October 22nd, 2009
02:10 PM ET
13 years ago

Stimulus debate heats up as Pelosi pushes aid for small business

WASHINGTON (CNN) - House Speaker Nancy Pelosi said Thursday that Congress is set to consider a measure increasing the amount of money the federal government can loan to small businesses.

The House of Representatives will debate a bill next week increasing the ceiling on Small Business Administration loans from $2 million to $5 million. The bill, backed by President Barack Obama, also would increase the maximum size of SBA-backed microloans from $35,000 to $50,000.

On Wednesday, Obama unveiled a separate measure designed to stimulate small business growth in part by making capital cheaper for community banks.

"Small business is the engine of job creation and capital creation in our country," Pelosi told reporters Thursday. "The issue of jobs is (always) important to us."

The moves highlight a growing debate in the White House and on Capitol Hill over whether to push for a second economic stimulus package. The unemployment rate has continued to climb in recent months, and is now near 10 percent.

Most top Democrats refuse to refer to any new measure as a "stimulus," partly out of concern that it will raise questions about the effectiveness of the $787 billion recovery package enacted in February.

Republicans have slammed February's package as a failure.

"We do not have plans for an additional stimulus package," Pelosi said Wednesday. "But we do have plans to stimulate the economy in the ... work that we are doing here."

Yesterday, House Democrats convened a forum of economists to debate the state of the economy, with a specific focus on job creation. Mark Zandi, chief economist of Moody's Economy.com, warned that the "possibility of the economy slipping back into recession next year (is) uncomfortably high."

The measure is only one of an array of new measures being floated by White House and congressional leaders.

Among other things, Congress is currently working on legislation to extend unemployment benefits. An estimated 1.3 million jobless workers will have run out of their benefits by the end of the year, according to the National Employment Law Project.

The House has already approved an extension. The Senate has amended the bill, but not yet voted on it. Both parties say they want to extend benefits but disagree over how to pay for it and how to handle amendments to the bill.

In the Senate proposal, unemployment benefits would be extended by up to 14 weeks in every state and then another six weeks on top of that in states where the unemployment rate tops 8.5 percent. Senate Democrats say the measure, projected to cost $2.4 billion, would be paid for by extending an add-on tax for employers under the Federal Unemployment Tax Act.

The administration is also backing an extension of the federal subsidy now offered to unemployed workers who opt to continue their health insurance coverage from their former employers under what is known as COBRA.

Under the original provision passed in February's economic recovery act, the government agreed to pick up 65 percent of the cost of COBRA premiums for up to nine months for workers laid off between September 1, 2008, and December 31, 2009.

Obama has also proposed sending a $250 economic relief payment to seniors, veterans and the disabled to compensate for the fact that there will be no cost-of-living adjustment made to Social Security benefits in 2010 due to a lack of inflation.

The $13 billion measure would be identical to a $250 emergency payment sent out earlier this year.

Democrats also are looking at a possible extension of the $8,000 tax credit for first-time home buyers. The credit - aimed primarily at individuals making under $75,000 or couples earning less than $150,000 - is set to expire November 30.

–CNN's Dana Bash, Catherine Clifford, and Jeanne Sahadi contributed to this report.

Filed under: economic stimulus • Nancy Pelosi
soundoff (31 Responses)
  1. Ed Cruz

    What good is upping the money for small business if there is no credit or you can not qualify and you have a knock out business start-up. The momentum of shortsightedness acts again. (The Republicans are obstructionist hypocrites who can not confront their own failures now and when they stood in the Light of Glorious Opportunities and are decidedly in the throws of a very very long winter of decomposition, the only question is whether or not the Democrats will follow their lead.) Ms Pelosi get Real, a package has all the parts covered or its doomed for mediocrity and we do not have time for less than very good or excellent.

    October 22, 2009 03:26 pm at 3:26 pm |
  2. Truth seeker

    I'd still like to know if Madam Nancy lied about being briefed on waterboarding...or is she really just so old she can't remember? C'mon CNN, resurrect the story and do some investigative reporting. Scary that this old croan is in such a powerful position. I'd rather see her basking in the sun at her winery...ok.. well, maybe not really "see" her but just know that she's there not messing things up for the rest of us working stiffs that pay the taxes she's trying to give away to the non-working stiffs and illegals..

    October 22, 2009 03:27 pm at 3:27 pm |
  3. Me

    Let me get this straight: The first stimulus bill has done nothing but make the government able to interfere in big business' dealings. So, now, instead of cutting taxes for small businesses we're going to raise them and then loan them more government money? Why would we do this? Control. Plain and simple. It doesn't DO anything but make the government able to say what small businesses can and can't do because they took government money. Dems are the party of tyranny. The sad thing is, deep down the know it and they feel justified in it.

    October 22, 2009 03:29 pm at 3:29 pm |
  4. phoenix86

    Another Pelosi program to match the democrats past program of helping the poor get home loans. We all know how THAT program worked out.

    October 22, 2009 03:32 pm at 3:32 pm |
  5. Nic

    What do you know? Obama is trying to help our economy...People that keep running off at the mouth about how much Obama is going to destroy small businesses need to learn the facts.

    October 22, 2009 03:34 pm at 3:34 pm |
  6. New Age Independent

    So now the Democrats want to fund small businesses? Republicans, and Beck (since he isnt a Rep) have been screaming for this throughout the year. Oh, and screw the 1st time mortgage, If they are going to do anything, make it across the board.

    October 22, 2009 03:41 pm at 3:41 pm |
1 2