By Kevin Mooney — When you move past the legislative gamesmanship surrounding a bill that would provide for $30 billion in small business loans, it becomes evident that Republican lawmakers have offered economically sound amendments. However, with the mid-term elections just a few months away, The New York Times has no time for economics. The idea now is to undermine the Republican Party’s standing and to obfuscate proposals that are likely to connect with beleaguered taxpayers and struggling business owners.
“The measure, championed by Senator Mary L. Landrieu, Democrat of Louisiana, had the backing of some of the Republican Party’s most reliable business allies, including the United States Chamber of Commerce and the National Federation of Independent Business,” a Times report says. “Several Republican lawmakers also helped write it. But Republican leaders filibustered after fighting for days with Democrats over the number of amendments they would be able to offer.”
Politics almost always figures into the equation in the U.S. Senate where the minority has access to filibuster rules. However, The Times neglects to remind readers that the same Democratic leaders who now accuse the opposing side of mindless obstructionism have advanced legislation that creates uncertainly within the business community and precludes new hiring. The paybacks to union bosses in tandem with anti-energy initiatives and new healthcare regulations have all worked against a robust economic recovery.
It is worth noting that House Speaker Nancy Pelosi (D-Calif.) reiterated her commitment to passing the Employee Free Choice Act (EFCA) earlier this week, which includes card check and binding arbitration. Her comments raise concerns about what may transpire during the lame duck session of congress in December when defeated Democrats may go for broke.
Katie Packer, executive director of the Workforce Fairness Institute (WFI), still sees the Democratic leadership coming up short where the most coercive and costly measures are concerned. But business is still hedging its bets.
“Speaker Pelosi’s comments to the Communications Workers of America (CWA) is an example of political pandering at its height,” she said. “Pelosi understands there is insufficient support in Congress from both Republicans and Democrats to pass the job-killing Employee ‘Forced’ Choice Act. While Big Labor’s supporters in Congress can continue to engage in a game of happy talk, workers and small businesses will focus on getting America hiring again.”
Back in the U.S. Senate, Republicans sought amendments on a range of subjects that could directly impact economic activity. These include tax alleviation measures and nuclear loan guarantees. So far, these have all been blocked by somehow The Times does not see any cause to fix the obstructionist label on the Democratic leadership.
“The majority leader has graciously given us three amendments and what I’m saying is three amendments is not enough; he knows that,” Senate Minority Leader Mitch McConnell is quoted as saying. “We are not expecting to have an unlimited number of amendments, but three amendments will not suffice.”
A logical follow up to this report would probe into existing loan programs that have been set up ostensibly to foster economic growth. Since Republicans and Democrats have both settled on the Treasury Department as the government vessel responsible for administering new assistance, it may be worth examining how federal loan programs have worked in the past.
Veronique de Rugy, an economist with the Mercatus Center, has proposed eliminating the Small Business Administration (SBA) because in her view the programs have no appreciable impact on capital markets. Rugy’s analysis deserves weight and consideration in light of bipartisan impetus that exists for some form of business assistance.
“SBA loans go to businesses that conventional providers of financing have rejected,” she has written. “This means these loans go to the enterprises least likely to create stable employment, improve technology, or enhance national productivity. Default rates on SBA loans are roughly 17% as opposed to 1.5% for FDIC-insured bank loans and 4.3% for credit card loans. It is time to abolish the SBA loan programs.”
The overarching purpose here in the New York Times is to needle Republicans for a blocking a seemingly benign legislative act that will supposedly bolster business; at least according to the headline. But members of both parties should be asked how the Treasury Department will ensure that $30 billion that put into circulation are allocated at an appropriate to private outfits that are well positioned to fulfill their obligations and offer stable employment opportunities.
