This morning, President Barack Obama met with several small-business owners and executives to discuss the economic challenges they face. Among his Oval Office visitors: Prachee J. Devadas, president & CEO, Synergy Enterprises Inc.; Anand A. Devadas, vice president of corporate operations, Synergy Enterprises Inc.; Bobby Pancake and Steve Wheat, partners of High 5 LLC, a franchisee of Buffalo Wild Wings; and Terry Haney, general manager of Buffalo Wild Wings Grill & Bar in Dover, Del.Afterward, President Obama and his guests [pictured above] went out to the Rose Garden, where he called on Congress to pass legislation to provide new tax credits and lending incentives that will help small businesses grow and create new jobs. Following, is an excerpt from his speech:
"From the middle of 2007 to the end of 2008, small businesses lost 2.4 million jobs," Obama noted. "And because banks shrunk from lending in the midst of this financial crisis, it’s been particularly difficult for small-business owners to take out loans to open up shop or expand. It’s been hard to finance inventories and payroll and new equipment.
"Now, I’ve said before and I’ll repeat, government can’t guarantee success for these companies. But it can knock down barriers that prevent owners from getting loans. Government can’t create private-sector jobs. But it can create the conditions for small businesses like these to grow and to hire more people. That’s what’s guided much of our economic agenda.
"So let me be specific. Last year, we enacted seven tax cuts for America’s small business -- seven tax cuts. So far, the Recovery Act has supported over 68,000 loans to small businesses, which translates into nearly $29 billion in new lending.
"More than 1,300 banks and credit unions that had not made SBA loans since before the financial crisis are now lending again. More than $8 billion in federal Recovery Act contracts are now going to small businesses. In fact, Prachee has been able to add 20 part-time and full-time workers because of the Recovery Act.
"In addition, as a result of a bill I signed into law a few months ago, businesses are now eligible for tax cuts when they hire -- when they hire unemployed workers, they're eligible for tax cuts. Companies are also able to write off more of their investments in new equipment.
"And, as part of the health reform package, 4 million small-business owners recently received a postcard in their mailboxes from the IRS, and it was actually good news: It told them that they could be eligible for a health-care tax credit this year that could be worth perhaps tens of thousands of dollars to these small businesses.
"So these and other steps are making a difference. Little more than a year ago, the economy was in freefall. Today, it’s growing again. Little more than a year ago, the economy was losing an average of 750,000 jobs per month. It’s now been adding jobs for five months in a row.
"But even though we are in the process of digging ourselves out of this recession, we’re still in a pretty deep hole. Millions of our family members, our friends, our neighbors are still looking for work -- they're still faced with the prospects of long-term unemployment. Credit is still less available than it should be, particularly to small businesses.
"As small-business owners like Prachee and Bobby and Steve will tell you, we may be recovering but we’re not yet recovered. We have to keep moving forward.
"And that’s why I’m urging Congress to swiftly approve a set of tax breaks and lending incentives to spur hiring and growth at small businesses. The legislation that's being debated right now would eliminate capital-gains taxes for small investment -- for investments in small firms, which will help move capital to these companies across America. It will provide tax relief to small start-ups to encourage folks to open up businesses, as well.
"To foster more credit, the package would create the small-business lending fund I proposed in my State of the Union address, to help underwrite loans through community banks. And we’d create a new state small-business credit initiative, because states facing budget shortfalls are scaling back lending to small firms and manufacturers; that's working against our recovery. I’m also urging Congress to expand and extend successful SBA programs -- by increasing loan limits, for example -- something that could benefit people like Bobby and Steve.
"In fact, since the start of my administration, we’ve been hearing from small businesses that want to retain and hire more employees, but they need additional credit. And we’ve been hearing from small community banks that want to lend more to small businesses, but they need additional capital. So this bill helps fulfill both needs. And to help us create jobs without adding to our deficit, we’re making the tough choices to pay for these proposals.
"So I’m hopeful that the House will pass these measures next week, and that the Senate will follow as soon as possible -- with both support from Democrats and Republicans. And I’m eager to sign this tax relief and additional lending into law. That’s how we can continue to move our economy forward -- to continue on the path from recession to recovery, but also, ultimately, to prosperity."
To view a video of today's Rose Garden event, including President Obama's entire speech, go to: http://bit.ly/SmallBizBarriers.
SOURCES: HealthReform.gov, IRS.gov, U.S. Small Business Administration, The White House [photo]
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