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Small Biz Straight Talk

Washington, D.C., October 16, 2009 | Angela Landers ((202) 226-1581)

News from Ranking Member Sam Graves and Committee Republicans:
(Please send any member media activity to
angela.landers@mail.house.gov)

Ranking Member Sam Graves (R-MO) appeared on “The Lars Larson Show” 
 
Ranking Member Sam Graves (R-MO) “Introduces Bill To Make Health Insurance More Affordable for Individuals and Small Businesses” 
 
Rep. Mike Coffman (R-CO) will hold two town halls this weekend. 

Must-Reads from the Week:

NPR: Small Businesses Squeezed As Banks Limit Lending 

Washington Post: Effort Underway to Speed Aid to Small Businesses 

Newsweek: An Unhealthy Debate: Why is Obama's reform plan largely ignoring small businesses? 

 
Administration and the SBA:

On Wednesday, President Obama announced his support to provide seniors with a $250 cash bonus next year.  This was a result of an announcement by the Social Security Administration that there will be no cost-of-living adjustment for 2010.  The anticipated cost of this bonus is $13 billion and it is expected to come out of general revenues.  The payments would go to roughly 57 million Social Security beneficiaries.    

Economic data related to the stimulus package was released yesterday showing only 30,083 jobs were created or saved due to the legislation.  This announcement drew a swift response from Republicans, who said the package was a failure.  Back in January, proponents of the stimulus believed the legislation would keep unemployment below 8 percent.  However, it is now apparent to economic experts that the figure will reach 10 percent.
 

Review of House Activity:

This week, the House of Representatives passed the FY10 Homeland Security appropriations conference report by a 307-114 margin.  The total cost of the measure is $44.1 billion, which represents a 6.6 percent increase from FY09.  The most controversial provision of the legislation came when Republicans offered a motion to recommit that would ban the transfer of detainees to the United States from Guantánamo Bay, Cuba.  However, Democrats were successful in defeating the motion.
 

On Thursday, the House of Representatives passed H.R. 2442, the Bay Area Regional Water Recycling Program Expansion Act, by a 241-173 margin.  Passage of the bill came despite strong opposition by Republicans.  According to the office of Congressman Nunes (R-CA), Congressman George Miller’s (D-CA) legislation provides $38 million for water recycling programs in the greater San Francisco Bay Area.  However, the bill does nothing to address the ongoing water crisis in the San Joaquin Valley.  Currently, half a million acres of productive farmland has been transformed into a desert in order to protect a three inch bait fish, the Delta smelt.  “This legislation is an insult to the water-starved communities of the San Joaquin Valley.  It is offensive to those of us who have fought for and been denied any legislative relief for the real water crisis in California – the one that has turned half a million acres into desert,” said Rep. Nunes.
 

Legislation and Letters Circulating Around the House
(If you would like to publicize your small business effort in Congress, please email Paul Sass at
Paul.Sass@mail.house.gov)

The Helping Make Health Insurance Affordable for Individuals and Small Businesses Act, HR 3776 - Introduced by Rep. Sam Graves (R-MO), H.R. 3776 allows individuals to fully deduct the cost of health insurance premiums from their income taxes.  Current law only allows individuals to deduct non-compensated health care costs, including premiums, when those costs exceed 7.5% of their adjusted gross income.  This usually requires taxpayers to spend many thousands of dollars before being granted even a limited ability to deduct these costs.  However, those individuals with access to an employer-sponsored group plan can pay their premiums on a pre-tax basis, which shields these payments from both income and payroll taxes.  While not providing full pre-tax treatment, The Helping Make Health Insurance Affordable for Individuals and Small Businesses Act is a step in the right direction.  For more information on H.R 3776, or to become a cosponsor than please contact Mark Ratto.
 

Review of Senate Activity:

Earlier this week, the Senate Finance Committee approved its health care bill, estimated to cost $829 billion over 10 years.  The legislation is now in the hands of Senate Democratic leadership who will combine it with a competing bill that originated in the Senate Health, Education, Labor and Pensions (HELP) Committee.  Absent from the Finance Committees bill was a government-run option that has received severe criticism from both Republicans and Democrats.  Its exclusion provided an opportunity for a lone Republican, Senator Olympia Snowe (R-ME), to support the measure.  However, Senator Snowe said her vote for the bill on Tuesday did not mean she would continue to support the legislation after it is merged with the HELP version.  
 

On Thursday, the Senate passed the FY10 Energy and Water appropriations conference report.  The final vote tally was 80-17.  The legislation provides $33.5 billion in discretionary spending for energy and water projects.  The measure is the third of twelve fiscal 2010 spending bills to be sent to President Obama for his signature.  
 

House Small Business Committee hearing summary this week:

The House Committee on Small Business held a hearing Wednesday October 14, 2009 entitled, “Increasing Access to Capital for Small Businesses.”  The witnesses on the first panel were: Martin Sabarsky, Esq., Chief Financial Officer and COO, HR BioPetroleum, Inc., San Diego, CA for the Biotechnology Industry Organization; Thomas G. Zimmerman, D.O., Director, Osteopathic Medical Education, South Nassau Communities Hospital, Oceanside, NY; Ryan Fochler, President, Dog Paws ‘n Cat Claws Pet Care, Inc., Arlington, VA for the Corporation of Enterprise Development; Matthew Shay, Chief Executive Officer, International Franchise Association, Washington, DC; and Zola Finch, Director of Finance, RMI Certified Development Company, Jefferson City, MO for the National Association of Development Companies. 
 

The witnesses on the second panel were: Mark Sekula, Senior Vice President for Business Services, Randolph-Brooks Federal Credit Union, Live Oak, TX for the National Association of Federal Credit Union; Carolyn C. Galiette, Senior Managing Director, Ironwood Capital, Avon, CT for the National Association of Small Business Investment Companies; Suzette Dutch, Managing Partner, Triathlon Medical Venture Partners, LLC; Cincinnati, OH for the National Venture Capital Association; R. Michael Menzies, Sr., President & CEO, Easton Bank & Trust, Easton, MD for the Independent Community Bankers of America; and Cass Johnson, Chief Executive Officer, National Council of Textile Organizations, Washington, DC. 

 

Mr. Sabarsky testified that small biotechnology companies are unable to access early stage capital investment because venture capital companies want a proven track record.  As a result, Mr. Sabarsky supports H.R. 3738, the Small Business Early-Stage Investment Act of 2009, which would provide financial incentives for venture capital companies to invest in start-ups.  Dr. Zimmerman testified that physicians need about three years to recoup investment for electronic medical records. As a result, the physicians need deferral of loan repayments that would be provided by H.R. 3014, the Small Business Health Information Technology Financing Act.  Mr. Fochler noted that, despite an excellent credit rating, he could not get business credit from a bank but received both financing and technical assistance from a microloan intermediary.  Given his experience with the benefits of microloans, he strongly endorsed H.R. 3737, the Small Business Microlending Expansion Act of 2009, which would increase availability of microloans to other budding entrepreneurs.  Mr. Shay testified that small business franchisees purchasing proven franchise operations could not get financing for banks.  He went on to support H.R. 3723, the Small Business Credit Expansion and Loan Markets Stabilization Act of 2009, which would increase access to lending to small business owners.  Mr. Shay requested that loan size be increased to $5 million to cover a franchise owner purchasing a second unit.  Ms. Finch noted that lending in the Certified Development Company program has been down.  She asserted that H.R. 3739, the Job Creation and Economic Development Through CDC Modernization Act of 2009, would streamline program operations and thereby enable certified development companies to do more lending.

 

Mr. Sekula testified that credit unions, if they were freed from the restrictions imposed on their commercial business lending, would be able to fill gaps in credit availability to small businesses.  He went on to note his support for H.R. 3723, the Small Business Credit Expansion and Loan Markets Stabilization Act of 2009 because it would help small lenders like credit unions navigate the maze of lending rules imposed by the Small Business Administration.  Ms. Galiette testified that successful small business investment companies must go through the same licensing process as a new applicant which undermines the utility of the program.  She supported the streamlined licensing approach for experienced small business investment companies established in H.R. 3740, Small Business Investment Company Modernization Act of 2009.   Ms. Dutch noted that venture capital companies are having difficulty raising funds due to the downturn in the economy.  Ventures that could be supported cannot be, so she strongly endorsed H.R. 3738, the Small Business Early-Stage Investment Act of 2009.  Mr. Menzies noted that small banks did not create the current crisis and have money to lend.  However, the Small Business Administration lending programs are not easily utilized by small banks that make an occasional loan under the programs.  H.R. 3723, the Small Business Credit Expansion and Loan Markets Stabilization Act of 2009, would correct those problems and Mr. Menzies supported the bill.  Mr. Johnson noted that small manufacturers, especially in textiles, were having difficulty obtaining credit for exports.  He requested that the Committee amend the existing bills to create a new lending program for export working capital aimed at small manufacturers.   The Committee expects to mark up the legislation discussed at the hearing in the    near future.

Other Small Business News off the Hill:

The NFIB released its October edition of Small Business Economic trends. 

The IRS released announced a retirement plan navigator tool to help small businesses.
 

 

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