Federal Workforce Reduction Act of 2010

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 1640 and ask for its immediate consideration.

Mr. Speaker, for the purposes of debate only, I yield the customary 30 minutes to the gentleman from Florida (Mr. Lincoln Diaz-Balart). All time yielded during consideration of the rule is for debate only.

General Leave

I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and insert extraneous materials into the Record.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, House Resolution 1640 provides for consideration of the Senate amendment to H.R. 5297, the Small Business Jobs and Credit Act of 2010. The rule makes in order a motion by the chair of the Committee on Financial Services to concur in the Senate amendment. The rule waives all points of order against consideration of the motion and provides that the Senate amendment and the motion shall be considered as read. The rule provides one hour of debate on the motion controlled by the Committees on Financial Services, Small Business, and Ways and Means.

The rule also allows the Speaker to entertain motions to suspend the rules through the legislative day of October 1, 2010. Finally, the rule waives clause 6(a) of rule XIII which would allow for same day consideration through Friday, October 1, of any measure reported from the Committee on Rules.

Mr. Speaker, today the House considers a tremendously important piece of legislation that provides long-overdue assistance to the millions of small businesses in our country. The Small Business Jobs and Credit Act of 2010 grants immediate tax relief to small business owners, increases access to much-needed capital, and enhances the ability of small businesses to export goods overseas.

Today, the House delivers on a promise it made to small businesses. With the passage of this bill, small businesses, the backbone of our economy, will be given the tools and relief they need to expand their companies, to create more jobs and to help this Nation recover from the worst economic recession in decades.

Mr. Speaker, this bill provides more than just assistance for short- term economic recovery, which it accomplishes by increasing the amount of money that banks can lend to small businesses, by eliminating certain Small Business Administration loan fees, and by giving States the increased flexibility to manage their own small business lending programs.

This bill is also a blueprint for new and long-term job creation. We have heard the pleas from entrepreneurs and small business owners in our districts, and we closed the legal loopholes which gave multinational corporations an advantage in securing government contracts over HUBZone, 8(a), service-disabled veterans, and women- owned businesses. Everyone is now on a level playing field when it comes to competing for Federal contracts.

Perhaps the most important provision in this bill is the increased access to credit. As a small business owner myself, I know how difficult it is to make ends meet. When I first started my business, long before the credit crunch hit, fortunately I was able to work with a small community bank that was in a position to give me access to capital that was critical to getting my company up and running.

Today, not all small businesses are so fortunate. No one was harmed more in the credit market collapse than small businesses. Throughout my home State of Maine, the stories I hear each week are the same:

``They say the economy is getting better, but I still can't get the capital I need to make payroll or rehire those employees I was forced to lay off, much less think about expanding.''

This bill changes that by providing real relief at the same time small businesses need it the most.

The benefits are not theoretical. This isn't wishful thinking. We know that increasing the 7(a) loan limits from $2 million to $5 million, that increasing the 504 loan limits from $1.5 million to $5.5 million and that increasing the 7(a) Express Loan limits from $300,000 to $1 million will produce growth and jobs in communities all over our country.

In July, the owner of Mount Desert Island Ice Cream, a small business in Bar Harbor, Maine, wrote to me to share her incredible success story. Despite the turbulent economy, she expanded her business and created 10 new jobs this summer because of a Recovery Act ARC loan.

She explained if it weren't for the access to new capital, she wouldn't have been able to expand from two stores to three. She was able to use the Federal loan to manage the debt burden on her existing store locations, which freed up her cash flow, letting her expand.

The results were a mini-economic boom in Portland. Mount Desert hired a staff of 10. It employed contractors and suppliers to retrofit the new store, and it buys more and more ingredients from local Maine producers, all because she had access to government-backed loans.

I will say it obviously didn't hurt, Mr. Speaker, that business is also booming because her store sells really, really good ice cream. I think President Obama even got to enjoy a scoop or two when he went to Maine this summer.

You know, I held a workshop in my district at the height of the recession in June of 2009, before the Recovery Act loans were available; and I invited small business owners from across Maine to attend. The response, frankly, was overwhelming. Hundreds of small, struggling businesses came because they had nowhere else to turn. They needed help to stay afloat and to meet their payrolls. They were adamant that loan limits were insufficient and that lending had dried up.

In Maine, fishermen who run small businesses need capital for boat repairs--to replace gears and engines. Some of our fishermen are having a particularly difficult time gaining access to funds because they are already heavily in debt for their boats and permits, making it difficult for lenders to assess their levels of risk and exposure. Worse, fishermen who want to purchase and increase processing capacity to boost prices for the catches they receive face enormous difficulties in purchasing the facilities they need to process multiple species at once.

One Maine fisherman explains it to me this way: ``The main problem is that, when most of us took out loans for our businesses, it was some time ago, and we could operate like a normal business. Now the struggle is getting even harder. Banks that I have dealt with do not seem to realize or care that things are different, and they still have fairly rigid rules that are based in the past about financing these operations. They pretty much laugh us out of the room now when they see the income from the last few years, mostly due to a lack of price for the fish we catch. We need some kind of low-interest loan program with very affordable payments if we are to keep the fleet in Maine until rebuilding occurs.''

The loan guarantees included in this bill will make it more attractive for local lenders with the experience and know-how to provide access to the financing to our Nation's small business owners, and the reduced fees will make it more affordable for small businesses to grow, expand, and create jobs. This is why those at SBA support this bill, because they are able to work closely with lending institutions to assist our small businesses.

Mr. Speaker, the recovery is under way, but we are certainly not out of the woods yet. Unemployment in my home State of Maine is about 8 percent. That means almost 56,000 Mainers are out of a job. Passing the Small Business Jobs and Credit Act will provide much needed help. If the number of Maine small businesses with fewer than five employees added just one employee, then we could cut unemployment in half in our State. If every small business in Maine hired one more person because of the benefits in this bill, then we would certainly be on the road to recovery.

This bill will also stimulate long-term job growth, once the economy is back on track, by implementing provisions that small businesses have long sought:

There are numerous tax benefits that will entice rather than discourage our budding entrepreneurs from starting their own businesses;

This bill will allow a taxpayer to deduct up to $10,000 in trade or business start-up expenses, an amount currently capped at $5,000. Allowing owners to keep more money and to reinvest it in their companies at the outset, as they work to grow and expand their businesses, is critical;

This bill also allows owners to write off up to $500,000 in capital expenditures in 2010 and 2011, subject to a phase-out when they exceed $2 million. It also eliminates all capital gains taxes on certain small business investments for the 2010 tax year. For owners who have held off on hiring or making significant investments in their businesses, these tax provisions will allow them to act this year or next instead of continuing to wait;

When it comes to competing for Federal Government contracts, we level the playing field for small businesses by closing loopholes that previously gave large companies a built-in advantage in seeking those contracts;

We require a regular review of size standards to make sure that small businesses that are fortunate enough to expand don't retain an advantage over their smaller competitors in competition for small- business-only contracts;

We treat those in the aquaculture industry on par with other small businesses, and we make those companies eligible to receive SBA economic injury disaster loans.

Could this bill be better? Of course it could, but small businesses demand our help now. They can't wait, and we have an obligation to act swiftly to pass this bill today to make good on our promise to reward innovation, to loosen outdated limits on lending, and to encourage entrepreneurs to go to the SBA for help in starting and building their own businesses.

I look forward to the passage of this critical bill.

I reserve the balance of my time.

Mr. Speaker, I appreciate the comments my colleague from the other side of the aisle made about the 1099 issue and the impact with the health care bill. I do want to remember that only recently we had that bill on the floor. The people on my side of the aisle actually voted to repeal that provision and the people on the other side of the aisle opposed that. So we have had an opportunity to fix that, and I'm not clear about why the other side of the aisle wasn't with us on that, and I'm a little confused that he is bringing it up this morning.

I yield 3 minutes to my colleague on the Rules Committee, the gentleman from Massachusetts (Mr. McGovern).

Mr. Speaker, I yield 2 minutes to the gentlewoman from Texas (Ms. Jackson Lee).

Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. Davis).

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Wisconsin (Mr. Kind).

Mr. Speaker, I yield 2 minutes to the gentleman from New Jersey (Mr. Pascrell), a member of the Ways and Means Committee.

I yield the gentleman an additional 30 seconds.

Mr. Speaker, I yield 1 minute to the gentleman from North Carolina (Mr. Etheridge), a member of the Ways and Means Committee.

Mr. Speaker, I am happy to yield 1 minute to the gentlewoman from Nevada (Ms. Berkley).

Mr. Speaker, I yield myself the balance of my time.

The Small Business Jobs and Credit Act of 2010 gives immediate relief to struggling small businesses across the country. It combines more than $12 billion in tax relief with increased access to critical financing so that our Nation's small businesses can move forward on new or delayed expansion plans.

Small business growth means job creation. Our economy will only continue to improve as our businesses bring back laid off employees and hire new workers. One of my constituents, the owner of the popular Allagash Brewing Company in Portland, Maine, describes the increase in the expense allowance under section 179 as a ``great idea''--something that will enable him to invest in his brewery and expand his brewery, which means hiring more employees.

Allagash Brewery is the perfect example of who will benefit from this legislation, Mr. Speaker. Fifteen years ago it began with a few employees working together in a 4,000-square-foot building financed by SBA loans, which were used to purchase the tanks and the equipment necessary to brew some exceptional beer. They did most of their own welding and manufacturing, and they produced 120 barrels of beer that first year.

This year they employ 28 people in a brand new facility and are on track to produce more than 22,000 barrels of beer each year, and they are still growing. With the increase in the section 179 expensing allowance, Allagash can invest in new equipment, expand operations to meet its tremendous demand, and hire several new employees. If not for this bill, expansion plans may have

been put on hold and no new jobs would have been created.

Mr. Speaker, this is a very good bill that should be supported by every Member of this House. It ensures that small businesses, not big corporations, have the tools they need to expand and grow, and it ensures that regular Americans on Main Street take part in the economic recovery.

The Small Business Jobs and Credit Act of 2010 spurs short-term economic recovery while paving the way for long-term business growth once the economy is back on track.

I urge a ``yes'' vote on the previous question and on the rule.

The material previously referred to by Mr. Lincoln Diaz-Balart of Florida is as follows:

Amendment to H. Res. 1640 Offered by Mr. Diaz-Balart of Florida

At the end of the resolution add the following new section:

Sec. 4. Immediately upon the adoption of this resolution

the Speaker shall, pursuant to clause 2(b) of rule XVIII,

declare the House resolved into the Committee of the Whole

House on the state of the Union for consideration of the bill

(H.R. 5348) to amend title 5, United States Code, to reduce

the number of civil service positions within the executive

branch, and for other purposes. The first reading of the bill

shall be dispensed with. All points of order against

consideration of the bill are waived. General debate shall be

confined to the bill and shall not exceed one hour equally

divided and controlled by the Majority Leader and the

Minority Leader or their respective designees. After general

debate the bill shall be considered for amendment under the

five-minute rule. During consideration of the bill for

amendment, the Chairman of the Committee of the Whole may

accord priority in recognition on the basis of whether the

Member offering an amendment has caused it to be printed in

the portion of the Congressional Record designated for that

purpose in clause 8 of rule XVIII. Amendments so printed

shall be considered as read. At the conclusion of

consideration of the bill for amendment the Committee shall

rise and report the bill to the House with such amendments as

may have been adopted. The previous question shall be

considered as ordered on the bill and amendments thereto to

final passage without intervening motion except one motion to

recommit with or without instructions. If the Committee of

the Whole rises and reports that it has come to no resolution

on the bill, then on the next legislative day the House

shall, immediately after the third daily order of business

under clause 1 of rule XIV, resolve into the Committee of the

Whole for further consideration of the bill. Clause 1(c) of

rule XIX shall not apply to the consideration of H.R. 5348.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

I would like to thank my friend, the gentlewoman from Maine (Ms. Pingree), for the time; and I yield myself such time as I may consume.

Today, the majority, Mr. Speaker, brings forth another closed rule, denying the minority the right to offer amendments to what many colleagues contend is a flawed product from the Senate.

At the Rules Committee meeting yesterday, I was struck by a quote, a statement, made by the distinguished chairman of the Financial Services Committee:

This is $30 billion. It's not $300 billion. It's not $3 trillion.

That is precisely the problem with the majority party. They have already spent all the money available. Once you pass an almost $1 trillion stimulus package that does not stimulate economic growth, the distinguished chairman of the Financial Services Committee is correct that $30 billion doesn't seem like such a big deal, but it is for the overburdened people of the United States of America.

The underlying legislation establishes a $30 billion fund managed by the Treasury Department in an effort to increase lending from small banks to small businesses. The majority claims that this fund will move quickly to inject capital into the marketplace.

What we have today before us is junior TARP, Mr. Speaker. It's kind of a rehash of the 700-or-so-billion-dollar fund that was also supposed to make credit available for businesses. I was proud to oppose TARP then, and I am proud to oppose junior TARP today.

We on the minority side, the Republicans, believe that lowering taxes on small businesses would do far more to help create jobs and lead us out of this recession. One hundred days from today, the 2001 and 2003 tax cuts will expire and every American taxpayer will see tax increases at exactly the wrong time. Instead of taking clear, concrete action to reduce the tax burden on small businesses, the majority brings us junior TARP today.

There is a hidden provision, by the way, in this bill, Mr. Speaker, that makes even worse the antibusiness provisions in the health care legislation that this Congress passed previously. Pursuant to the health care law, small businesses are required to file a form 1099 with the IRS for every business and every individual to which they make payments of at least $600. That is a significant burden on all businesses, especially on small businesses. It's important to note that even the administration has recently backed changes to that provision in their health care law. So Americans might expect legislation to come before us to assist small businesses to get out from under that onerous provision, but the underlying legislation goes completely in the wrong direction, in the other direction.

This Congress can do better. But the Rules Committee will not allow any Member to offer any amendments under this closed rule to improve this legislation. We should defeat this rule and allow the House to proceed through regular order and allow Members to bring forth any and all ideas to provide meaningful help for our struggling small businesses.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, again I thank my friend from Maine for her courtesy and her management of this rule.

I will be asking for a ``no'' vote on the previous question so that we can amend the rule and allow a vote on the legislation introduced by Congresswoman Lummis.

In this debate, when the underlying legislation is adding another $30 billion to our Nation's debt, I think it's fitting that the minority is bringing forward another YouCut proposal.

The American people are sounding the alarm that we have to change course. We have to focus on reducing the size of government, not create new programs that dig our fiscal hole deeper and deeper. That is going to require bipartisanship, which I hope to see soon, but we're not seeing it yet. And really, that's worrisome.

Over the last week, participants in the minority whip's YouCut initiative voted on programs for us to bring to this floor for cutting. To date, participants in that program have voted to cut over $120 billion in spending. This week, the participants in that program voted to cut Federal staffing levels to 2008. The legislation that we would be able to vote on if the previous question is defeated would exempt agencies that are critical to national security. It's no coincidence that while the administration and this Congress increase Federal spending by trillions of dollars, we see Washington, D.C. thrive, but the people in the congressional district that I've been honored to represent for 18 years continue to hurt as Americans throughout the Nation are hurting. We believe that we have to return the function of job creation to the private sector.

So I will be asking Members to vote ``no'' on the previous question so that we can have a vote on Congresswoman Lummis's bill on cutting Federal staffing. And again, I remind Members that a ``no'' vote on the previous question will not preclude consideration of the underlying legislation before us today.

I ask unanimous consent to insert the text of the amendment and extraneous materials immediately prior to the vote on the previous question.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, it's my pleasure to yield 4 minutes to the author of the legislation that we would be able to consider if the previous question is defeated, the gentlewoman from Wyoming (Mrs. Lummis).

Mr. Speaker, it's my pleasure to yield 2 minutes to the distinguished gentleman from California (Mr. McClintock).

Mr. Speaker, it's my pleasure to yield 2 minutes to the distinguished gentleman from Tennessee (Mr. Roe).

Mr. Speaker, it's my pleasure to yield 2 minutes to my friend, the great leader from Michigan (Mrs. Miller).

Mr. Speaker, I thank my friend from Maine and all who have participated in this debate. I again seek a ``no'' vote, and I seek a ``no'' vote on the previous question.

I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I rise to urge my colleagues to support my proposal to halt the unchecked growth of the Federal Government.

In selling the $1.1 trillion stimulus package to the American people, the President promised that it would keep unemployment under 8 percent. The results of this expensive experiment are in. It failed. We have lost millions of private-sector jobs, and unemployment is hovering just under 10 percent. But the Federal workforce, fueled by the stimulus and other massive spending bills, has grown by 188,000 employees--or 15 percent--and it's only going to get worse. The Obama administration is on track to hire 230,000 new employees by next year.

As we approach the full implementation of ObamaCare in 2014, our government will have to staff a vast new health care bureaucracy. This could include thousands of new IRS employees to enforce the health care mandate on individuals and businesses.

My bill, the Federal Workforce Reduction Act, would halt the sprawl of government and get us back to pre-Obama government employment levels. My bill would not force any civil servant out of their job, and it would exempt the Departments of Defense, Homeland Security, and Veterans Affairs. But all other agencies could only hire one new civilian employee for every two that retire or otherwise end their service.

Our President and his agency heads would have to control their appetite for government expansion. They would make due with fewer resources--just like the individuals, families, and small business owners who have had to make sacrifices and cut back to deal with the recession.

By attrition the government would shrink back to pre-Obama levels and save taxpayers $35 billion over 10 years. But most importantly, my bill would help reverse a dangerous trend in which the private sector shrinks and the government sector expands. Growing the government does nothing to help our small businesses--the engines of job creation.

Taxing to give people less money and the government more money to expand does not help the economy. Yet the Big Government chameleon-- debt-financed stimulus, cap and tax, ObamaCare, tax increases coming this January--continues to roam the halls of Congress, threatening to choke off the entrepreneurial spirit that built this country.

Important decisions that should be made by individuals, families, their doctors, or our small businesses are being relocated to Washington to be made by unresponsive bureaucrats. The policies of the Democratic leadership are fostering a culture of dependency on Big Government. They are marching us towards European-style social democracy.

But there is another way. Vote for this provision, cut spending and government employment back to pre-stimulus levels. Stop the big march of government.

I thank my colleague from Maine for yielding me the time.

Mr. Speaker, I rise in support of this rule, and I also rise in support of the underlying legislation.

Small businesses are drivers of economic growth and play a pivotal role in creating jobs in our community. In fact, in my home State of Massachusetts, small businesses represent 85 percent of companies and employ over a quarter of our workforce. As I meet with small business leaders across my district, I hear time and time again that access to capital--dollars that allow our small businesses to invest

and to grow--is a main concern, especially in these difficult economic times.

It is clear to me that small businesses are a vital component of economic recovery. As we work to rebuild our economy and create good- paying jobs here at home, we must support the efforts of small businesses across the country. That is why, Mr. Speaker, we must act today to pass this legislation.

H.R. 5297 goes a long way in helping our Nation's small businesses thrive. Specifically, this bill authorizes the creation of a small business lending fund which will enable community banks to increase lending to small businesses. It raises Small Business Administration loan limits, and it improves access to these loans. It provides grants to States in support of small business lending programs.

In addition to creating future opportunities for investment, this bill provides small businesses across our country with $12 billion in tax cuts and includes a 100 percent exclusion from capital gains taxes on small business investments. These tax breaks will make it easier for businesses to operate and will increase their capacity to grow.

As we invest in our small businesses, we forge a path toward economic prosperity for so many Americans--not only for small business owners, but for those who will be employed by these companies. Improving small business access to capital will foster innovation and encourage the development of new products and services to carry our country forward.

Simply put, Mr. Speaker, we have to act now. It's the right thing to do. All of my colleagues who have gone home and talked to their constituents, and particularly to small business owners, know that this issue of extending credit is a big deal. They want us to help, and that's what this bill is about.

So I urge my colleagues on both sides of the aisle to think about the small businesses that we represent and to support this rule and the underlying legislation. And I urge my colleagues on the other side of the aisle to put people ahead of politics this time and help our small businesses.

Mr. Speaker, I support the rule. It's taken far too long to overcome the obstruction to this bill. This obstruction has impeded $30 billion in credit for small businesses. The credit squeeze has been one of the largest obstacles they are facing today, small businesses. We have been told time after time after time that without

access to credit, small businesses cannot grow.

I am pleased that we continue to focus on job creation through the engine of our economy. Small businesses have generated 64 percent of new jobs over the last 15 years. But we must do more. We must address the elephant in the room. And here's the elephant in the room: we must address the expiration of the middle class tax cuts, which alone will help 98 percent of all Americans and 97 percent of small business. Small businesses have been struggling for decades, not just the last few years, because they have been the victim of previous administrations' and past Congresses' priorities that placed Wall Street and big banks over Main Street small businesses and their community banks.

And here's the rub, and you can't deny it: these priorities have led to a 20 percent decline in small business market shares. And they have lost that to corporate welfare. Look at the record before the recession. Twenty percent more of market loss. That did not fall out of the sky. And I blame both parties. Neither party is privileged to virtue here. No one has a monopoly on this. This Congress recognized the problem.

This Congress has done more for small businesses than others in years. Billions in tax cuts. We funded the SBA, payroll tax holidays, incentives for capital investments, depreciation, on and on. Nine specific tax cuts. Tax and spend? No, we wanted to cut taxes. You didn't give us one vote on any of these. You are standing up and preaching to us that what we have to do is change our culture? Nine tax cuts from this Congress. It's time to continue to do more by moving forward on the middle class tax cuts. I proudly support this rule.