President Obama has been trying to rebut the claim that he's antibusiness by promoting something called the Small Business Jobs Act, which would provide loans and temporary tax cuts to small businesses. If you've been paying attention over the last 18 months, you're probably asking, what's the catch?

And sure enough, most of the tax cuts are so narrowly targeted as to be economically trivial. The list includes bonus depreciation, small business expensing and a temporary zero capital gains tax rate for small business start-ups. These would be in place for a year or two and then vanish, which means they'll do little to change business behavior. Only a small fraction of America's 40 million or so small businesses would even qualify for the capital gains cut. But at least all of this would do little harm.

The same can't be said for the most expensive provision of the bill, which creates a new Small Business Lending Fund. Hard as it is to believe, the fund would operate as a new TARP program in which Uncle Sam would take an ownership stake in small banks.

The bill authorizes Treasury to purchase up to $30 billion of stock in small, community banks across the country. The banks in turn would agree to issue as much as $300 billion in loans to small businesses that they wouldn't otherwise lend to. You can bet that many businesses that get the loans will be engaged in not very profitable, but politically correct activities, such as diversity investing and renewable energy. Sound at all like subprime mortgage loans?

Here's the best part: The whiz kids at the Congressional Budget Office and Joint Committee on Taxation estimate that this program will raise $1.1 billion for the federal government. So there really is a free lunch.

The assumption is that these banks will make such wise loans that they'll make a bundle and the Treasury will get its money back in dividends on its preferred stock. But then why not have Treasury invest $100 billion to leverage $1 trillion in new loans? Or why not $2 trillion? If government-directed investment and lending can conjure such returns, the deficit should vanish in no time.

The false assumption here is that banks are reluctant to lend because they lack the capital. This ignores that small business lending is also down because the business demand for loans is weak. Businesses don't typically expand when Washington is raising dividend, capital gains and personal income tax rates while piling on the new costs of ObamaCare and other regulations.

The tax cut in this bill will provide $12 billion in relief over 10 years. The tax increase that Mr. Obama favors for 2011 would raise what the Joint Committee on Taxation figures will be $600 billion of revenues, about half of which comes from the coffers of small business. So the tax hikes, which are permanent, are about 50 times larger than the tax cuts, which are temporary. And the Obama Administration wonders why some people think this President is antibusiness.