|The bill “is not the way to get our economy moving again,” said GOP Senator Scott Brown.|
Small-business tax breaks clear a hurdle in the Senate
Brown decries plan, calling it a new bailout; End of filibuster a win for Obama
WASHINGTON — Senate Democrats, bolstered by the support of two retiring Republicans, beat back a filibuster yesterday to clear the way for a bill packed with tax breaks and other benefits for small businesses.
The measure, which was opposed by Senator Scott Brown of Massachusetts and 36 of his GOP colleagues, would create a $30 billion government fund to encourage lending and would eliminate capital gains taxes for long-term investors in some small businesses.
President Obama has called it a much-needed salve for small businesses struggling to recover from the recession.
Last week Senator George Voinovich, an Ohio Republican, chided his party’s foot-dragging on the bill and vowed to support it, the first of several economic initiatives the White House has been pushing since Congress returned from its summer recess. George LeMieux of Florida joined Voinovich to support closing debate on the bill, which clears it for final passage this week. Neither man is seeking reelection.
Brown, however, called the bill another bailout.
“This bill includes a provision just like TARP,’’ he said after voting against the bill. “Banks making lending decisions with government funds is not the way to get our economy moving again.’’
His Senate Democratic counterpart, John Kerry, declared the vote a victory. “This bill provides vital aid to the small businesses that can drive growth and create jobs in these tough economic times,’’ Kerry, who previously chaired the Senate Committee on Small Business and Entrepreneurship, said in a statement.
Kerry wrote some of the provisions in the bill, including an extension of some Small Business Administration lending programs and fee waivers.
In Massachusetts, some 2,270 small businesses have taken advantage of those programs since they were enacted last year, according to SBA figures.
“Thriving small businesses are ready to expand and hire new workers but just need access to capital to make it happen,’’ Kerry said.
The cracking of the filibuster handed a major victory to Obama. The centerpiece of his package of initiatives is an extension of Bush-era tax cuts for middle-income voters, but that measure remains mired in partisan bickering, with members of the Senate GOP saying they will block it unless tax cuts are also extended to wealthier Americans.
After the 61-37 vote on the small business bill yesterday, senators are expected to give it final approval, which requires a simple majority. House Democratic leaders have said they would quickly pass an identical version of the bill for Obama’s signature.
“Today’s vote brings us one step closer to ending the months-long partisan blockade of a small business jobs bill that was written by both Democrats and Republicans,’’ the president said in a statement. “This is a bill that would cut taxes and help provide loans to millions of small business owners who create most of the new jobs in this country.’’
The new $30 billion fund would be available to community banks with fewer than $10 billion in assets to encourage lending to small businesses. The bill would combine the fund with about $12 billion in tax breaks aimed at both large and small businesses.
The tax cuts in the bill include breaks for small restaurant owners and retail store owners who remodel or build stores. Also, larger businesses could more quickly recover the costs of capital improvements through depreciation. And the measure would allow small-business owners to deduct costs of health insurance for themselves and their families from self-employment taxes for the 2010 tax year.
Much of the bill would be paid for by allowing taxpayers to convert 401(k) and government retirement accounts into Roth accounts, in which they pay taxes up front on the money they contribute, enabling them to withdraw it tax-free after they retire. Taxpayers who convert accounts this year would pay the taxes in 2011 and 2012, generating an estimated $5.1 billion.
“It’s the right thing to do,’’ LeMieux said. “It’s going to be very good for my state. We have got almost two million small businesses. They are struggling. I visited businesses over August, and they can’t get financing.’’
Democrats say banks should be able to use the lending fund to leverage up to $300 billion in loans, helping to loosen tight credit markets.
“This bill is about righting a wrong that was done to small business when Wall Street closed Main Street down and cut off access to capital,’’ said Senator Maria Cantwell of Washington.
“Small businesses are holding off on hiring while they wait for us to act,’’ said Senate Majority Leader Harry Reid, Democrat of Nevada.
Material from the Associated Press and The New York Times was used in this report. Donovan Slack can be reached at email@example.com.