venture capitalist access to billions of dollars in federal small business contracts as opposed to "increasing access to capital" for legitimate small businesses.

If the policy is successfully implemented it could force the average American small business to compete head-to-head with firms controlled by wealthy investors for even the smallest government orders for goods and services. Thousands of middle class jobs could be lost as billions of dollars in federal small business contracts are diverted to a small number of venture capitalist controlled firms.

The plan will likely include a provision that would exempt the venture capitalist owned firms from capital gains taxes. The Obama-Biden Transition Team website, www.change.gov mentions such a proposal.

The appointment of multi-millionaire venture capitalist Karen Mills to head the Small Business Administration (SBA) is the latest indication that President-elect Obama is moving forward with his plans to divert government small business contracts to venture capital controlled firms.

The National Venture Capital Association (NVCA) and its members have been lobbying for the new loophole in federal contracting law for more than two years. The NVCA and its members have contributed millions of dollars to Obama and key Democratic leaders in Congress such as Nancy Pelosi, John Kerry, Joe Lieberman and Hillary Clinton. (http://www.maplight.org/map/us/interest/F2500)

"The easiest and quickest way to stimulate our nation's failing economy is for the government to spend infrastructure funds with America's 27 million small businesses that create all the new jobs and employ most Americans," American Small Business League President Lloyd Chapman said. "This new Obama policy will do just the opposite and will push our economy closer to a depression by diverting billions of dollars in federal funds away from middle class America and into the hands of small number of wealthy investors that backed Obama."

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