President Obama offered a series of modest steps aimed at helping small businesses Wednesday after Republican criticism that his push for raising taxes on the high earners would hurt small businesses caught in the IRS dragnet.
The White House hailed the new rules as a significant set of executive orders that would “accelerate federal payments, reduce paperwork and make it easier for small firms to access loan and tax credits.”
In reality, the steps were quite meager, and the most substantive of the initiatives simply repackaged an order the Obama administration already had made.
The White House appeared to concede the repackaging point by dubbing one of the new orders SLA 2.0, a relaunch of the Small Loan Advantage that would raise the maximum loan amount to small businesses from $250,000 to $350,000 and make it easier for lenders to extend loans to small businesses.
The new rules follow Mr. Obama’s renewed call for a one-year extension of the Bush-era tax cuts for households making less than $250,000 annually, part of an election strategy to cast himself as a champion of the middle class and Republicans as the party that favors the wealthy.
The president has blamed Mr. Romney and the Republicans for holding the middle-class tax cuts hostage while they hold fast to extending the tax cuts for everyone. Republicans have decried Mr. Obama’s resistance to extending all the tax cuts, arguing that small businesses would get caught in the over-$250,000 threshold, making it more difficult for them to expand and create jobs.
The president was set to discuss the new rules for small businesses as part of a broader meeting with Democratic congressional leaders at the White House on Wednesday that also likely would include a strategy session on tax cuts for the rich. Some Democrats in tough re-election races have said they favor extending tax cuts for all but the highest earners, those making more than $1 million a year, a clear break with the $250,000-level Mr. Obama is pushing.
After the meeting, neither the White House nor the Democratic leaders publicly commented about their closed-door discussion, but Senate Majority Leader Harry Reid of Nevada said he would schedule a vote soon on Mr. Obama’s plan to extend the tax cuts for households earning up to $250,000 a year while letting them expire for those making more.
Republicans plan to offer their proposal as an amendment to a small-business tax credit the Senate is considering this week.
Reacting to Mr. Obama’s latest announcement, the office of House Speaker John A. Boehner, Ohio Republican, quickly noted that one of the president’s new rules, an acceleration of payments to small businesses that subcontract with the federal government, tracked closely to an administration edict from last year.
“The White House has so little to offer small businesses, they’ve resorted to recycling, reusing and repackaging,” Boehner spokesman Brendan Buck said. “This is no solace for small businesses facing a huge tax increase next year under the president’s plan.”
The White House countered that Wednesday’s “Quick Pay” plan applied to subcontractors dealing with the federal government and amounted to an extension of the plan announced last year, which focused only on small business dealing directly with the federal government.
“The original announcement in 2011 was a real success,” said White House economic adviser Gene Sperling. “We need to bring this to more small businesses so we’re extending this effort to reach down to small business subcontractors.”
The new rule would direct agencies to make contract payments along an accelerated timeline to all prime contractors for the next year, which the White House says is typically 15 days after receipt of proper documentation, as opposed to 30 days, “with the understanding that those prime contractors will similarly accelerate payments to their small business subcontractors,” the White House said in a fact sheet.
The other initiatives would offer shorter application forms and overhaul the federal tax credit for startups and small businesses operating in lower-income communities.