Friday, March 20, 2009
News from Ranking Member Sam Graves and Committee Republicans:
• Ranking Member Graves in Portland Business Journal: U.S. to buy SBA securities to boost lending
• Chairwoman Velázquez and Ranking Member Graves, “Call for More Help for Veteran Entrepreneurs.” See the Boston Globe’s news coverage here
• Rep. Leutkemeyer gave a floor speech this week on tax increases on small businesses and their effect on the economy.
Administration and the SBA:
• President Obama invited the House and Senate Small Business Committee’s leadership to the White House on Monday to discuss what can be done to help small businesses during this economic recession. The President subsequently outlined his plan that includes:
o Temporarily Raise Guarantees to Up to 90 Percent in SBA's 7(a) Loan Program;
o Jumpstart Credit Markets For Small Businesses By Purchasing Up to $15 Billion in Securities;
o Temporarily Eliminate Certain SBA Loan Fees to Reduce the Cost of Capital;
o Issue Guidance for an Expanded carryback Provision as Part of the Recovery Act's Comprehensive Tax Cut Package for Small Businesses
Some concerns have been raised about increasing the taxpayers’ exposure to risk and encouraging banks to make loans they would not otherwise make, which could take us down a path similar to the home lending industry.
Legislation and Letters Circulating Around the House:
(If you would like to publicize your small business effort in Congress, please email Paul J. Sass at Paul.Sass@mail.house.gov)
• Rep. McHugh Seeks Cosponsors for the Home Office Deduction Simplification Act (H.R. 1509)
Rep. McHugh invites Members to cosponsor H.R. 1509, the Home Office Deduction Simplification Act, which would allow individuals to elect to take a standard deduction in the amount of $1,500 for home office expenses. H.R. 1509 is designed to simplify the tax code and relieve a regulatory burden on small businesses; many currently do not take the deduction because it is complex and time consuming to calculate. The bill, which was H.R. 6214 in the 110th Congress and had 14 co-sponsors, is supported by a coalition of small business groups including the Alliance of Visual Artists, American Homeowners Grassroots Alliance, Associated Builders & Contractors (ABC), Association for Enterprise Opportunity (AEO), National Association for the Self-Employed (NASE), National Federation of Independent Business (NFIB), National Small Business Association (NSBA), Professional Photographers of America, Small Business & Entrepreneurship Council, Small Business Legislative Council (SBLC), and Women Impacting Public Policy (WIPP). The Home Office Deduction Simplification Act is also supported by the SBA Office of Advocacy. Please contact Mike Holland at 5-4611 or mike.holland@mail.house.gov for more information or to co-sponsor.
• Reps. Herger, Reichert Seek Cosponsors for the Equity for Our Nation's Self-Employed Act (H.R. 1470)
Representatives Herger and Reichert invite Members to cosponsor H.R. 1470, the Equity for Our Nation's Self-Employed Act, which would help self-employed individuals across the country afford quality health coverage. Under current tax law, corporations are able to deduct the cost of health insurance premiums as a business expense and to forego payroll (FICA) taxes on these costs. The self-employed, however, are unable to take the same deduction. As a result, they pay an additional 15.3 percent tax on their health insurance premiums. H.R. 1470 would allow self-employed individuals to fully deduct their health insurance premiums, saving an average of $1,850 annually. The bill has been endorsed by a broad coalition of small business groups, including the National Association of the Self-Employed, National Small Business Association, NFIB, U.S. Chamber of Commerce, Farm Bureau, National Association of Realtors, National Cattlemen's Beef Association, Associated Builders & Contractors, National Association of Health Underwriters, and the Coalition for Affordable Health Coverage. For more information, or to cosponsor, please contact Jay Sulzmann in Rep. Herger's office at 5-3076 or jay.sulzmann@mail.house.gov.
• Reps. Chris Lee and Frank Kratovil Seek Cosponsors for the Small Business Formation and Job Creation Act (H.R. 1552)
Representative Lee and Kratovil invite Members to cosponsor H.R. 1552, the Small Business Formation and Job Creation Act, which would increase the maximum deduction for business startup expenses under Section 195 of the Internal Revenue Code from $5,000 to $20,000. This bipartisan legislation provides a much-needed boost to entrepreneurs by giving them an added incentive to invest in their ideas, create new jobs, and aid our economic recovery. H.R. 1552 has been endorsed by the National Federation of Independent Business (NFIB). For more information or to co-sponsor this legislation, please contact Elizabeth Mortenson in Rep. Lee’s office at 5-5265.
Review of House Activity:
• On Tuesday the House of Representatives cleared a short term extension of programs under the Small Business Act and the Small Business Investment Act. The extension is set to expire on July 31, 2009. This legislation, H.R. 1541, was immediately sent over to the Senate and passed by unanimous consent. The legislation is expected to be signed by the President very shortly.
• The House Republican Economic Recovery Solutions Group and The House Republican Whip Team gathered Thursday on the Hill to hold a “Forum on Small Business and Economic Recovery.” Small business owners across the U.S. participated in the event and spoke about how President Obama’s proposed tax increases will affect their business. Republican Whip Cantor has organized the “GOP Economic Recovery Working Group,” comprised of House Republicans, to establish long-term solutions to rebuild America’s economy.
• In response to the $165 million paid to American Insurance Groups (AIG) executives in retention bonuses, the House of Representatives considered legislation to retroactively impose a 90% tax penalty for bonuses received by certain employees of a company that has received funds in excess of $5 billion from the Troubled Asset Relief Program. This measure, brought up under the suspension of the rules, passed 328-93. The AIG bonuses were made possible by an amendment to the stimulus package added during the conference committee by Sen. Chris Dodd (Conn.). The amendment stated that provisions in the bailout and stimulus bills that limited compensation payments would not apply to “any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009.” Thus, Sen. Dodd’s amendment legally required AIG to pay the bonuses because they were agreed to months prior. After a public backlash, the House proposed the retroactive tax targeted at individuals who received a bonus.
• Earlier this week, the House of Representatives passed legislation that would expand AmeriCorps to further encourage volunteerism. Republican opposition largely stemmed from the billions of dollars being spent on “paid volunteerism.” The CBO Report for H.R. 1388, the Generations Invigorating Volunteerism and Education (GIVE) Act states that the bill authorizes $9.3 billion over the FY2010-FY2014 period. This is over $3 billion more than last year’s bill. H.R. 1388 passed 321-105.
Review of Senate Activity:
• The Senate Committee on Small Business and Entrepreneurship held a hearing this week entitled “Perspectives from Main Street on Small Business Lending.” The purpose of the hearing was to review the main causes of decreased lending to small businesses. Watch the hearing or read more about here.
• The Senate approved the confirmation of Ron Kirk, former Mayor of Dallas, Texas to be the United States Trade Representative. Trade is a critical component to our economic recovery and for our nation’s small businesses and Ambassador Kirk will play a central role in the trade agenda.
• The Senate passed, for the second time, the omnibus federal lands bill by a margin of 77-20. H.R. 146 combines many separate measures that together designate more than 2 million acres of new wilderness areas in addition to protections for other federal lands. According to CQ, because HR 146 already passed the House once, it will not be open to amendment when it returns to that chamber. The only question will be whether the House should concur in the Senate amendment — which it is expected to do by a simple majority vote.
House Small Business Committee hearing summary this week:
On Wednesday, March 18, 2009, the House Committee on Small Business held a hearing entitled, "The President's FY 2010 Budget and Medicare: How Will Small Providers be Impacted?" The Committee heard testimony from John Preskitt, M.D., Board of Regents, American College of Surgeons; Jeffrey Harris, M.D., President, American College of Physicians; Joseph Heyman, M.D., Chair, Board of Trustees, American Medical Association; Edward Hannon, President and CEO, The McDowell Hospital; and Robert Moffit, Ph.D., Director, Center for Health Policy Studies, The Heritage Foundation.
The hearing examined the health care initiatives in President Obama's budget outline for FY 2010, with a particular emphasis on Medicare reforms and how they would affect small health care providers. Chairwoman Velazquez and Ranking Member Graves noted that there are 45 million uninsured individuals in the U.S., a great percentage of which are small business owners or their employees. They also agreed that the current health care system is not working, and reform should include ways to provide accessible, affordable care to America's small businesses. Ranking Member Graves stated that President Obama's $634 billion "down payment" on health care reform is paid for by: 1) raising taxes on many small business owners who file as individuals; and by 2) Medicare payment changes.
The health care provider witnesses expressed strong support for reforming the Medicare physician payment program. The American Hospital Association noted the unique challenges of rural hospitals, which have a lower volume of patients, lower supply of providers, and higher proportion of Medicare beneficiaries. The American College of Physicians stressed the need for more primary care physicians. Several witnesses discussed the potential pitfalls of President Obama's proposal to bundle Medicare payments for hospitalization and payments for care from post-acute providers. Dr. Moffit of The Heritage Foundation cautioned that President Obama's approach to putting health care reform funding up front and hammering out the details later is contrary to the usual crafting of policy, where the details drive the policy. He also raised concerns that stakeholders may view health care reform as a merely a way to expand existing programs rather than secure real structural change.
Other Small Business off the Hill:
• Americans for Tax Reform released its list of ten ideas how President Obama could help small businesses now.
Looking Forward:
House Small Business Committee hearings next week:
• Full Committee Hearing, March 25, 2009, 2:00PM entitled, “Oversight of the Small Business Administration and its Programs,” 2360 Rayburn House Office Building
• Subcommittee on Investigations and Oversight Hearing, March 26, 2009, 10:00AM, entitled, “Expanding Equity Investment in Small Business,” 2360 Rayburn House Office Building
