President Barack Obama returned from vacation and quickly lambasted Republicans for holding his so-called small business lending bill “hostage.” The US Report took a look at HR 5297, the Small Business Jobs and Credit Act of 2010. Many pundits are railing against the GOP for holding up a small business lending and jobs bill. Not a single newspaper or online publisher I scanned mentions the bill number or the bill specifics—the reader is basically offered political fact. The bill is a boondoggle in the truest sense of the word—a government effort with little practical value enacted to reward cronies.
Truth is, this bill—and I am not sure whether this is the only bill or whether there are more because not even the president cites the bill by number or specific title—is another flawed piece of legislation from a Congress that simply does not have skills to put together a bill that would really help small businesses.
For one thing, this is not a mom-and-pop business bill. HR 5297 creates a Small Business Lending Fund Program to direct the Secretary of the Treasury to make capital investments in eligible institutions.
Theoretically those institutions will help small businesses obtain money and prosper while creating new jobs.
Fact is there's a mountain of paperwork forthcoming for any small participating business. I doubt mom and pops could afford to fulfill the obligations of that paperwork without spending a small fortune.
The bill defines the term `small business lending'—“small business lending, as defined by and reported in an eligible institution's quarterly call report, where each loan comprising such lending is made to a small business and is one of the following types:(i) Commercial and industrial loans;(ii) Owner-occupied nonfarm, nonresidential real estate loans;(iii) Loans to finance agricultural production and other loans to farmers;(iv) Loans secured by farmland;(v) Nonowner-occupied commercial real estate loans;(vi) CONSTRUCTION, LAND DEVELOPMENT, AND OTHER LAND LOANS;(I) IN GENERAL- Loans secured by real estate…”
HR 5297 also gives a nod to affirmative action, citing the interests of women and minority-owned businesses as well as veterans. The legislation mandates a study of the results from those groups. Institutions must provide a plan—that is reasonable. But the plan must “address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach…” I doubt ‘linquistically and culturally’ applies to English, but I could be wrong.
There’s also a section listing targeted industries: agricultural technology, energy technology, environmental technology, life science, information technology, digital media, clean technology, defense technology and photonics technology. Might we assume digital media is aimed at struggling newspapers? Who knows?
Rep. Barney Frank (D-Mass) sponsored HR 5297. Considering Frank's record (and that of his fellow Democrats) with government sponsored enterprises like Fannie Mae, Obama might want to sit down and read the bill he’s promoting. Like Obamacare and Cap and Trade, HR 5297 is a flawed bill that will do nothing more than put the taxpayer on a future hook bigger than the current one. Republicans apparently have (finally) learned to spot a boondoggle when they see one, and that is perhaps the best development I can point to in this matter.
Sidenote to all members of Congress and media: Read the bills you promote.
Sidenote to media: Cite the bill by number and title if you promote it. And you might read it too.
(Commentary by Kay B. Day/Aug. 31, 2010)