Washington, DC – U.S. Representative Judy Biggert (R-IL-13) today moved to amend a new taxpayer-funded bank lending plan sponsored by House Financial Services Committee Chairman Barney Frank by adding provisions calling for Congress to first boost small business capital through tax relief. 

             “If a thaw in small business lending could be achieved simply by sending taxpayers’ dollars to banks, then the first bailout would have done the trick,” said Biggert, Ranking Member of the Financial Services Subcommittee on Oversight and Investigations.  “The problem is more complex than that, and Congress needs to get out of the bailout mentality and start listening to the needs of small business owners struggling to stay afloat in this economy.  This amendment would create a window of growth for small businesses and leave tax dollars in the hands of those that can do the most good for our economy.  Without it, the underlying bill simply throws good money after bad, with little hope of a solution.”

            Biggert offered her amendment during House Financial Services Committee consideration of H.R. 5297, a bill that would allow the Treasury Secretary to inject up to $30 billion into banks on the promise of increased small business lending.  Biggert’s amendment would call on Congress to extend four expiring or recently expired tax provisions most often cited by the small business community as effective investment incentives.  It also would provide certainty against two other proposed tax increases -- a doubling of the tax on carried interest and a financial transaction tax that would obstruct the flow of investment capital into small businesses. 

            “When I talk with small business owners back home, they tell me how unpredictable government regulation and an array of impending tax increases have made it impossible to plan for their financial future, access capital for growth, or hire new workers,” said Biggert.  “My amendment will help address both issues and calls for an immediate infusion of capital into small businesses by letting them invest their own earnings, rather than simply cycling taxpayer funds through an unproven, new government bank loan program.” 

           Under Biggert’s amendment, the original bank lending plan would remain unchanged, but would not take effect until Congress extends or maintains each of the six required tax policies through 2012.  Biggert pointed out that, through tax relief, Congress could more effectively restore certainly in the marketplace, help small businesses raise collateral to qualify for loans, and immediately free up capital for job creation.

           The four expiring tax policies that the amendment aims to extend are the 5-year net operating loss carryback provisions that expired in December, the 15-year recovery period for business property improvements, accelerated depreciation for equipment upgrades, and increased Section 179 expensing limits.  The amendment was rejected by the Committee on a party line vote of 23 to 42.  However, Biggert says she will continue to push for its adoption as the bill progresses to the House floor.

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