Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

July 13, 2009


Washington Post - The Obama administration is developing an initiative to take money from the $700 billion rescue program for the banking system and make it available to millions of small businesses, which officials say are essential to any economic recovery because they employ so many people, according to sources familiar with the plan.

The effort would represent a striking shift from the rescue program's original mandate, since it would direct billions of bailout dollars toward a plan that aims more at saving jobs than at righting the financial system. Some economists estimate that small businesses, defined as firms with fewer than 500 workers, employ most of the country's workforce.

A proposal being floated by senior Treasury Department officials calls for using the bailout funds to expand a government program that helps small companies borrow from banks at low rates to keep their businesses going, the sources said. These "working-capital" loans would come with few restrictions and could be used to buy inventory, hold on to employees and pay off short-term debt. . .

The scope of the Troubled Assets Relief Program, or TARP, has been expanded several times already, first to save General Motors and Chrysler and then to help life insurers. In both cases, government officials argued that emergency assistance was critical for preventing economic upheaval. Making the bailout funds available to millions of small businesses would be a far more dramatic expansion. . .

Administration officials said discussions are in the early stages and that no plan is expected before the fall. Concepts now on the table may evolve or be scrapped altogether, they said. No dollar figure has been set. . .


Anonymous Free Website Design said...

You would think the Obama administration would have understood the importance of small business and their ability to create jobs well before now.

I really can't believe it has taken them so long. I guess, at least they are taking a positive step to make the changes.

July 13, 2009 11:24 PM  

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