Lending a Hand

When President Barack Obama turned his attention to America's small businesses recently in a policy speech at the Brookings Institution, he fixed his gaze in the right direction. As the president noted, over the past 15 years small business have created 65 percent of all new jobs. And so it will be again as the nation crawls out from under the gloom of the recession.

Obama is likely motivated both by politics and a genuine desire to get people working. Although unemployment moderated in November, more than 10 percent of Americans remain out of work. But when those who have given up looking for a job are counted, the rate is far higher, and few economists expect unemployment to drop much before next year's mid-term elections, which will put more pressure on the economy — and on Obama.

The president proposes eliminating fees for Small Business Administration loan programs through 2010 as well as increased loan guarantees of up to 90 percent. Such loans are the lifeblood for many small companies.

It makes sense to extend these provisions at least through the end of next year, if not longer.

Obama will ask the Department of the Treasury to increase loans to small businesses using leftover money from the TARP — or Troubled Asset Relief Program — fund.

The president wants to extend tax rules that allow a small business to immediately deduct certain assets that otherwise would have to be depreciated over a number of years. He would extend so-called "bonus depreciation," which allows companies a special 50 percent write-down on many kinds of equipment and other property. Both measures encourage companies to invest in new equipment, which can help make them more productive. Studies have found that such relaxed expensing rules fuel economic growth.

Obama also proposes to eliminate capital gains taxes for small business investment for one year and is urging Congress to adopt a tax credit for companies that hire. The credit should be broadly available, but could also work if targeted — say, for recent college graduates.

Congress should move quickly to give small businesses a hand.

REPRINTED FROM THE MILWAUKEE JOURNAL SENTINEL.

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