After losing more than eight million jobs during the Great Recession, more than 700,000 of them just in December of 2008, we have gotten more than 4.5 million jobs back. The unemployment rate is now 7.8% across the country, and we've had more than 30 months of private sector job growth. Many Americans are still struggling and too many are suffering, but there is more optimism about our future. The newest Federal Survey of Economic Conditions, "The Beige Book," said New England's economic development "continues to expand at a moderate pace" and that manufacturing and business service and real estate sales are up, commercial construction is up, and retail is mixed. It reported that prices are steady, no inflation is expected, and that the mood is "cautiously optimistic" in 2012, and more "bullish" for 2013. While times are still tough and we have a way to travel to return to the "pre-Wall Street crash of 2008" economy, Congress and President Obama were able to avoid another Great Depression and put the country back on the road to full recovery. It's a good time to review what policies helped small business, and what do we need to do next?
The American Recovery and Reinvestment Act (the Stimulus) put more than $21 billion in new investment in small businesses. Congress eliminated all fees on SBA-backed loans. It also lifted the ceiling on the loan amount that the SBA would guarantee from 85% to 90%. There were significant small business tax cuts as well. Congress also passed The Small Business Jobs Act. This was supported by both the Small Business Majority and the U.S. Chamber of Commerce, and the President of the National Small Business Association said at the time that "It doesn't matter what aspect of small business you are in, this bill has something for you." We created a new lending fund for community banks. We encouraged small business investments by cutting the capital gains tax on people who invested in small businesses, and passed legislation allowing businesses to use net operating losses in 2008 and 2009 to offset profits from five previous years, instead of the two years that had been allowed.
The positive effects of the 2010 Small Business Jobs Act are still being felt in New Hampshire. The Union Leader wrote an article on July 9, 2012, called "New NH Business Start-Up Fund Will Aid High-Tech Firms", and in it, they discuss how $4.5 million in federal funds is being used to back up a partnership between a private company and the NH Business Finance Authority. This will attract private money to invest in high-tech firms. BFA's Executive Director is quoted as saying, "It's a private market solution. We're backstopping the deal through an innovative guarantee mechanism, but it's largely driven by private capital." To which I say, "Perfect!" This is another success story, creating wealth and business in New Hampshire.
There is still so much to be done though. We still need a comprehensive jobs bill, and small businesses still need help. What can we do next?
Congress needs to cut through some red tape still. While we all know that there have to be rules of the road, we must do only what is necessary, and eliminate some of the paperwork and provide regulatory relief whenever rules are unnecessary or too heavy-handed.
To help entrepreneurs launch new businesses, we should let them set up a tax-preferred account like a Roth IRA, instead of dipping into their retirement savings too much.
It's a good idea to double the small business start-up tax deduction, and we should provide tax credits and deductions to encourage new technologies. I believe that we need to help small businesses get more contracts with the federal government and help them export products. We also need to fully fund the Small Business Administration.
Small businesses are the economic engine of our country. Our nation's full recovery depends on their full recovery and success. We have come so far, and they have worked so hard. We must not fail them now.