In a recently too-rare win for Senate Democrats, the Senate has just passed the small business lending bill. Story here.
This is the bill that has been widely discussed, and should have passed six months ago, that creates a $30 billion fund for community banks to lend to small businesses.
More details below.
This legislation would also aid lending by lowering Small Business Administration loan program fees and raising loan guarantee and lending limits.
"This small business jobs bill would give small businesses $12 billion in tax cuts. It would increase small business lending. It would help small business owners to get private capital to finance expansion and hire new workers," said Senate Finance Committee Chairman Max Baucus, D-Mont. "And all these things would help small businesses to create as many as a half a million jobs."
Clearly too little too late (Update -- see comment below), but it's amazing they got anything at all through the solid "just say no" Republican caucus. Voinovich and Lemieux, both retiring, joined the Democrats to break the filibuster. It's a sad state of affairs when the only Republican willing to do anything constructive -- even cut taxes, which is their religion -- is one that is retiring and doesn't have to worry about the wrath of Limbaugh et al.
Also included in the bill is a provision allowing taxpayers to convert their 401(k)s to Roth accounts. The conversion means taxes would be paid on the income up front, but no tax will be due when the funds are withdrawn.
UPDATE: A number of commenters have taken exception to my use of "too little, too late" in characterizing this legislation. To clarify, I am not trying to be a killjoy. I think it is very good this bill passed and I think it will help people. But it would have been a lot better, politically as well as economically, if the bill had passed six months ago. The Republicans, of course, prevented that with a filibuster. I give Harry Reid credit for his persistence and persuading two Republicans to break the filibuster. So I'm not trying to criticize the Democrats (at least not this time), I'm just making the observation that it would have been better if we could have passed a bigger bill, and sooner.
UPDATE II: Wow. Rec list! My first. Thanks everyone.
UPDATE III: Here's some more information:
The measure is expected to create 500,000 jobs, according to a Senate summary of the bill. Hiring by small businesses, considered a key driver of job growth, has been shrinking over the last two and a half years.
The bill, which passed the Senate vote 61 to 38, aims to spur hiring by making credit more available to small businesses. The number of loans has dropped by 17.8% since the second quarter of 2008 and the total value of those loans plunged by $60 billion to $650 billion, according to data from the FDIC.
The tax breaks increase the amount that a small business can expense for capital expenditures; encourage investors by allowing complete exclusion from capital gains taxes on small business investments; and increase the deduction for startup expenses, among a slew of other incentives.
The legislation also provides $1.5 billion in grants to state lending programs that in turn support loans to small businesses.
Article here.