CFA Alerts Senate: Vote No on H.R. 5297, the Small Business Jobs Act

Tuesday, September 14, 2010 2:05 PM

Today, the Center for Fiscal Accountability warned Senators to vote against the latest substitute amendment for H.R. 5297, the Small Business Jobs Act. The bill would create a $30 billion lending fund for small banks, structured along the same failures of the Troubled Asset Relief Program (TARP). This bill would force an ever increasing amount of burden on the taxpayer to continue the wasteful spending practices of the government. Amongst other things, the bill:

• Creates a $30 billion slush fund for Treasury to inject capital into small  banks, the same system used in allocating TARP funds, despite the fact that over a sixth of banks who received funds, almost all small lenders, have missed the dividends payments on their loans.
• Continues the vicious government bailout cycle at a time when taxpayers are calling for smaller government and less public intrusion into private enterprise
• Will cost taxpayers an additional $6.2 billion due to the way the bill is scored. Instead of accounting for actual market value of the divideds small banks would be required to pay back to Treasury, the legislative score of the bill uses overly optimistic estimates that show the lending fund netting $1.1 billion in surpluses. In actuality, the risk of the lending coupled with the likelihood small banks will not pay back these loans means taxpayers will be on the hook for at least an additional $6.2 billion in financial subsidies, if not more.

Click here to read the full alert.

Tags: SpendingLimits Bailouts Federal | Comments (3)

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