Obama Makes "Apple Pie" Politics

President Obama sure seems to love small businesses, even though he opted for a six-inch sub today at Tastee Sub Shop in Edison, New Jersey, instead of the regular 12-inch sandwich.

That was a concession to his age, Obama said. He’s about to turn 49.

The stop at the tiny sandwich shop provided the president with a photo op with small-business owners, including two who started or expanded their ventures with the help of Small Business Administration loans. These business owners saved thousands of dollars because the economic-stimulus bill waived the fees on these loans.

Obama wants Congress to bring back these now-expired breaks on SBA loans and renew the 90 percent government guarantee on the SBA’s flagship 7(a) loans. These enhancements helped revive SBA lending until they expired June 1. Since then, SBA lending has plummeted.

Obama spoke as the Senate haggled over legislation that would revive these SBA loan enhancements and increase their maximum size. The bill also would provide community banks with up to $30 billion in cheap capital that they could use to make small-business loans. It also includes a variety of tax cuts for small businesses.

Republicans ought to embrace this legislation, Obama said. It’s got everything they profess to love—“helping small businesses, cutting taxes, making credit available,” he said.

“This is as American as apple pie. Small businesses are the backbone of our economy. They are central to our identity as a nation. They are going to lead this recovery,” the president said.

Republicans, however, are making it just as hard to pass this bill as any other legislation proposed by Democrats. Some Republicans don’t like the idea of the federal government providing capital to community banks—it sounds like “TARP Jr.” to them, playing off the acronym for the bank bailout. Other Republicans want to use this legislation as the vehicle for other priorities, such as removing a paperwork burden created by the health care reform bill, which requires businesses to file forms with the IRS any time they spend more than $600 with another business.

The president just wants lawmakers to get the bill done “before they go on vacation.”

On Tuesday, this legislation was the first subject of his remarks to reporters after meeting with Democratic and Republican congressional leaders. Their conversation, he said focused on “how do we create jobs.”

“I believe that starts with doing everything we can to support small businesses,” he said.

“Many of these businesses still can’t get the loans and the capital they need to keep their doors open and hire new workers,” he said.

A new survey of small-business owners by the National Small Business Association found that 41 percent haven’t been able to get the financing they needed—the highest percentage in the past 17 years.

“Unless small-business owners are able to secure financing, we will continue to see high unemployment,” said NSBA president Todd McCracken, who strongly supports the bill pending in the Senate.

Obama’s attention to small business is grounded in policy and politics. His administration honestly believes the small-business lending fund, combined with SBA expansion, will jump-start lending. Many folks in the small-business community agree.

But this small-business bill also is good politics. It gives the president and his fellow Democrats a chance to paint themselves as being America’s pro-small-business party. That’s a role Republicans traditionally have enjoyed.

This legislation, however, only addresses a few of small businesses’ needs, a point made by the National Federation of Independent Business. Access to a credit is a problem for some businesses, they concede, but small businesses are more worried about the weak economy, and the prospect of tax increases, additional regulatory burdens, and higher health insurance costs.

If Obama wants to be known as the small-business president, he’ll have to win over business owners on these issues as well.

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Kent Hoover is the Washington bureau chief for bizjournals.