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NFIB Talking Points: Stimulus Update - Feb. 10, 2009

February 10, 2009

The American Recovery and Reinvestment Act of 2009 (H.R. 1) was passed Feb. 10, 2009, by the Senate by a margin of 61 - 37. The House passed a different "stimulus" bill Jan. 28. Like the House-passed bill, the Senate version falls short of including the kind of provisions specifically aimed at helping small business. While it includes some improvements to the House bill, namely a one-year Alternative Minimum Tax (AMT) patch to protect middle income taxpayers, NFIB still has serious reservations about the Senate bill.

Small businesses play a major role in the American economy. They are the source of entrepreneurship and the engine for job creation. Small businesses: 

  • Represent 99 percent of all employer firms
  • Employ about half of all private sector employees
  • Generated 60 to 80 percent of net new jobs annually over the last decade
  • Created more than half of nonfarm private gross domestic product (GDP)

 

Summary of the Senate-passed version of H.R. 1
The Senate version of H.R. 1 continues to include too much spending not targeted at economic growth and job creation.

  • $2 billion "FutureGen" near-zero-emission power plant in Matoon, Ill.--this is the biggest single earmark in history. The Department of Energy ended funding last year because it was an inefficient program.
  • $400 million to screen and prevent sexually transmitted diseases
  • $650 million for the digital television converter box coupon program
  • $448 million to build the new headquarters of a government agency and $248 million for new furniture to fill it
  • $125 million for jobs at the D.C. Water and Sewer Authority--a cost of $480,000 per job

 

NFIB also has serious concerns about the other costs of this legislation, namely:

  • Davis-Bacon: The prevailing union wage rules apply to all of these projects, increasing the cost to the business owner and keeping small businesses from winning these contracts.
  • Unemployment Insurance is expanded in this legislation.
    • Currently, you must be a laid-off, full-time worker to be eligible for 26 weeks of UI.
    • This bill would offer $7 billion to states as long as they add the following groups to those who qualify for UI: part-time workers, workers displaced because his/her spouse moves for work and workers who lose their job due to an unforeseen family emergency.
    • The $7 billion is a one-time incentive to expand benefits and change the focus of the unemployment program.
      • Once the federal funds run out, the states will need to find new revenue to continue to offer expanded benefits which could mean an increase in payroll taxes.

 

Key members of the House and Senate must now meet and resolve the differences between the two pieces of legislation. Once they come to an agreement, both chambers must pass the bill before it can be sent to the president for his signature to become law.

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