House lawmakers voted Thursday largely along party lines to approve legislation that includes a range of measures aimed at helping small businesses get improved access to capital and $12 billion in tax credits for smaller firm owners.
The House voted 237-187 with just one Republican joining nearly every Democrat in supporting the measure.
After the Senate finally managed to break a logjam on the bill earlier this month, the House action means the legislation will head to the White House for President Barack Obama’s signature.
It will be the final effort passed by Democrats to attempt to kick start flagging job growth in the economy before the November midterm elections.
“Our small businesses remain the job-creation engine of our country,” House Majority Leader Steny Hoyer (D., Md.) said at a news conference before the vote occurred. “This bill is critical for allowing small businesses to grow.”
Democrats had hoped to pass several pieces of legislation this year aimed at boosting the economic recovery. But through a combination of Republican resistance in the Senate and an inability on the part of the majority to coalesce around a single legislative strategy, the small-business bill is one of the few measures successfully completed.
Both parties agree that renewed hiring by small businesses is crucial to any turnaround in the job market. Lawmakers say most private-sector job growth comes from small businesses.
Nationally, the jobless rate of 9.6% has remained stubbornly high despite repeated attempts by the Obama administration and Congress to foster job creation.
The Obama administration has been a strong backer of the legislation.
“The small business jobs bill passed today will help provide loans and cut taxes for millions of small business owners without adding a dime to our nation’s deficit,” Mr. Obama said in a statement released by the White House.
Mr. Obama said he would sign the bill into law on Monday.
The centerpiece of the bill is the creation of a $30 billion lending facility that would direct taxpayer money to regional banks on the condition they lend it out to small businesses. Unlike the emergency financial rescue package implemented at the height of the crisis in 2008, banks would have to volunteer to participate in this program.
The rate of interest they are charged on the public funds would depend on how much they increase their small-business lending.
Due in large part to the expected returns to the taxpayer from this plan, the bill has been estimated to raise net revenue of around $2 billion over the next decade.
The bill also includes about $12 billion in tax breaks, including an immediate write-off of 50% of new equipment purchases in 2010 for small and large businesses. It would double, to $500,000, the amount of new investment that small businesses are allowed to expense in 2010 and 2011.
It contains a proposal from Mr. Obama to eliminate capital-gains taxes on certain small-business stock.
The legislation directs funds to state governments so they can participate in their own lending programs. Rep. Gary Peters (D., Mich.) successfully pushed for this measure to be included, citing the success of a program in Michigan through which the state provides collateral to loans made to small businesses.
The bill would allow self-employed people to deduct health-insurance costs for themselves and their families. It also removes employer-provided cellphones from a list of items that can be taxed as fringe benefits.
Although efforts to provide assistance to the small-business sector are generally passed with ease by lawmakers, this legislation had been stuck on the Senate floor for more than a month because of partisan rancor.
Republicans opposed the creation of the lending facility, drawing comparisons of it to the Troubled Asset Relief Program.