Durbin: Job act will give small businesses 'much-needed lifeline'
U.S. Sen. Dick Durbin on Sunday discussed recently passed legislation he believes will provide a “much-needed lifeline” for small businesses.
The Small Business Job Act, which was signed into law last week, provides $30 billion for community banks to borrow cheaply in order to lend money to small businesses. The money is only for the smallest banks, those with $10 billion or less in assets.
“The road to recovery in this recession is through the small businesses of Illinois and America,” the Springfield Democrat said, speaking outside the new building for MBC Collision Center Inc., 2799 Colt Road.
“So many of those businesses are ready to go. They want to expand, they want to add employees. They believe their future is bright, but they need credit to make it happen.”
The legislation also gives small businesses $12 billion in tax relief, including an extension of American Recovery and Reinvestment Act provisions that allow them to write off new purchases and startup expenses more quickly, Durbin said.
Small businesses historically have led job creation during periods of economic recovery, he noted, and during the past 15 years, have created two-thirds of all jobs.
Between 2003 and 2006, small businesses in Illinois created a net increase of more than 141,000 jobs, which was a little more than 90 percent of the net jobs created during that time, Durbin said.
But only about half of all small businesses that tried to borrow money last year got all or most of what they needed, he said.
“We look for the big employers to arrive in town and make a big difference, and we overlook a lot of small and medium-sized businesses which, by expanding a few employees here and there, make a dramatic difference in the work force,” Durbin said.
The senator also discussed the much-maligned Troubled Asset Relief Program (TARP), which was signed into law by then-President George W. Bush in October 2008 to buy assets and equity from financial institutions. The hope was to strengthen the economy by addressing the subprime mortgage crisis.
“We have had a dramatic payback in TARP,” Durbin said. “Originally, the theory was we were going to send this money out to the biggest banks in America and never see it again. The money is being repaid. There is some that is slower than others — an example, General Motors, is back on its feet, showing profitability … but it’s going to be a few years before they pay it back.”
Most of the entities that were helped, he said, are paying the funds back with interest.
As for continued high unemployment, Durbin said, “It isn’t like we’re going to see a dramatic change overnight.”
“It took a long time to reach this point,” he said. “We’ve lost at least 8 million Americans (to unemployment) and maybe another 6 million stopped looking (for jobs). Over the span of a couple or three years, we’ve seen a steady decline in the work force. Now we’re supposed to build it up, but it’s very slow-working.”