Late yesterday, the Senate spiked President Barack Obama's American Jobs Act. OK, that part was totally expected.
Without getting off-track wondering why the President squandered political capital by putting up a bill that seemed clearly doomed, let's cut right to the topic that matters: What may be salvaged out of this bill, and what would small business owners like to see actually pass?
President Obama has already said the next step is to break the bill up into parts and try to get various provisions approved by Congress. So now, like the zombie-movie posters say, it's a question of who will survive and what will be left of them.
Here's a rundown on the bill's provisions aimed at small business:
- The payroll tax cut. This one offers real, immediate relief to business owners with employees. No help for solopreneurs there. Maybe this one was written too broadly --- it covers the first $5 million in payroll, namely 98 percent of all American businesses. Maybe it would be more palatable (and less costly) if it were scaled back to the first $1 million of payroll?
- Zero payroll tax for new workers and pay raises. This hits directly at stimulating hiring. Isn't that what we all want? But maybe it's an empty promise if there aren't any customers or income growth stimulating owners to hire anyway.
- Extension of 100 percent expensing of purchases. Estimated to keep $85 billion in the hands of business owners. Could be a real boon to the auto and industrial-equipment industries.
- SBA expansion, red tape reduction. The new initiative would have allowed the Small Business Administration to continue to guarantee the larger loan limits that were authorized under last year’s small-business jobs bill. It would have also cut some of the regulatory red tape small businesses face.
The big BUT:
Can taxing the rich fly? The whole bill depended on a new income tax for millionaires of 5.6 percent starting in 2013. Proposed by Senate Democrats, the surtax received only mixed support. But without a means to pay for the other cuts, the entire idea of new federal job stimulus may be dead anyway.
Maybe the small-business initiatives could be spun off into their own bill. Other provisions currently in the Jobs bill include: added financial support for states that could help prevent 280,000 teacher layoffs, infrastructure-repair programs, public-school modernization and extending unemployment.
There's so much going on in the bill overall that separating out the small business side might boost the bill's chances for passing.
Or, maybe a whole new proposal needs to be hammered out. The President recently received a plethora of feedback from entrepreneurs. Maybe his team could read through them and get some new ideas.
What do you think could save the Jobs bill? Tell us in the comments.