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The Daily Wildcat

The Daily Wildcat


    Obama to sign new small biz aid bill Monday

    WASHINGTON — Ending months of partisan delay, the House gave final passage Thursday to a small business tax and lending assistance bill, handing Democrats a legislative victory on the economic issues central to the midterm elections.

    President Barack Obama had pressed Congress to pass the bill despite scant Republican support, and small business owners welcomed his pledge to sign it into law on Monday.

    “”The small business jobs bill passed today will help provide loans and cut taxes for millions of small business owners without adding a dime to our nation’s deficit,”” Obama said. “”After months of partisan obstruction and needless delay, I’m grateful that Democrats and a few Republicans came together to support this common-sense plan to put Americans back to work.””

    The summer-long wait for action was agonizing for small business owners, many of whom have been seeking loans for months in the tight credit market.

    Scott Hauge, president of Small Business California, said the legislation will save many owners from bankruptcy by reducing tax burdens and making it easier to obtain loans.

    “”It’s a really, really big deal,”” Hauge said.

    The bill began with bipartisan interest as both parties see small businesses as vital to the economic recovery. But Republicans opposed a Democratic move to add a $30 billion small business lending fund, which GOP lawmakers compared to the 2008 bank bailout that provided $700 billion to create the Troubled Assets Relief Program.

    The small business bill passed Congress on largely party-line votes.

    Only one Republican, Rep. Walter Jones of North Carolina, voted for the bill Thursday. In the Senate, two Republicans, Sen. George LeMieux of Florida and Sen. George Voinovich of Ohio, both of who are retiring this year, joined Democrats in passing the bill last week.

    The measure was among the last remaining legislative initiatives intended to spur the struggling economy as Congress prepares to adjourn so members can campaign for the midterm elections in November.

    The bill creates the $30 billion lending fund to help smaller banks make loans to businesses, and offers $12 billion in business tax breaks to encourage investment, entrepreneurship and hiring. Democrats estimate the legislation could create 500,000 jobs.

    With the tax cuts, businesses would be able to write off more of their costs of buying equipment or making shop improvements. Individuals who are self-employed could deduct health care costs from the self-employment tax.

    The bill would also continue to waive Small Business Administration loan fees that had been set aside as part of the 2009 recovery package.

    The cost of the bill is offset by closing tax loopholes and increasing tax reporting requirements and penalties.

    The tax provisions in the legislation would be particularly helpful to small businesses, Hauge said. In California, as many as 2 million sole proprietors — people who own the smallest businesses — will save thousands in self-employment taxes that they previously had to pay on health premiums purchased for themselves.

    Derek Rigaud, who is trying to buy a franchise of the children’s hair salon, Snippets, applied for loans from five banks before he was finally approved for a Small Business Administration loan from City National Bank of Los Angeles.

    Thursday’s passage of the small business bill means he will save $4,400 in fees on the $195,000 loan.

    “”The savings will definitely help,”” Rigaud said. “”Any kind of savings you can get will put more money into the business.””

    Jim Wullschleger, who heads small business lending for City National Bank, said the measure would allow his institution and others to increase their lending to small businesses and spur the creation of new jobs.

    The long wait for approval was frustrating, Wullschleger said. “”It just put people into limbo.””

    Kent Peterson’s Long Beach company, P2S Engineering, was approved for a $1.2 million loan SBA to renovate its Long Beach headquarters in April, before funds for the loan program were exhausted.

    Without the additional funding approved Thursday, the company’s loan would have been cut significantly, and P2S would have had to pay an additional $35,000 in fees.

    The renovations, initially scheduled for last summer but were delayed while Congress bickered about the bill, will start next month.

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