By Peter Marcus, DENVER DAILY NEWS
Lawmakers and candidates from Colorado were split down party lines yesterday on the U.S. Senate’s long-awaited vote backing a $30 billion small business lending bill.
Democrats praised the Senate yesterday for creating a fund that the government would invest in for independent community banks to encourage lending to small firms. But Republicans immediately used the vote to call for opposition to a proposal by President Obama that would raise income taxes on the wealthiest 3 percent of U.S. households.
In addition to creating a $30 billion fund, the Small Business Jobs Act backed by the Senate yesterday would also exclude from taxes all capital gains on sales of small-business stock, and ease tax rules for expending and depreciating equipment. Tax breaks in the bill total $12 billion.
Democrats estimate the measure could create 500,000 new jobs. Some 8 million jobs have been lost since the recession began in late 2007, and a sobering report released yesterday points out that the U.S. poverty rate rose to 14.3 percent in 2009 from 13.2 percent the year before, bringing the percentage of the population living in poverty to the highest level since 1994.
Two Republican senators broke with their party on Tuesday to give Democrats the votes they needed to advance the small business lending bill. The 61-38 vote sends the measure back to the House, which has passed a similar bill and is expected to quickly approve the Senate’s version.
U.S. Sen. Mark Udall, D-Colo., criticized Republicans yesterday for “partisan delays and obstruction” of the bill. A Udall amendment that would have expanded the ability for credit unions to lend to small businesses was not included in the bill. But the senator said the bill will still help small businesses create thousands of new jobs.
“As I’ve traveled across Colorado, small business owners have told me they are poised to grow, they just need access to capital so they can expand and hire new workers,” Udall said in a statement. “This legislation will help turn that around without costing taxpayers a dime.”
Ryan Frazier, Republican candidate for the 7th Congressional District, used the vote yesterday as an opportunity to encourage Democrats to abandon a plan to let tax cuts expire from former Republican President George W. Bush’s era. The tax cuts for the wealthiest Americans expire at the end of this year. The proposal calls for letting the tax cuts expire, while extending lower tax rates for individuals earning less than $200,000 and families earning less than $250,000.
Frazier said the proposal would lead to “the largest tax increase in American history.” He tied the proposal to the vote yesterday by stating that the plan would have a negative affect on small businesses, as well as investors and American families. Frazier also made mention of the poverty report.
“Our poverty rate is completely unacceptable,” said the congressional candidate. “Businesses need regulatory certainty to invest and create new quality jobs for Americans.”
Frazier’s opponent, incumbent Congressman Ed Perlmutter, D-Lakewood, is in favor of the Obama proposal to let tax cuts for the wealthiest Americans expire, according to his spokeswoman, Leslie Oliver.
“Ed needs to see what the exact details of the proposals are, but generally speaking, he’s consistently supported extending middle class tax cuts for those earning less than $250,000 per year. He does not support extending tax cuts for the millionaires and billionaires,” she said.
Perlmutter had introduced an amendment to the House version of the small business lending bill that aims to increase loans for small businesses by allowing small banks to temporarily amortize their losses on commercial real estate. Banks with less than $10 billion in assets would be allowed to amortize their losses on commercial real estate over a seven-year period. The goal is to provide small community banks with more liquid capital to make loans.
The Senate version of the bill did not include a similar proposal.
“Unfortunately, unlike the bill the House passed in June, the Senate version does not include my amortization amendment, which would enable community banks to write down real estate losses over a six- to ten-year period, which would free up more capital for small businesses,” wrote Perlmutter in a statement. “This would allow more credit to flow to Main Street so small businesses could expand, buy inventory or hire new employees.”
Congresswoman Diana DeGette, D-Denver, also lashed out at Republicans for using the small business lending vote as an opportunity to criticize Obama’s plan to let Bush-era tax cuts expire at the end of the year.
“It is disappointing that small businesses across the country were denied relief while Senate Republicans tried to score political points by denying a vote on this legislation,” DeGette said in a statement. “I hope that my colleagues on the other side of the aisle do not make the same mistake as we discuss extending the Bush-era cuts.”