Completely overshadowed by yesterday's vote on Iraq has been a huge victory for small business owners on the House floor. By a vote of
380-45, the House approved
HR 1332, which strengthens the Small Business Administration's loan programs and targets outreach toward veterans and rural areas. In another 12 to Garrett vote, Representative Scott Garrett was the only Representative from New Jersey to vote against the Bill.
This is the second time Garrett has voted directly against small business owners in the last three months. The first time was Garrett standing with largely the same
45 Representatives who opposed 1332 to oppose
HR 976, the "Small Business Tax Relief Act of 2007". Garrett believed it better to provide no relief over 10 years because, according to Garrett's
floor speech, the relief wasn't permanent. I'm sure the US Chamber of Commerce weighed that thought for a nanosecond before
urging Congress to support the measure, and deciding to include it in their scorecard.
Unfortunately, at this point any speech Garrett may have given to explain his reasons for not supporting increased access to funding for those who provide
50% of the GDP, as well as
60-80% of the new jobs annually for the last decade, hasn't found it's way into the Congressional Record. My guess is Garrett's philosophy on this Bill falls into this category, as restated in a lengthy and
must read article published in Inc. Magazine this month about the SBA.
Veronique de Rugy of the American Enterprise Institute wrote in a paper last year. "Bank loans represent only one of many ways to acquire credit."
The article went on to explain the real world implications of this sentiment.
At nearly 12 percent interest, the Castillos' loan struck me as expensive. But it turned out they had financed two other used trucks from local dealers at far more onerous terms: 19 percent interest. Blanca also has a personal loan to repair the trucks--at 29 percent interest. She marvels at the difference the SBA has made. "For $30,000, we're paying $260 interest a month," she said, "and we have a personal loan for only $7,000, and I am paying $190 interest a month!"
The Castillos' panoply of loans and interest rates certainly brings De Rugy's "many ways to acquire credit" into focus. Her credit market is an abstraction, a upernormal (sic) force that is always fair, always rational. In Virginia, at least, the credit market is atomized; its decisions are subject to the biases and whims that rule the lives of real men and women, to ambitions and institutional prerogatives that set the agenda at the office.
That's as real world vs. rhetoric as I've seen in this debate. The article also pointed out how the Federal Reserve in Cleveland found SBA loans to be a good investment of tax dollars.
For instance, assuming the SBA meets its goal of creating one job with every $50,000 of 504 lending--and the SBA says many Certified Development Companies exceed it--the cost per job in 2006 was a mere $188; the Treasury would earn that back many times in a single year's tax bill.
The return on investment for taxpayers probably accounts for why 77% of Republicans supported this measure. It points to the difference between fiscal conservatives, seeking the most bang for the taxpayer's buck, and the anti-government folks like Representative Garrett. At the end of the day small business owners, and those who one day dream of working for yourself, need to realize that when Garrett's in Washington he will vote his personal philosophy over your checkbook every time.
