Franken Demands Immediate Congressional Hearings re Banks' Abuse of $700 Billion Bailout

Minnesota DFL candidate Al Franken -- the only U.S. Senate candidate who opposed the $700 billion Wall Street bailout -- today called for immediate hearings in light of reports indicating that banks may not be using those funds to unfreeze credit markets but, rather, for other purposes -- with the encouragement of the Treasury Department.

"Washington sprung into immediate action when Wall Street was in trouble, but there's been no help for struggling homeowners on Main Street and no solutions for middle-class families and small businesses hurt by the failed economic policies of the last eight years," said Franken. "And now we find that the $700 billion bailout is being used not to solve the problem, but to handpick winners and losers on Wall Street. That's an outrage.

"Taxpayer dollars should be helping taxpayers, not going to pad the bottom lines of the Wall Street bankers whose bad bets got us into this mess. This is exactly why we should never have passed this bill without proper accountability. And it's time for Congress to take action."

Earlier this month, the Bush administration announced that it would use bailout funds to inject capital directly into banks. They claimed that this would allow credit to start flowing again as banks lent that money to other entities. But recent reports indicate that, instead, the banks receiving these funds are using them to buy up other, smaller banks. And the Treasury Department, according to a column by New York Times financial columnist Joe Nocera, is encouraging the practice.

Meanwhile, Wall Street financial institutions like Morgan Stanley and Merrill Lynch continue to pay out billions in bonuses, despite receiving bailout funds.

This morning, during his statewide "For The Middle Class, For A Change" bus tour, Franken stopped at Bouquets by Carolyn, a small business located in St. Paul, Minn. There, he called for:
* Immediate hearings into potential abuses of the $700 billion bailout by Wall Street banks
* Straight answers from the Bush administration on its real plans for these taxpayer dollars
* An administration guarantee that banks receiving bailout funds will use them to lend
* A revocation of U.S. Treasury Department Secretary Henry Paulson's authority to implement the bailout if he cannot explain how his plan is serving taxpayers

In an editorial today, the New York Times wrote, "Shortly after the bailout was enacted, The Times's Mark Landler reported that Treasury officials also wanted to steer the bailout billions to banks that would use the money to buy up other banks. Now, lo and behold, with $250 billion in bailout funds committed to dozens of large and regional banks, it turns out that many of the recipients of this investment from taxpayers are not all that interested in making loans. And it appears that Mr. Paulson is not so bothered by their reluctance."

Case in point: Merrill Lynch. Two days ago, Bloomberg reported that, while Merrill Lynch is laying off employees, the financial institution is paying out billions in bonuses. According to Bloomberg, "Five straight quarters of losses and a 70 percent slide in its stock this year haven't stopped Merrill Lynch & Co. from allocating about $6.7 billion to pay bonuses ... The money Merrill has set aside for bonuses equates to an average $110,000 for each of its 60,900 people, up from $108,000 a year ago because more than 3,000 jobs have been cut."

Apparently, Merrill Lynch isn't the only bailout recipient that's utilizing taxpayer funds to reward its employees. Bloomberg also reported that Morgan Stanley and Lehman are both setting aside billions for bonus payments. According to Bloomberg, "Even some employees at Lehman Brothers Holdings Inc., which declared the biggest bankruptcy in U.S. history last month, will get the same bonus they received a year ago ... Morgan Stanley, the second-biggest securities firm until it also converted to a bank, has $6.44 billion for bonuses, or $138,700 per person, down 20 percent from last year."

GoodBiz113's take: Al Franken is right: Congressional oversight is needed, post-haste, to hold the Wall Street bailout recipients accountable for seeing that taxpayer funds are used to help fuel America's economy [e.g., small businesses, homeowners, working families], as intended -- not to lavishly reward their own fat-cat executives and employees.

SOURCES: Al Franken for U.S. Senate, Bloomberg, New York Times
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Kerry Honors Women Entrepreneurs on Anniversary of Women's Business Ownership Act

Twenty years after important women’s business legislation was signed into law, Sen. John Kerry [D-Mass.], chairman of the U.S. Senate Committee on Small Business and Entrepreneurship, recognized the progress women entrepreneurs have made in developing innovative and prosperous small businesses. The Women’s Business Ownership Act [H.R. 5050] -- the first comprehensive small-business legislation aimed to help women entrepreneurs succeed -- marked its official anniversary on Saturday.

“As the fastest-growing segment of the nation’s business community, employing more than 7 million workers and pumping over $1 trillion into the economy, women entrepreneurs are vital to the growth of this nation,” said Kerry. “Despite the immense progress made in the last 20 years, women still face hurdles.”

One of the biggest challenges still facing women business owners is gaining equal access to government contracts. While women-owned firms account for 30 percent of all small businesses, they receive less than 3.5 percent of federal contracts -- far short of the five percent goal.

To help women compete for federal contracts, Congress passed the Equity Contracting for Women Act of 2000 [H.R. 4897], a set-aside program to provide federal contracting assistance to small-business concerns owned and controlled by women. In September, the Small Business Administration [SBA] finalized a rule for the program that seriously undermines women’s ability to compete for contracts, because of the narrow definition they applied to the program -- labeling just 31 of 140 industries studied as underrepresented.

Women entrepreneurs have lost more than $6 billion in potential revenue over the last eight years because of a lack of access to contracts. Kerry continues to push for a wider, more inclusive, definition for the program.

“Eight years ago, when Congress passed this law, our intent was to level the playing field for women entrepreneurs,” Kerry noted. “This ruling does the opposite, creating more roadblocks for women. Any meaningful change that we could have enacted through this program has now been vastly constrained.”

Kerry has also worked in a bipartisan manner to strengthen the more than 100 Women's Business Centers across the country. Last year, Kerry led passage of an amendment providing permanent funding for established centers, and successfully urged the Administration to implement the new program immediately.

In addition, Kerry pushed SBA to correct management practices, after Inspector General and U.S. Government Accountability Office reports found massive management failures of the Women’s Business Center program. Since the September hearing, management has significantly improved.

“We must do everything in our power to help encourage entrepreneurship in these difficult economic times,” said Kerry. “When run properly, these business centers are valuable resources that help to stimulate innovation, create jobs and boost our economy.”

GoodBiz113's take: Sen. John Kerry, a longtime champion of small businesses, is to be lauded for his diligent efforts -- especially on behalf of women-owned enterprises seeking those elusive federal contracting dollars. Thank you, Sen. Kerry!

SOURCES: GovTrack.us, Library of Congress, U.S. Senate Committee on Small Business and Entrepreneurship
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'Jobs, Baby, Jobs': Al Franken Wins Fourth Debate by Focusing on Minnesota's Middle Class, Small Businesses; Kicks off GOTV Bus Tour

By all accounts, Al Franken won his fourth consecutive U.S. Senate debate last night -- not by yelling the loudest or throwing the most elbows at his opponents, but by focusing on his middle-class economic agenda.

"Al Franken is proving that you don't need to be a career politician to win debates if you're the candidate of change in an election that's all about change," said Andy Barr, Al Franken for U.S. Senate communications director, just after the debate ended.

"Tonight, Minnesota voters saw that it's Al Franken who will be a strong voice for the middle class," Barr noted. "It doesn't matter how slick his opponents' rhetoric is, or how many elbows come his way. Al Franken won this debate for the same reason he'll win this election: He's the candidate of the middle class, and the candidate of change."

Perhaps in recognition of Al Franken's recent lead in public polls, both Norm Coleman and Dean Barkley frequently attacked Franken. But Franken stayed focused on his core economic message.

"The reason I voted against -- or would have voted against -- the bailout package, is that it didn't really do anything on golden parachutes and bonuses," Franken noted during the dabate. "That's one of the many reasons...

"Look, people are hurting, and we need to get the economy working again. Now my mantra is 'jobs, baby, jobs,' and here are the things that I would do to keep the jobs that we have and create new jobs:

"One, build. Build new bridges and roads and schools... infrastructure. We've always built infrastructure, and it always has a multiplier effect and creates good jobs.

"Secondly, let's address the housing crisis head-on. I agree with Barack Obama: We have to help families -- who, through no fault of their own, are in trouble -- stay in their homes.

"Third, let's stop rewarding companies that are offshoring our jobs, American jobs, overseas. They're getting tax breaks; we should stop that.

"OK, let's get credit into the hands of small businesses. That's fourth.

"Fifth, a green economy. Let's make Minnesota the epicenter of a green economy that can create hundreds of thousands of jobs.

"Finally, [get] tax cuts into the hands of the middle class. The middle class is the engine of our economy. We have to stop tilting all these tax cuts and tax giveaways to the special interests."

"For The Middle Class, For A Change"
This morning, Al Franken kicked off his "For The Middle Class, For A Change" get-out-the-vote bus tour at a DFL get-out-the-vote rally in St. Paul. The rally launched a statewide barnstorm of Minnesota for the last 10 days of the campaign.

Franken called for fundamental change in Washington, detailed a bold economic agenda for Minnesota's middle class, and urged supporters to take action as part of the DFL's grassroots GOTV campaign. The unprecedented campaign will involve 77,000 volunteers making 1.5 million phone calls and 2.8 million door-knocks before Election Day.

"Folks are frustrated, they're anxious, and, frankly, they're outraged -- and they have a right to be all three," Franken declared. "Washington just isn't working for Minnesota's middle-class families. And if we want change, we're going to have to work for it.

"I want to go to Washington and work with President Barack Obama and Sen. Amy Klobuchar to stand up for Minnesota's middle-class families. And I'm calling on everyone who's ready for change to stand with me in this campaign."

Al Franken also detailed his plan for rebuilding the middle-class economy:

* Bring back oversight on Wall Street and address the housing crisis
* Cut taxes for middle-class families
* Make health care and college more affordable
* Protect Social Security
* End giveaways to special interests, like big drug and oil companies
* Repeal tax breaks for companies that ship American jobs overseas
* Create jobs by investing in infrastructure and renewable energy
* Make credit available to small businesses

Today, Franken headed to St. Paul, Albert Lea, Austin and St. Peter; Vice President Walter Mondale joined Franken in Austin and Albert Lea. Tomorrow, Franken will campaign with Congressman Keith Ellison in St. Paul and Minneapolis.

On Monday, Franken will visit St. Cloud, Morris, Crookston, Climax, Moorhead, Brainerd and Bemidji. Congressman Collin Peterson will join Franken for several events throughout the 7th Congressional District.

GoodBiz113's take: It's no wonder that Al Franken carried the day with his strong, clear and focused economic agenda for Minnesota's middle-class families and households, and small businesses. Franken truly is the candidate of change for Minnesotans, and all Americans will benefit from his win-win-win vision and service in the U.S. Senate.

SOURCES: Al Franken for U.S. Senate, Twin Cities Public Television
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Kerry Responds to Bush Administration's Failure to Meet Its Small-Business Contracting Goals

Sen. John Kerry [D-Mass.], chairman of the U.S. Senate Committee on Small Business and Entrepreneurship, released the following statement regarding the Bush Administration’s failure to meet its small-business contracting goal. This comes after yesterday's release of the Small Business Administration’s [SBA] annual contracting Scorecard, which shows that just 17 of 24 federal agencies met their 2007 small-business contracting goal:

"For the second year in a row, the Bush Administration has short-changed America's small businesses. But the fact that the government missed its contracting goal isn't even the worst of it. Like the administration itself, the numbers just can't be trusted. They don't count the millions of small-business contracts that have slipped through the cracks and gone to corporate giants.

"Eight years of budget cuts and lax oversight show that the Bush Administration thinks small equals less important. Given the impact entrepreneurs have on our economy, we need leadership that is more aggressive in giving small businesses the chance to succeed in the federal contracting arena."

SBA’s Scorecard builds on a series of significant initiatives the agency began two years ago to improve small-business access to federal contracts. SBA, along with the Office of Federal Procurement Policy, ordered the federal contracting database to be scrubbed, removing many cases of non-profits, state or local governments, and large companies that were recorded erroneously as small businesses.

The annual Scorecard rated federal agency performance in meeting the overall small-business goal and the component contracting goals for small disadvantaged businesses, small businesses in HUBZones, and small businesses owned by women, and service-disabled veterans.

The following 17 agencies met their small-business contracting goals: the departments of Veterans Affairs, Agriculture, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, State, Transportation, Treasury, and the Environmental Protection Agency, General Services Administration, National Aeronautics and Space Administration, Nuclear Regulatory Commission, Office of Personnel Management, and SBA.

GoodBiz113's take: America's small-business owners, entrepreneurs and self-employed folks are fortunate to have Sen. Kerry advocating on our behalf, to see that we're awarded the contracts that have been set aside for us -- at least 23 percent of all federal contracts, according to Federal Acquisition Regulation [FAR] -- Part 19 standards. Hopefully, the next Administration will be much fairer in spreading the wealth of federal contracting dollars, and all 24 agencies will meet their small-business contracting goals across all components.

SOURCES: U.S. Senate Committee on Small Business and Entrepreneurship, U.S. Small Business Administration
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Franken Proposes Bold Economic Solutions for Middle Class, Main Street

DFL U.S. Senate candidate Al Franken today addressed the Humphrey Institute 2008 Candidate Forum at the University of Minnesota. In his remarks, Franken called for bold action to help Minnesota's middle class: cutting taxes on working families; ending giveaways to special interests and companies that outsource; creating jobs by investing in short-term infrastructure projects; and helping small businesses find credit in an uncertain economy.

Franken also reiterated his opposition to the $700 billion Wall Street bailout, describing his concerns with the lack of oversight for the financial-services industry and the failure of Washington to address the housing crisis that sparked the economic downturn.

"We have got to change the way Washington handles the economy," Franken told the audience. "There are too many people there who believe that wealth comes from the top -- that what drives our economy is when a CEO gets a big tax cut and builds, oh, I don't know, a seventh house.

"Well, I guess that does create a few jobs, especially if it's a really fancy house. But I grew up in a middle-class family in St. Louis Park [Minn.]. And I know that it's the middle class that is the engine of prosperity in America. And what drives our economy is when everyone has a good job, and makes a decent wage, and we're building millions of homes.

"So, I believe that if we're going to re-build our economy in the wake of this massive collapse, it's going to start with re-building the middle class. That means stopping the giveaways to the special interests and putting more money in middle-class family budgets. And it means creating and protecting good jobs that offer people a chance to get ahead.

"This bailout was the exclamation point on eight years of economic mismanagement. Now is the time for us to change fundamentally the ways of Washington, so that at least it might, indeed, be the end of the sentence.

"And if we make that change, we'll be alright. We are Americans. We are the country that beat communism and beat fascism, and we can beat this crisis.

"But the people who will get our economy moving again don't work on Wall Street. They work here on Payne Avenue and in every city and town in this country. They own body shops and hair salons, and they sell bicycles and lawnmowers and homemade cookies. And, you know what? They need help. They need it now. And it's time Washington got to work."

SOLUTIONS FOR THE MIDDLE-CLASS ECONOMY: AL FRANKEN'S PLAN TO CREATE JOBS IN MINNESOTA

Al Franken believes that we need fundamental change from the policies that have put our economic security at risk. But the best way to emerge from the current economic downturn is by creating and protecting middle-class jobs here in Minnesota.

A Lifeline for Minnesota Small Businesses
Minnesota's small businesses -- which create four out of every five jobs in our state -- are paying the price for the mess on Wall Street. They are finding it harder and harder to obtain the credit they need to cover start-up costs, expand their operations, or hire new employees. To help them, Al Franken will work to unfreeze the credit market.

* Expand the Small Business Administration's Loan Guaranty Program by $1 billion, and make another $4 billion available for direct loans to small businesses.

* Simplify the loan approval process and eliminate fees for lenders and borrowers, and expand the network of lenders to increase liquidity and help small businesses get better loan rates.

Create Jobs by Investing in Infrastructure
According to the Department of Transportation, each $1 billion invested in transportation development creates over 47,500 jobs and over $1.3 billion in worker income -- and up to $6 billion in additional gross domestic product. Right now, there are projects ready to be started -- and Minnesotans ready to do this important work.

* Create nearly 150,000 jobs by investing $2 billion to pay for deferred infrastructure repair projects, and another $1 billion for capital costs of facilities and equipment needed to improve multi-modal transportation options like the Midwest Regional Rail Initiative.

An Apollo Program to Create Green Jobs
Our energy crisis could be a huge opportunity for Minnesota. With an Apollo program for renewable energy and energy efficiency, we can end our dependence on foreign oil, make our nation more secure, improve our environment -- and create "green" jobs by making Minnesota the epicenter and the engine of a new energy economy.

* Invest in research and development into new and existing renewable energy technologies: wind, solar, biofuels, carbon sequestration, and more.

* Support U.S. House Transportation & Infrastructure Committee Chairman Jim Oberstar's work to make increased availability and use of rail -- light rail, commuter rail, inter-city passenger rail -- a reality.

* Work with entrepreneurs in Minnesota to support energy-efficient technologies, such as windows and other "green building" initiatives.

End Tax Breaks for Companies That Ship Jobs Overseas
We've lost over 600,000 jobs in America just this year. Now, Minnesota's unemployment rate is the highest it's been in 22 years -- with 170,000 people unable to find work. Part of the problem is that we've seen our tax code changed to encourage companies to ship American jobs overseas. Al Franken will work to reverse that.

* Strip companies of the nearly $40 billion in tax breaks they received to ship American jobs overseas, and use that money to promote domestic manufacturing.

* Support worker re-training programs that help those whose jobs have been lost.

GoodBiz113's take: Al Franken's proposed solutions are bold -- and very much needed in order to help get small businesses, and our nation, moving again. Kudos to Al Franken for having the vision and guts to conceive and articulate such a far-reaching strategy.

SOURCE: Al Franken for U.S. Senate, U.S. Census Bureau, U.S. Department of Transportation, U.S. Small Business Administration
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Kerry Urges President Bush to Help America’s Small Businesses

In a letter to President Bush yesterday, Sen. John Kerry [D-Mass.], chairman of the U.S. Senate Committee on Small Business and Entrepreneurship, pleaded for action to help save America’s entrepreneurs. With private banks shutting their doors to struggling business owners, many are turning to the Small Business Administration [SBA] for help, but they’re finding little assistance.

“Since last November, I’ve urged this Administration to prepare for the looming credit crunch,” said Kerry. “In letters and hearings, members of the Committee asked the SBA to step up to help small businesses. Despite the extraordinary financial crisis, the agency has been of little help to the very people they’re meant to serve.”

In September, Kerry introduced the Small Business Lending Market Stabilization Act of 2008 [S. 3596], which temporarily suspends fees for government loans, and Sen. Barack Obama [D-Ill.] has proposed a similar measure. Kerry has also held two hearings on the credit crisis and sent a previous letter to the SBA, urging them to work in a bipartisan manner to help solve the crisis. The SBA has ignored Kerry’s repeated warnings and calls for action.

Kerry’s letter comes as new data shows that lending for the SBA’s largest loan program – the 7[a] lending program, which is the nation’s largest source of long-term small business capital – has fallen by nearly 50 percent, compared with the same period last year. The SBA’s fees for these loan programs, along with banks' rising cost of funds, have made SBA loans out of reach for many entrepreneurs. Small-business owners are having an increasingly difficult time maintaining their businesses, as other sources of credit -- such as credit cards and home equity loans -- are drying up as well.

In addition to temporarily reducing fees, Kerry noted that the Administration could make disaster loans available nationwide, to serve as bridge loans until the rescue package takes effect. A similar approach was used after 9/11 and proved to be helpful.

Among further changes to help stabilize lending in the 7[a] program: allowing weighted average coupons to sell SBA loans on the secondary market; adopting a different rate index, to get the best rate for borrowers and to make the program compatible with other rate standards; and temporarily adjusting the rate cap for the loans, which will make the 7[a] program more efficient and cost-effective and restart the flow of capital to small businesses. Congress is pushing for such changes, but the SBA has the immediate authority to revise the program.

“The Administration should take immediate action to jump-start small-business lending,” said Kerry. “Waiting for a larger bailout of banks isn’t an option for many firms in desperate need of capital. My hope is that the President will see the urgency of this matter, to push the SBA to work with us to save hundreds of businesses and thousands of jobs.”

GoodBiz113's take: Last April, when President Bush helped kick off National Small Business Week, he told the audience of small-business owners and stakeholders, "The truth of the matter is, every day ought to be Small Business Day in America... Small businesses create over two-thirds of all new jobs in America. And if you want your economy to grow, and if you want the country to be hopeful, it seems like you ought to be celebrating the talent and the energy of our small business owners -- daily." Indeed, Mr. President. Now, how about heeding Sen. Kerry's call for bipartisan action to bolster our entrepreneurial endeavors with the financial resources needed today, so that we can continue to fuel America's economy for all -- Democrats, Republicans and Independents alike?

To read the letter that Sen. Kerry sent to President Bush, please click here.

SOURCES: GovTrack.us, Obama for America, Peace Corps Online [photo], U.S. Senate Committee on Small Business and Entrepreneurship, WashingtonWatch.com, WhiteHouse.gov
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Franken Campaign Releases Two New Ads Focusing on the Economy, Middle-Class Families and Small Businesses

Just one day after Minnesota's U.S. Senate candidate Al Franken unveiled his proposal to unfreeze credit and help small businesses create jobs, his campaign released two new television spots highlighting Franken's strong message on middle-class economic issues and supporting small businesses. The ads -- "Get to Work" and "Honest Differences" -- began airing this morning and will run statewide.

"The election comes down to a simple choice," said Andy Barr, communications director of the Al Franken for Senate campaign. "Norm Coleman chose Bush economics over Minnesota's middle class. And, now, Minnesotans have a chance to choose a new direction. In these ads, Al Franken lays out his plans to help the middle class: Cut taxes for middle-class families, create jobs, bring real oversight to Wall Street, and work to put our economy back on track."


SCRIPT: "Get To Work"
Al Franken: It's such a tough time. People's life savings are literally slipping away. We have got to change the disastrous policies of the Bush administration. I don't have all the answers – but here's where we start. Let's stop the billions of dollars in giveaways to big oil and drug companies. Bring real oversight to Wall Street. Work to make college affordable. And fix the economy to help the middle class. I'm Al Franken. I approve this message. Because it's time to get to work.


SCRIPT: "Honest Differences"
Announcer: Honest differences on the issues that matter to your family. The economy: Al Franken supports tax breaks for the middle class. A five thousand-dollar tax credit to help families pay for college. Stop giveaways to the special interests. Norm Coleman? He supported George Bush's economic plan all the way, voting for budgets that have left us ten trillion dollars in debt. It's Al Franken who will stand up for the middle class. For a change.

Al Franken: I'm Al Franken, and I approve this message.


GoodBiz113's take: During this election year, while far too many candidates have stooped to unleashing petty, baseless and mean-spirited attacks on their opponents, it's refreshing to see and hear specific, pragmatic and forthright proposals -- especially those that pertain directly to economy-propelling small businesses.

SOURCE: Al Franken for U.S. Senate
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Joined by Sen. Dorgan, Franken Proposes New Lifeline for Minnesota Small Businesses

Joined by Sen. Byron Dorgan [D - N.D.] and two local small-business owners, DFL U.S. Senate candidate Al Franken [D-Minn.] today offered a new proposal to unfreeze credit for Minnesota small businesses. His initiative is part of an economic recovery plan designed to create jobs and help Minnesota families in these tough economic times.

Franken unveiled the plan today at a news conference, joined by Dorgan and two local entrepreneurs:

* Mallard Teal is the owner of Payne Ave. Body Shop. A small-business loan enabled him to renovate his storefront and expand his business.

* Mary Leonard is the owner of Chocolat Celeste. She applies for a seasonal loan each year to expand production and hire additional employees for the busy Christmas season -- but this year, has been unable to acquire that capital.

"George Bush and Norm Coleman just don't get it: giveaways to the special interests and tax cuts for millionaire CEOs don't create jobs," Franken declared. "Small businesses create jobs. And, while Washington rushed to bail out huge corporations on Wall Street, we're going to lose jobs here in Minnesota if we don't do something to unfreeze credit for our small businesses. My proposal will ensure that folks like Mallard and Mary can continue to grow their operations and get our economy moving again."

Dorgan wholeheartedly agreed. "Al and I both opposed the bailout because it didn't protect taxpayers by adding in provisions to make sure this type of meltdown would not happen again," he said. "Al Franken is now proposing smart ideas to get this economy moving. We need him in the Senate to help fight for the middle class and stand up to the special interests."

Franken's proposal generates $4 billion for direct loans to small businesses through the Small Business Administration [SBA], and adds another $1 billion to the SBA's loan guaranty programs. It also simplifies the process of obtaining these loans; eliminates associated fees; and expands the network of lenders to increase liquidity and secure better loan rates for small businesses.

The initial $5 billion investment will be repaid by small businesses, resulting in no net cost to taxpayers over time. But Franken called for the $5 billion upfront cost to be paid for, in the short term, by taking it out of the $700 billion earmarked for the bailout package, or by eliminating unwarranted and excess stock-option deductions on executive compensation.

SOURCE: Al Franken for U.S. Senate
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Obama Proposes New Small-Business Rescue Plan

During his final American Jobs Tour stop, in the Appalachian community of Chillicothe, Ohio, Democratic presidential hopeful Sen. Barack Obama [D-Ill.] demonstrated steady leadership and introduced a new short-term proposal to address the credit crisis of struggling small businesses.

Sen. Obama’s goal is to put all tools on the table to ensure that necessary steps are taken to help Americans who are scrambling financially. Many small-business owners can’t even make their payroll or finance their holiday inventories. Obama’s proposal is one giant leap toward helping them during this time of financial crisis.

While the financial-market rescue plan [AKA bailout] is designed to unfreeze credit, which will indirectly benefit small businesses, Obama recognizes that small businesses need direct and immediate access to capital now. Yesterday, he called for a Small Business Rescue Plan to help small firms get the loans they need to conduct day-to-day operating expenses, undertake short-term investments, and meet payrolls.

The plan will use tools available through the Small Business Administration [SBA] to aggressively extend credit to struggling firms, while providing tax cuts for small businesses to encourage job creation. With America's 27 million small businesses responsible for more than two-thirds of new job creation, this plan is vital to stemming job losses and turning our economy around.

Barack Obama’s Small Business Rescue Plan includes:

* A Nationwide Emergency Lending Facility for Small Businesses: Just as our nation did in the wake of 9/11, when businesses all around the country were facing economic injury, Obama is calling for the SBA to directly lend to small businesses that cannot access other sources of capital. The facility will be run through the SBA's Disaster Loan Program, which is designed to offer affordable, fixed-rate loans to small firms to meet operating expenses, undertake needed short-term investments, or to refinance debt. Loans should be available with an expedited approval and disbursement process, so that firms can access the credit needed to meet their operating expenses immediately.

* Expanding SBA Guarantees to Encourage Private Lending to Small Businesses: Obama is calling for expanding the SBA’s key loan guarantee programs -- 7[a] and 504 -- by temporarily eliminating fees for borrowers and lenders, and increasing the guarantee rate on private loans. These steps will give lenders new incentives to lend and help unlock credit for small firms. It will send a clear signal that the government is standing with small businesses and ensuring sources of loans.

* Temporary Tax Incentives to Encourage Small Businesses to Invest in Jobs: Barack Obama will give small businesses additional incentives to make investments and start creating jobs again by providing temporary business tax incentives through 2009. February's Economic Stimulus Act of 2008 increased maximum Section 179 expenses to $250,000, but this expires in December 2008. This provision will encourage all firms to pursue investment in the coming months, but will benefit small firms in particular, who generally have smaller amounts of annual property purchases and so choose to expense the cost of their acquired property.

"If we're going to rebuild this economy from the bottom up, it has to start with our small businesses on Main Street -- not just the big banks on Wall Street," Obama declared at yesterday's American Jobs Tour rally stop in Ohio. "Small businesses employ half of the workers in the private sector in this country, and account for the majority of the job growth. But we also know that a credit crunch has dried up capital and put these jobs at risk. Shops can't finance their inventories, and small firms can't make payroll. It's harder to get an idea off the ground, or to provide health care for your employees. If we don't act, we'll be looking at scaled back operations, shuttered shops, and laid off workers.

"That's why we need a Small Business Rescue Plan, so that we're extending our hand to the shops and restaurants -- the start-ups and small firms that create jobs and make our economy grow. Main Street needs relief and you need it now. We won't grow government; we'll work within the Small Business Administration to keep folks afloat, while providing tax cuts to lift the tide. It's what we did after 9/11, and we were able to get low-cost loans out to tens of thousands of small businesses. That's one of the many steps we can, and should, take to help stop job losses and turn this economy around.

"It starts with a nationwide program to provide affordable, fixed-rate loans to small businesses across the country. We can run this through the SBA's Disaster Loan Program, which provides loans to small-business owners to get the help they need to maintain their inventory and meet their payroll. We'll also make it easier for private lenders to make small-business loans by expanding the SBA's Guaranty Loan Program. By temporarily eliminating fees for borrowers and lenders, we can unlock the credit that small firms need to move forward, pay their workers, and grow their business.

"Just as we make lending more available, we need to relieve the tax burden on small businesses to help create jobs. That's why I've proposed eliminating all capital-gains taxes on investments in small businesses and start-ups. And today, I'm proposing an additional temporary business tax incentive through next year to encourage new investments. Because it's time to protect the jobs we have and to create the jobs of tomorrow by unlocking the drive, and ingenuity, and innovation of the American people. That's what I'll do as president of the United States."

Barack Obama's comprehensive and far-reaching Small Business Rescue Plan marks yet another bold move on behalf of America's small businesses. He and running mate Sen. Joe Biden [D-Del.] have also proposed the following:

* Zero Capital-Gains Rate for Investment in Small Businesses: Barack Obama believes that we need to encourage investment in small businesses to help create jobs and turn our economy around. That’s why he will eliminate all capital-gains taxes on investments made in small and start-up businesses. Unlike John McCain, who wants to give $200 billion in new tax cuts to America’s largest and most profitable businesses, Obama wants to cut taxes for those small businesses that create jobs, but are struggling with restricted access to credit -- alongside skyrocketing health-care and energy costs.

* Tax Cuts for the Vast Majority of Small Businesses: Barack Obama believes that we need to reduce burdens on small-business owners -- many of whom are struggling to succeed in the midst of our economic crisis. Unlike John McCain, Obama has proposed direct tax cuts for small businesses -- including zero capital gains for investments in small businesses, plus a new 50 percent tax credit for businesses that offer health care to their employees on behalf of their employees, and to small businesses with no employees. Obama will provide a $1,000 Making Work Pay middle-class tax credit to 95 percent of workers and their families, which will help individuals with small-business income -- including the country’s more than 20 million self-employed individuals. And, because the Obama plan preserves existing tax rates for families making less than $250,000 a year, nearly 99 percent of small-business owners won’t see any tax increase under the Obama plan.

* New Small-Business Health Tax Credit: Barack Obama will exempt small businesses from any requirement to offer health insurance to their employees or contribute on their behalf. Instead, he will give small businesses new incentives to provide health care with a Small Business Health Tax Credit. The Obama Small Business Health Tax Credit will provide a refundable credit of up to 50 percent on premiums paid by small businesses.

* Investment of $15 Billion a Year in Renewable Sources of Energy: Barack Obama will create five million new, green jobs over the next decade -- jobs that pay well and can't be outsourced; jobs building solar panels and wind turbines and fuel-efficient cars; jobs that will help us end our dependence on oil from Middle East dictators.

* Investing in Our Nation's Infrastructure: Barack Obama will put two million more Americans to work rebuilding our crumbling roads, schools, and bridges -- because it is time to build an American infrastructure for the 21st century. He would also work with the building trades to expand apprenticeship programs, so that young workers can develop their skills.

GoodBiz113's take: Wall Street has gotten its $700 billion bailout. Unfortunately, it'll be awhile before small businesses on Main Street, as well as in America's rural farming areas, benefit from the supposed "trickle-down effect" of that massive cash infusion. Barack Obama and Joe Biden's innovative Small Business Rescue Plan is just what small businesses, entrepreneurs, start-ups, and working families and households need for short- and long-term endeavors, and deserves to be funded and implemented ASAP.

SOURCES: Internal Revenue Service, Obama for America, U.S. Small Business Administration
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