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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.
Scott Elliott is an editorial writer and columnist for the Dayton Daily News opinion pages. He writes about education, city and suburban issues, politics, business, workforce and consumer issues.Home > Blogs > A Matter of Opinion > Archives > 2010 > August > 07 > Entry
Editorial: Senate bickers while businesses lose
Partisan bickering in the U.S. Senate about a bill designed to offer help to small business is beyond frustrating at a time when companies that could benefit are living on the edge.
The $30 billion bill is modest in size and mostly offers tax cuts and the creation of a new fund that would allow small banks to extend more loans to small companies stifled by a credit freeze.
The bill isn’t the solution to all the problems facing small business, but it is a useful tool that can help them invest and hire. It has wide support on both sides of the aisle, but Senate leaders are about to shelve the whole thing over inane disputes such as how many amendments are allowed.
Democrats say that many of the bill’s existing provisions were actually authored by Republicans, who tend to favor tax cuts and programs that support business. But Republicans object to some of the bill’s spending.
On that, though, the Congressional Budget Office says the bill would not add to the deficit because of revenue generated by closing tax loopholes for foreign companies. Republicans are blocking it by threatening a filibuster. Sen. George Voinovich, R-Ohio, supported the spending as recently as last month, but so far is honoring the call for a filibuster. Ohio Democratic Sen. Sherrod Brown backs the program.
It’s time for both sides to come together and move the bill to a vote.
Nationally, the lack of access to credit for small business is a real problem. When the economy rebounds, small business expansion will be an important part of the equation.
But many small businesses are stymied by lending standards that have gotten stricter. They can’t get loans, forcing some to turn to so-called “hard money” lenders — high-interest deals with wealthy individuals or investment groups that critics compare to payday lenders.
When small businesses want to expand, but are shut out of credit or must spend their cash instead on huge interest payments, that prevents jobs from being created.
Sebastian Melluzzo, president of Citizens National Bank of Southwestern Ohio, said he’s not sure how much the loan fund would help in this area because demand for loans is way down. Companies hurt by the downturn aren’t looking to expand, he said, until they see more signs suggesting sales are coming back.
But Steve Budd, president of the CityWide Development Corp., the city of Dayton’s development arm, said he has seen good businesses with solid track records get turned down for loans.
“These are top-notch owners who have done a great job, and the bank will tell you so,” he said. “But banks are afraid to lend money.”
Banks are under pressure from regulators, he said, who consider what formerly were rated good loans as too risky. Often borrowers’ assets — property and portfolios — aren’t worth as much as they once were.
“There’s not as much demand for new credit as there has been at other times,” Mr. Budd said, “but the needs that are out there are not being met.”
The Senate isn’t helping the tentative recovery.
Permalink | Comments (4) | Post your comment | Categories: Economy, Editorials, National Politics, Scott Elliott
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By joe_mamma
August 10, 2010 8:16 AM | Link to this
Ummmm…since when did small business go to a bank to get a line of credit to hire people? They generally don’t. They are also even less likely to do so when there is a ton of uncertainty in the economy. Small businesses generally hire people when they are growing revenue and profits. Why would a bank give credit to a small business that has to take a loan to hire additional people? That’s the type of reckless lending practices that got us into this mess. That’s a HUGE RISK if the small business hasn’t established a sufficient revenue and profit stream. Sorry Scott…but this is just another government intrusion that isn’t needed and likely comes with strings attached. Here is some enlightening reading for you big government types. www.wsj.com/article/NAWSJPUB:SB10001424052748704017904575409733776372738.html
By Quentin
August 10, 2010 8:30 AM | Link to this
I can’t figure out why BOTH sides kept bailing out big companies and all these banks. While those groups got a bailout, my small business has had to use credit cards to finance things. Then with the changes in the laws on them, our interest rate TRIPLED and payments more than doubled. Money the could be used for better things like equipment maintnance, advertising to try and grow and paying off the debts is now locked up in this instead. So these big companies and banks that got a bunch of money we have to pay in taxes are pushing to kill small companies like mine with our lawmakers helping to do it with new regulations and taxes on us.
By Stephen Lahanas
August 10, 2010 10:07 AM | Link to this
Small business is now driving this economy. Small businesses aren’t exporting jobs, they are supporting their communities. Bailing out the entities which caused the recession while ignoring our true economic engine is the single greatest mistake associated with the recovery efforts - which is why they aren’t working. A Recovery without jobs is not a recovery.
By ggg
August 15, 2010 8:17 AM | Link to this
Our company just hired 6 new people, they came from a company of 91 that just closed down in Montgomery county. We have 30 employees, and 2 of them with a college education. The congress just gave 30 billion to save teachers jobs. How many more companies are we going to put out of business to get a job in an economy that is no longer suited for jobs with degrees.