Small business lending plan signed by Obama backed by Minnick
A new $30 billion plan signed by President Barack Obama to encourage banks to loan to small businesses was supported by Democratic Rep. Walt Minnick, but opposed by Idaho’s three GOP members of Congress.
“Government can’t guarantee success, but it can knock down barriers to success, like the lack of affordable credit,” the president said in a signing ceremony for the legislation. He also said it has the potential to create jobs.
The legislation creates a $30 billion Small Business Lending Fund that banks could access to offer loans to small businesses for the next 10 years. It also gives states $2 billion to help spur bank lending to businesses and offers businesses some tax breaks.
The non-partisan Congressional Budget Office, which forecasts the cost of proposed legislation in Congress, said the lending and tax credit plan would cost up to $3.3 billion during the next five years.
Minnick’s spokesman, Dean Ferguson, said the loan fund makes community banks liquid so they can lend to small businesses that need to expand and hire people to boost our economy.
Rep. Mike Simpson joined Sens. Mike Crapo and Jim Risch, as well as the majority of Republicans in Congress, in opposing the plan.
“If we want our economy to turn around, we need to provide small businesses with the tools they need to succeed, but this bill takes us in the wrong direction,” Simpson said in a prepared statement. “There is no requirement that banks actually use the money they receive through the new $30 billion program created in this bill to loan money to small businesses. The TARP program should have been ended a year ago, but instead this bill allows banks to convert TARP money into this new programs and escape the restrictions and oversight that Republicans insisted be included in TARP.”
A spokesman for Risch said one reason the senator opposed the plan because it fails to fix a new tax reporting requirement for small businesses that came into effect due to new health care laws approved by Congress earlier this year.
Some Republicans referred to the small business plan as TARP, Jr., referring to the Troubled Asset Relief Program that bailed out financial institutions in 2008. Minnick’s Republican opponent in the general election, state Rep. Raul Labrador of Eagle, called the legislation “TARP III.”
“TARP III raises troubling questions about where Congress thinks constitutional limits exist,” Labrador said on his campaign website. “TARP III allows the federal government to purchase ownership interests in banks.” Labrador also said that the plan is part of the current Congress’ spending madness.