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Straight Talk E-News
Small Biz Straight Talk
Washington,
April 3, 2009
Friday, April 3, 2009 News from Ranking Member Sam Graves and Committee Republicans: Must-Reads from the Week: Administration and the SBA: Review of House Activity: • On Thursday, the House passed H.R. 1256, The Family Smoking Prevention and Tobacco Control Act. This legislation would grant broad new authority to the Food and Drug Administration to place new restrictions on the manufacture, distribution, advertising, labeling, disclosure, promotion, sale and use of tobacco. The new authority would be funded through a tax on tobacco companies, which is in addition to the new tax that took effect as a result of SCHIP legislation. • On Wednesday, the House passed two bills, H.R. 1664, and H.R. 1575, to reign in excessive executive compensation for companies that received TARP funds. H.R. 1664 permits the Treasury Secretary to identify “unreasonable” and “excessive” compensation and obstruct payments to firms receiving TARP funds. Furthermore, H.R. 1575 establishes bankruptcy laws regarding “excessive” compensation for companies who have received over $10 billion in TARP funds since September 2008. The bill authorizes the Attorney General to retroactively recover any "excessive payments" to an employee by a firm that may have gone bankrupt without government intervention. • This week the House cleared Senate Amendments to H.R. 1388, the Generations Invigorating Volunteerism and Education Act (GIVE). The GIVE act authorizes additional money to be spent on volunteerism over the next five years. If fully funded, this legislation will cost $5.7 billion dollars and create 250,000 taxpayer funded volunteers by 2017. 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. Luetkemeyer Seeks Cosponsors for H.R. 1842, Expanding Entrepreneurship Act of 2009. The SBA’s entrepreneurial development programs are intended to assist entrepreneurs with practical and technical skills needed to help start and grow their businesses. H.R. 1842 makes several changes to the SBA’s entrepreneurial development programs -- at no cost to taxpayers -- by pulling resources for duplicative government programs into a streamlined and effective program to help emphasize job creation and retention. To make these widely used programs more responsive to the needs of small businesses, H.R. 1842 establishes planning standards within these programs; requires maintenance of an entrepreneurial development database; and ensures community specialists serve in all SBA district offices. The bill also requires the SBA to develop a job creation strategy for 2009-2010. If you wish to become a cosponsor of this legislation, please contact Ali Gabel or call 5-2956. • Rep. Schock and Rep. Minnick Seek Cosponsors for Bipartisan Legislation to Help American Small Businesses. The Reclaiming Earnings to Lift Individuals, Employers and Families (RELIEF) Act, creates a six-month payroll tax holiday for employers and employees of small businesses with 50 or fewer workers. The RELIEF Act would also increase cash flow to small business owners giving them additional revenue they need to meet payroll, pay for employee benefits, cover regular business expenses and invest back in their company through new employees or other forms of capital. The RELIEF ACT stimulates economic growth by requiring the small business owners to reinvest payroll tax savings in their own businesses by hiring new employees or purchasing capital that will allow their business to become more efficient, productive, and profitable. One recent study by professors at Stanford and Rutgers estimated that suspending only 40% of the tax could create between 2 and 4 million jobs. The RELIEF Act suspends 100% of the payroll tax for six months, including those paid by employees. Returning money to workers directly in their paychecks is an incentive for workers to spend more and will help to alleviate ordinary costs that a typical household faces. Legislation is top legislative priority for NFIB for the 111th Congress. If you would like to become a cosponsor of the RELIEF Act, or if you have additional questions, please contact Mark Roman in Rep. Schock’s office at mark.roman@mail.house.gov or 5-6201. • Rep. Glenn ‘GT’ Thompson seeks cosponsor for H.R. 1807 The Educating Entrepreneurs through Today’s Technology Act of 2009,. Small businesses are the backbone of our economy, and while our rural communities are experiencing high unemployment rates, the entrepreneurial spirit remains alive and well. What is lacking is the opportunity and ability to tap into resources that will foster further economic development and provide prospective entrepreneurs with the same access afforded to their suburban and urban counterparts. H.R. 1807 will allow third parties the opportunity to provide high-quality tele-distance training through a completive grants process administered by the SBA. If you would like further information or to cosponsor this legislation, please contact Matthew Brennan or call 5-5121. Review of Senate Activity: • The Senate approved on Thursday its 2010 Budget Resolution with no Republican support and two Democrats voting against it. The passage of this legislation paves the way for President Obama’s tax, energy, and health care policies to move forward. The bill totals $3.5 trillion for FY 2010. House Small Business Committee hearing summary this week: A small business owner, Kit Smith from Pleasant Valley, Missouri, detailed his experience undergoing an IRS audit. After an employee embezzled $58,000 from the business, she then tried to cover her theft by switching employer identification numbers. The IRS discovered the switch, and contacted Mr. Smith about an audit. The initial IRS investigation found that Mr. Smith had paid all taxes and the IRS actually owed Mr. Smith. A second agent later said that Mr. Smith owed the IRS. The IRS audited Mr. Smith’s sole proprietorship, a corporation and two LLCs in 2007 back to 1989. He has paid the amount the IRS says he owes, but he believes he has now paid the tax three times. He estimated that he spent over 100 hours on the audit, and that his employees also spent over 100 hours. This time, which he can never recover, could have been invested in his business. Mr. Smith also testified that the stimulus law contained nothing that helps his business, and the law’s additional compliance requirements, such as notice and recordkeeping for the extended employee COBRA provisions, make the already crushing tax burden on small firms even heavier. He stated that the federal government can help small business create jobs first and foremost by lowering taxes. Lower taxes would also allow companies to purchase equipment without taking on additional debt, and offer a competitive benefits package to employees.
• The Committee on Small Business held a hearing on April 2, 2009 entitled Legislative Initiatives to Modernize SBA’s Developmental Programs. This hearing examined the state of entrepreneurial development programs at the SBA in light of the current economic climate. Six witnesses testified at the hearing. Witnesses included representatives from Manasota SCORE, The National Center for American Indian Enterprise Development, Illinois SBDC at Bradley University, Northeast Veterans Business Resource Center Inc., the Community Education Council of Elk and Cameron Counties, and Rural Enterprise of Oklahoma. The Office of Entrepreneurial Development (OED) at the Small Business Administration assists entrepreneurs with practical and technical skills needed to start and help grow their businesses. The office carries out this mission through a network of educational resource partners including Small Business Development Centers (SBDCs), Women’s Business Centers (WBCs), the Service Core of Retired Executives (SCORE), and the Small Business Training Network. In addition to the programs under the oversight of OED are programs run by the office of Native American Affairs and the office of Veterans Business Development. Both offices also work to bolster entrepreneurship in the Native American and veterans communities. Most witnesses acknowledged that a great deal more could be done to increase coordination among all entrepreneurial development programs at the SBA to eliminate duplication and reduce waste. It was also widely agreed that new initiatives focused on improving the resources available to entrepreneurs who participate in SBA entrepreneurial development programs will go a long way in assisting them through today’s difficult economic climate. This hearing was the second hearing three entrepreneurial development hearings that will take place this session.
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