Obama: Making Friends Not Small Business Loansby Gerri Willis
It was a heartwarming moment on the campaign trail this weekend when the President got a big hug from a pizza restaurant owner in Florida. The President has made no bones about how helping small business owners has been a critical mission for his administration.
In fact, he seems downright effusive in his compliments.
“We honor the strivers, the dreamers, the risk- takers, the entrepreneurs who have always been the driving force behind our free enterprise system, the greatest engine of growth and prosperity that the world's ever known.”
But what do small businesses need most? Money. Yet, while the President claims getting loans to small businesses is a top priority. The reality is loans to small business have tanked- that's according to the federal government.
Total loans to businesses with less than $1 million in sales are down 60% in just the two years ended in 2010. More than $634 billion in 2006 to under $607 billion in 2011.
Meanwhile, the government's own loan program has fallen short of expectations. According to the government accountability office, Obama's small business lending fund was expected to loan out $30 billion, but it funded just 332 of 935 applications. At the end only $4 billion was lent out.
The claim of the President's that he has cut taxes 18 times for small business may be true, but according to NFIB Tax Counsel, Chris Whitcomb, “much of it is small potatoes.”
True there’s a program to allow companies to write off $250,000 in investments on machinery and equipment, but this is an extension of an existing program. Nothing new from the President. And one that expires at the end of the year.
Other benefits, well they are less exciting like the cell phone deduction. That's nice but deducting the costs of your cell phone for business use isn't going to save anyone enough money to buy equipment or hire a new employee.
Some of the tax breaks are simply more applicable to big businesses rather than small ones, like the tax loss carry forwards.
The big problem says Whitcomb, is that because so many of these breaks are temporary, they are nothing small business operators can count on going forward.
It's no wonder small business optimism cratered this summer, diving to the lowest level in nine months in July and August was barely better.
Obama's claims about his support of small business turn out to be just that. Claims. These are the folks that need our support because they are the ones who hire and they did build that!