The Real Uncertainty For Business: Where's The Credit?

House Minority Whip Eric Cantor today reiterated the claim that "uncertainty" created by the work Democratic congressional leaders are doing to clean up the mess left by conservative economic policies is responsible for the anemic state of the economic recovery and lack of job creation. Reacting to today's release of the "Economic Report of the President" by the Council of Economic Advisers, Cantor said in a statement:

“The Obama Administration's report is full of blame for the policies of the past, praise for its own failed policies, and promises about their ideological agenda to grow government. Cutting beyond the fluff, the truth that unemployment won't fall back to its 2008 level for another seven years shows up on page 75. Instead of praising themselves and blaming others, a greater focus on small businesses and smart solutions to reduce uncertainty and create jobs would be welcome and long overdue.”

But when Sen. Sherrod Brown, D-Ohio, was asked today during a news conference call about what small business owners were telling him about what was holding them back from hiring, the answer wasn't "uncertainty" created by progressives in Washington.

"What I hear now is consistently about credit. It's always about credit," Brown said, recounting the conversations he has had at dozens of forums in his state. "They'll tell me they have the capacity to grow, they tell me they have new customers and the old customers are coming back. They'd like to know what we're doing on the health bill, of course, but I don't think that's stopping companies from moving forward with what they need to do if they could get credit."

Yet congressional conservatives are opposing a plan by the Obama administration that would address that issue: a $30 billion fund for small-business loans that would use funds repaid by Wall Street beneficiaries of the Troubled Asset Relief Program, or TARP. And they are certainly not embracing Brown's latest proposal, a 50 percent tax on the bonuses paid out by the Wall Street financial institutions participating in TARP. The tax would be applied to bonus amounts over $25,000; those payouts would most likely be taxed at 35 percent today.

The funds raised by Brown's proposal would be administered by the Small Business Administration. It would complement a provision in the jobs bill pending in the Senate that would raise the Small Business Administration direct lending cap to $5 million.

In addition to concerns about credit, Brown said that when he talks to small business owners, "I hear huge amount of anger aimed at Wall Street, particularly about these bonuses, and people want us to stop the bonuses and stop the reckless behavior."

At least, Brown said, Congress should be willing to recoup funds from the people who both precipitated the Wall Street meltdown and stand to profit from the taxpayer-funded rescue and use those funds to support the financial institutions who had no role in the meltdown and the businesses that are prepared to lead the economic recovery.

The members of the Ohio press corps who participated in the conference call indicated skepticism that Brown's proposal would pass, but Brown said he believed it did have strong support and said it should at least get an up-or-down vote. For one thing, it would force conservatives to "choose between their Wall Street benefactors and their small business supporters. ... If they're really interested in getting this economy going, they will support this. If they're more interested in making this another one of Barack Obama's Waterloos, then they'll oppose it. The choice is theirs."

Cantor and progressives do agree on one thing: The Obama administration's projection of an economy producing 95,000 a month in 2010 and an unemployment rate that does not dip below 6 percent until 2015 is unacceptable. It is particularly unacceptable for the working poor, who are experiencing an unemployment rate as high as 30 percent, according to a study this week by the Center for Labor Market Studies at Northeastern University. For the urban poor; for African Americans and Hispanics, whose unemployment rates are nearly double that of white people, and for displaced workers in the industrial heartland and in the West, we need nothing less than a Marshall Plan that puts the public sector and private sector to work producing more than 400,000 jobs a month. Anything less fails to close the gap created by the failed economic policies of the past and risks a crippling economic future.

Credible, nonpartisan polls, including one released Wednesday by Quinnipiac, show that an overwhelming majority of the public would support a government-led jobs initiative, even given their concerns about the federal deficit and their frustration with government generally. It's no wonder: they get the common-sense idea that a country in which tens of millions of its people are unemployed or underemployed cannot pay its bills.

The only uncertainty that's holding back job-creation is the uncertainty that conservatives get this, and that they will do anything other than kowtow to their wealthy campaign contributors and obstruct meaningful attempts to get the rest of the country back to work.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future