By Walter Alarkon - 06/15/10 10:00 AM EDT
The House vote this week on a $30 billion small-business loan fund presents the first test of the Obama administration’s renewed push for more spending on jobs.
President Barack ObamaBarack ObamaDems celebrate anniversary of gay marriage ruling Cannabis conversation urged at North American Leaders Summit Obama: 'There's still work to do' for gay community MORE over the weekend sought to stiffen the spine of lawmakers skeptical about additional job-creation programs, painting them as emergency measures without which the economic recovery cannot take hold.
In a letter to congressional leaders, Obama came out strongly for spending provisions such as the small-business loan fund, small-business tax breaks and more fiscal aid for states — measures that have all but stalled in Congress since he first pressed for them in his January State of the Union address.
“Taken together, these measures to jump-start private sector job creation, avoid massive layoffs at the local and state levels and help the unemployed are critical and timely ways to further the economic recovery and spur job creation,” Obama wrote. “At this critical moment, we cannot afford to slide backwards just as our recovery is taking hold. We must take these emergency measures.”
House Republicans remain opposed to new spending and have called the small-business loan fund another unpopular bailout. So the Obama administration and House leaders will have to win over the votes of freshman and Blue Dog Democrats facing tough races this fall.
The House will vote on the $30 billion fund Tuesday or Wednesday. The legislation, sponsored by House Financial Services Committee Chairman Barney Frank (D-Mass.), would provide money to banks with assets of up to $10 billion, which would in turn provide credit to small firms. Its backers have said that the $30 billion could lead to a total of $300 billion more in small-business credit. The measure also provides $2 billion to states that have their own programs aimed at bolstering private lending for small firms.
Frank on Monday said much of the program would pay for itself, as small businesses would be able to pay loans back to banks, which would then refund the government.
Freshman Rep. Gerry ConnollyGerry ConnollyDem protest ignites debate about control of House cameras 'Will on the Hill' pokes fun at 2016 election IRS hearing: Five things to watch MORE (D-Va.) backed more help for small businesses but wouldn’t commit to voting for the bill because House leaders had yet to find a way to offset the fund’s cost.
“The reality … in my view is that there’s an increasing sense in the House caucus that moving forward, we’re going to get good ideas — and we’re going to have to make sure to pay for them,” he told The Hill.
A Congressional Budget Office report in May said the bill would cost $3.4 billion over five years.
In the Senate, Democrats plan to hold a vote on a $115 billion bill extending jobless aid, Medicare doctor payments, aid to prevent public-worker layoffs, Medicaid money for states and tax provisions that have either expired or are set to expire soon. Because most of that bill isn’t offset and thus would add to the $13 trillion federal debt, Republicans have attacked the measure.
Obama has come out in favor of all those spending provisions.
“Only through this approach of aggressive and well-targeted and temporary actions, alongside measures to ensure a sustainable and responsible long-term budget outlook, will we be able to fulfill our economic potential,” Obama wrote.
Should the small-business measures pass the House this week, they could get consideration in the Senate within days. The upper chamber may take up a version of the small-business legislation after work on the extenders bill, Senate Majority Leader Harry ReidHarry ReidHispanic Caucus PAC looks to flex its muscles in 2016 Say NO to PROMESA, say NO to Washington overreach Overnight Finance: Wall Street awaits Brexit result | Clinton touts biz support | New threat to Puerto Rico bill? | Dodd, Frank hit back MORE’s (D-Nev.) office said. It is still unclear which bill.
Sen. Mary LandrieuMary Landrieu oil is changing the world and Washington Ex-Sen. Kay Hagan joins lobby firm Republican announces bid for Vitter’s seat MORE (D-La.), chairwoman of the Senate Small Business and Entrepreneurship Committee, and Sen. Olympia Snowe (R-Maine) have been pressing for a bill that extends increased loan limits and fee waivers for Small Business Administration loans. Neither Landrieu nor Snowe has backed the $30 billion fund pushed by Obama.