Small Business Job Creation -- Rhetoric vs. Reality
It’s no mystery that, although coming down substantially since the height of the crisis, unemployment in the United States is still too high. Politicians often react to this by claiming that we need to do legislation that benefits small businesses who are “the real job creators of America”. It’s nice of them to say that but if you look at their actions rather than their words you see quite the different story. Indeed, there could be hundreds of thousands of more jobs in this country, right now, had it not been for the actions and inactions of Congress. Just look at the small business section of the Export-Import Bank of the United States. For those of you who don’t know, the Export-Import Bank of the United States (Ex-Im Bank) is the official export credit agency of the United States. Ex-Im Bank's mission is to assist in financing the export of U.S. goods and services to international markets. The Ex-Im Bank’s small business section focuses on domestic businesses that create goods and services to be exported all around the world. The Ex-Im Bank appears to be working too as since 2008 it has earned taxpayers almost $1.6 billion over operations costs. Further, of the $32.7 billion the Ex-Im Bank authorized for businesses last year, $6 billion of that went to supporting small business export sales.
So what’s the problem? A lack of funding of course. The Ex-Im Bank as you have seen has been very successful but it was nearing its $100 billion spending cap at the end of last year. As a result, the President requested that its cap be increased by 40 percent to help boost small businesses and “double the amount of exports”. Eric Cantor, at that time however, made it clear that $113 billion was as high as his party was willing to go regardless of benefits of the cause. The $140 billion cap raise was also supported by the Chamber of Commerce but still failed to occur. There is much more to this story however and The Huffington Post continues, “Congress and the President have not been entirely at loggerheads. Republicans in Congress have stated that their chief priority is to keep Obama from getting a second term as President. Therefore, if a bill contains a proposal to postpone spending until after 2012, they're free to be all for it. This is just what happened with HR 2072 - Export-Import Bank Reauthorization Act of 2012. In a show of huge bipartisan success, Democrats and a large number of Republicans in Congress compromised and voted to pass this bill this summer. ExIm is allowed to spend $120 billion in 2012, $130 billion in 2013, and $140 billion in 2014. The delay in providing the full $140 billion to ExIm until 2014 has impacted Obama's re-election chances for 2012. It certainly isn't hurting Boeing's revenue and earnings right now, but Cantor's control of the majority-party votes in the House ensures there will be far fewer new jobs for U.S. small-business this year than by 2014…”
Source - Huffington Post