Rep. Velázquez comments on small business tax provisions in the American Recovery and Reinvestment Act
Rep. Nydia M. Velázquez (D-NY), Chairwoman of the House Small Business Committee, delivered the following opening statement today before the House Committee on Small Business hearing Economic Recovery: Tax Stimulus Items that Benefitted Small Businesses with a Look Ahead: "This past February, Congress approved landmark legislation to revive our struggling economy. In passing the American Recovery and Reinvestment Act (ARRA), Congress laid the groundwork for long-term, sustainable growth. That bill contained several small business provisions, and I'm pleased to say many of them are already working for our entrepreneurs.
"Six months after the Recovery Act was signed into law, the clouds are starting to clear. To begin, loans from the SBA are up dramatically. As of June, the agency had supported more than $6 billion in lending. Just as importantly, small business credit markets are coming back to life. Loan volumes in the secondary market jumped from under $100 million in December to $360 million last month. So things are looking up. Still, small firms continue to face challenges in accessing capital, and it would be wrong to say we are out of the woods just yet.
"While we are still only one quarter of the way into a sweeping two year plan, this is a good time to stop and check our bearings.
"Today, we are going to evaluate the progress made thus far. Witnesses and committee Members will discuss the Recovery Act's small business tax provisions. In doing so, we can hopefully pinpoint where we've made headway, and identify areas in which there are still strides to be made.
"Regardless of the economic climate, tax policy is a critical tool for growth. So in drafting the Recovery Act, it only made sense to include relief for entrepreneurs. Already, provisions for increased expensing limits and bonus depreciation are helping small firms expand. They are also creating new avenues for growth.
"Some of the most important provisions in the Recovery Act are those that invest in new industries. Small firms are already leading the Green Revolution. Increases in clean energy tax credits are helping that process along, and generating tremendous opportunity for small firms. In a recent survey by the Air Conditioning Contractors of America, 75% of respondents said they had seen improved sales. Because the efficiency sector is dominated by entrepreneurs, good news for green businesses is good news for small businesses.
"Clearly, we've come a long way since February. The Recovery Act is not just growing new industries like renewable energy. It is also reinvesting in old ones, like construction and manufacturing. In May, orders for manufactured goods--the kind that the Recovery Act lets firms depreciate--shot up $2.8 billion. Meanwhile, entrepreneurs in the construction business stand to win billions of dollars in infrastructure contracts. That is thanks largely to the Recovery Act's Build America bonds. As of early June, those tax-exempt bonds had helped finance $12 billion in new projects.
"I think we can all agree that these are promising bright spots. But signs of recovery should not be cause for complacency. In seeing the recovery process through, we will need to be patient. And we will need to be sure all options are on the table. In terms of successful provisions, it may make sense to consider increases or extensions. At the same time, there are a number of suggested measures that hold very real potential, and are worth a second look.
"In moving forward, it is important to remember one thing--these are exceptional times. They cannot be met with apprehension. They cannot be addressed with inaction. We need to confront them head on, with innovative solutions. That's why it is so important that our policies invest in small firms. They are the ones offering fresh solutions, and they are the ones leading the way back to prosperity."
For more information, visit www.house.gov/velazquez.
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