One can only postulate that since there was no room in President Obama’s bloated 2010 budget for small business initiatives, he instead chose to apply some TARP money that’s just lying around to get small business working again. I wish Mr President the best of luck on that plan as he’ll be needing it.
President Barack Obama proposed a $30 billion small business lending program Tuesday, the latest in a series of administration efforts to jump-start hiring by the nation’s small businesses.
The program, which Mr. Obama detailed at an appearance in Nashua, N.H., would invest $30 billion from the government’s Troubled Asset Relief Program in community banks to encourage them to lend to small businesses. If approved by Congress, the program would incentivize small and midsize banks to provide loans valued at several times that figure.
Didn’t we invest $700 billion in the Too Big to Fail banks for this same purpose? Not that it matters, we’ll try it again with the hopes that community banks will be able to accomplish what TBTF couldn’t.
A proactive sort of administration, White House officials were already prepared to counter the argument that TARP was never intended as a general piggy bank for funding the administration’s whims:
“The law is very clear: The monies recouped from the TARP shall be paid into the general fund of the Treasury for the reduction of the public debt. It’s not for a piggy bank,” [Sen. Judd] Gregg said.
[White House Budget Director Peter] Orszag said new legislation would be required to create the new small-business plan. He said the cost of the plan would depend on the subsidy rate of new activity and wouldn’t amount to a net cost, in terms of the deficit, of $30 billion.
Considering that he’s referring to a deficit of $3.8 trillion, I guess $30 billion isn’t really anything to get stressed out about after all.
Meanwhile, can community banks counter the continued deterioration of commercial real estate weighing on their balance sheets? I guess we’ll have to wait it out and see.