(R-Maine)
This past week, President Bush underscored the importance of taking swift action to pass an economic stimulus package that is temporary and doesn’t raise taxes. Just days before the President voiced the urgency in which Congress needs to act, I spoke with Treasury Secretary Henry Paulson and sent a letter to President Bush outlining some key initiatives that we must include in any stimulus package that moves forward. The President rightly recognized the seriousness of our economic situation and it is incumbent on Congress to move quickly to pass a comprehensive stimulus package focused on helping those families and individuals who have been hard-hit particularly by job losses and soaring energy prices — and will use the funds to pay for vital necessities. Certainly, having talked to many people in Maine, where oil and gas prices are so extraordinarily burdensome, there is no question that the time to act is now.
I’m also pleased the President supports the inclusion of small business measures in a stimulus package, as I’ve consistently said they are critical to stabilizing the economy given that small businesses comprise 99.7 percent of all employer firms. I have urged the President and Secretary Paulson to expand small business expensing and extend targeted tax incentives such as the R&D Tax Credit.
By expanding small business expensing, we can free-up additional capital to create new jobs. Investing in our nation’s small businesses is a direct and responsible step we can take to reverse the current economic downturn that is creating numerous hardships for employers and workers throughout the country.
Generally speaking, when businesses purchase equipment, they must recover the cost (depreciate) of that equipment over a period of years. However, Congress could incentivize businesses to purchase equipment today (keeping factories in business and helping businesses to expand) by allowing businesses to write-off a significant portion of the cost of a purchase in the year it is obtained.
Small businesses, in 2008, may write-off the cost of up to $128,000 in new equipment. I introduced legislation, S. 269, to permanently raise this figure to $200,000 to help spur new purchases. Increasing small business expensing would give qualifying firms the incentive to make job-creating investments in their plant and equipment.
If we are to successfully strengthen our economy, we must be willing to invest in our nation’s ability to stay competitive in a global economy market. The Research and Development Tax Credit, which has helped to spur innovation in a wide range of industries, including manufacturing and health care, expired at the end of 2007, as Congress was unable to clear an extenders package. Congress should act now to extend this incentive through at least 2009 to ensure businesses have the resources to invest in cutting-edge technologies that boost economic growth.
The President and the Congress must work together in a bipartisan, collaborative manner to address vital economic concerns for hardworking Americans. Both parties and both branches have a collective obligation to demonstrate that we have the capacity to address the critical issues facing this nation. The slowing economy is having a very real impact on Maine’s lower-income and middle-class families. It is critical that any stimulus package include targeted incentives for the engine country’s economy, small businesses. Taking these steps will help small businesses free-up additional capital to create new jobs and help reverse the current economic downturn that is creating numerous hardships for employers and workers throughout Maine.
