Strategies: Hey, Mr. President, what about small businesses?
— -- Hey, Mr. President and members of Congress, as long as you're handing out money to huge corporations, how about doing something for small business?
President Bush argued that one reason he's pushing the bailout is to protect the "small business owners ... on Main Street." Well, I live and work on Main Street, and just giving banks a bailout represents another "trickle down" theory. Congress needs to make sure that small businesses are taken care of directly.
Small businesses keep this economy afloat. They create the majority of new jobs; they're fast and flexible. It would take far less than 1% of the $700 billion bailout (geez, that's a lot of money) for small businesses to create hundreds of thousands of new jobs and help re-energize this economy.
Here are some of the things Congress could do immediately for small business and the economy:
•Hire Your First Employee Tax Credit:More than 20 million small companies have no employees. If a mere 1% hired even one employee, we'd create 200,000 new jobs. But it's a big hurdle — financially and emotionally — to take that step. Giving a 25% tax credit for the first year of employment would encourage many non-employer businesses to finally expand.
•Credit card fairness:Small businesses overwhelmingly use credit cards to finance their businesses. But credit card issuers can raise interest rates at any time, use "due date" gimmicks and retroactively raise rates even if you pay them on time. The House has passed a Credit Card Holders Bill of Rights, but it hasn't passed yet in the Senate. As we hand banks $700 billion, we can at least make sure they treat us fairly.
•Small Business Administration loans:Having trouble getting an SBA loan? There's a reason: "Since 2005, there's been zero funding of the SBA 7A loan guarantee program, the flagship program of SBA," according to Molly Brogan, vice president of public affairs at the National Small Business Association. "Between 2006 and 2007, 368 banks dropped out of the program. Those are a lot of the smaller community banks that are out there on Main Street lending to local businesses." Keep in mind that, according to Brogan, for every $33,000 loaned in this program, a job is created or retained, and you realize how smart it would be for Congress to restore the funding cut from the SBA 7A program.
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