After months of political struggle, President Barack Obama has signed into law the Small Business Jobs Act, designed to provide financial relief to small businesses and self-employed workers with hopes of stimulating job creation.
The U.S. House approved the measured 237-187 on Sept. 23 after the U.S. Senate had voted 61-38 the week before to pass the act. The act creates a $30 billion lending fund for small businesses designed to ease the credit crunch that has stalled business development. The fund will direct taxpayer money to regional banks that voluntarily agree to lend to small businesses. In addition, the Jobs Act will deliver $12 billion in tax breaks to businesses, allowing companies to write off 50 percent of new equipment purchases and pushing to $500,000 the amount of new investment capital that small businesses can expense this year and next. In addition, the legislation allows self-employed workers to deduct health insurance costs.
Calling the bill “a boon for the entire small business community,” John Arensmeyer, CEO of Small Business Majority said it will help create jobs by addressing the lack of loans available to small businesses. In addition to the lending fund, the bill waives most fees associated with U.S. Small Business Administration loans.
While Democrats suggested the Act could add 500,000 jobs nationally, some critics are skeptical that the bill’s provisions will stimulate the increased demand for goods and services necessary to sustain economic growth.
Still, few argue with the notion that small businesses create most new jobs. As Kellogg professor Steven Rogers said at a Northwestern University event the evening before the bill was passed, “It’s time for us to do for our country. Our role is to create more entrepreneurs and help them grow.”