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Last week, I held a conference call with Chambers of Commerce and other business leaders from across the 5th District to gain their ideas on job creation and how to create new competitive advantage in Central and Southern Virginia. Supporting small businesses is one of the best ways we can turn our economy around. Here are some of the ideas and issues they raised:
Access to Capital. Many of the businesses expressed great frustration at not having access to sufficient capital to expand their businesses or to get working capital to keep their businesses operating. One participant said of working capital, “when we need it most, we get it least.” Banks’ unwillingness to lend is based on a number of factors, including the generally tight credit market, internal bank policies, and government regulation. President Obama has proposed federal guarantees to loans made to small businesses, thereby lowering the exposure of the banks in case of default—an idea most call participants favored. They also were enthusiastic about eliminating the capital gains tax on small business equity investment.
Government Investment. There was general support for the use of government funds to invest in our infrastructure and our service sector. Upgrading our aging infrastructure would not only provide jobs in the short term, but should make us more competitive over the long term. A participant also expressed support for assisting state budgets. Keeping teachers employed and hospitals functioning not only puts money into the economy, but also ensures that we emerge strongly from the recession because we are keeping people educated and healthy, which is essential to maintaining a robust workforce. Finally, there was support expressed for extending the Workforce Investment Act and the Higher Education Act, both of which are necessary for ensuring we retain a skilled workforce, which attracts jobs.
Trade Practices. A number of businesses seek greater government scrutiny of imported products. We are importing inferior products that are produced under environmentally and socially substandard conditions. Products made in America carry with them the costs of keeping our water and air clean, our workers safe and of age, and our safety net intact. There was a desire to examine whether more could be done within the framework of trade rules to level the playing field.
Regulation. The discussion about trade led into a discussion about regulation of business activities. While there was a recognition that some regulation is necessary, there was concern that government too often overreacts to the harm caused by a single bad actor. Rather than further regulating an entire industry when a harm occurs, we should focus our governmental efforts on punishing the one who caused the harm.
On this important point of regulation, there was a major vote in the U.S. House last week in an effort to regulate the Wall Street banks who got us into this current financial mess. While this began as a genuine effort, I was disappointed to see that once again, both parties let the Washington-Wall Street alliance control the bill. By defeating a series of amendments that I supported that would have added tougher transparency and accountability rules, they created loopholes for Wall Street big enough to drive the next economic meltdown through, while placing too much regulation on the little guys – the community bankers that are so important in extending credit to small businesses in our rural areas. For these reasons, I broke with my party and voted against the bill. It’s time for real accountability and a focus on our Virginia businesses, not symbolic posturing.
Please feel free to contact me to share your concerns and ideas. You may call 1-888-4-TOM4US (1-888-486-6487); write to 1520 Longworth House Office Building, Washington, DC 20515; or visit www.perriello.house.gov to sign up for my weekly e-newsletter.