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August 11 Obama's Small Biz Report CardI'm BACK!! What a month it has been! Let's hope I don't find myself in a similar position anytime soon...
Today's featured article comes from CNN SmallBusiness and it focuses on the steps the President Obama has undertaken to assist the small business community. Though the author does not provide letter grades (A, B, C, etc.), she does a pretty good job of comparing and contrasting the steps the President has taken versus the promises he made. In so doing, the author focuses on the issues that are of deepest concern to small business owners. These include: (i) the credit crunch; (ii) health care; (iii) taxes; and (iv) job loss.
It is clear that this economy is still in a deep recession. However, the President did campaign on "Change" and since inauguration, he has taken some steps to alleviate some of the problems small businesses are facing. Now that we are six months into his presidency, we can now judge the effectiveness of the President's policies.
Credit Crunch: the President promised a bailout of "Main Street" and though the stimulus bill provided incentives for banks to issue loans to small businesses (See February 18th post), banks are still wary of participating in these government programs because, despite the government guarantee, they "still see small business loans as a huge risk."
Health Care: The President promised to diminish health care costs by providing a 50% tax credit on health care premiums paid by small businesses. However, healthcare is still being hotly debated in Congress with multiple bills in the house and the senate. As such we cannot make a determination as to whether or not the President is following through on his promise until we have a clearer picture of the final health care bill.
Taxes: the President promised not to raise taxes on small businesses that make under $250,000 per year. So far, it seems that he is following through on his promise. The stimulus bill provided tax breaks (by allowing businesses to carryback losses for five years). The President also froze the 2009 estate tax at 45%. However, unless Congress intervenes, the Bush estate tax will expire in 2010 and will revert to 55% in 2011.
Job Losses: The President planned to extend credit and reduce taxes to small businesses in an attempt to encourage job creation. However, given the banks' reticence to extend loans, small businesses do not have the access to credit they need for growth. As such, there is very little job creation going on at the present time. On the brighter side, reports do show a slow down in the rate of job loss - partially due to companies that benefitted from government contracts issued under the stimulus plan.
So yes, the economic outlook is still very grim. And, many days it seems as if things are not changing - but they are. These first steps are miniscule but at least they show that we are finally moving in the right direction.
Small biz promises: Where Obama standsPresident Obama has pledged to help Main Street where it is hurting the most. Here's a look at where he's followed through -- and where he hasn't.Aug 07 2009 By Emily Maltby TrackbacksThe trackback URL for this entry is: http://smallbizcoop.spaces.live.com/blog/cns!CFF20A3C12635897!264.trak Weblogs that reference this entry
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