Normally this space on Friday is reserved for the weekly small business news roundup, but there is simply no story that comes close to the importance of the Senate’s passing of the so-called “Small Business Bill” this week.
The main provisions of this legislation would create a $30 billion government fund available to community banks to lend to small businesses, build up the Small Business Association (SBA), and also cut taxes for small businesses. The bill heads to the House next week, and if passed, will move on to the White House for President Obama’s signature.
Although there was a threat of filibuster, two Republicans crossed the aisle in voting for the bill: George Voinovich of Ohio and George LeMieux of Florida. Voinovich will retire at the end of his term, while LeMieux isn’t seeking re-election.
For those of you who were hoping the bill would address the “1099” requirement created by health care reform — no such luck. The health care bill requires businesses to report payments to vendors for anything over $600, which both Democrats and Republicans agreed on amending. Unfortunately for small businesses, though, they couldn’t agree on how to pay for the measure, so it was dropped from the Small Business Bill entirely.
One of the key provisions regards the funding of the bill; part of its cost will be covered by letting taxpayers roll over their current retirement accounts to ROTH 401(k) plans. This would help raise money for the government as contributions in ROTH 401(k) plans are taxed now and leave distributions later, such as at retirement, untaxed. Regular 401(k) plan contributions, on the other hand, are not taxed now, but the distributions are later taxed when received.
While the Obama administration maintains that this bill will create jobs and help jumpstart the economy by opening up credit to more small businesses, Republicans counter that the extra money will encourage banks to lend money to risky borrowers.
Do you think the Small Business Bill will encourage more entrepreneurs and help get the economy moving? Or do you see this as another bailout bill that won’t do much to make things better?