May 14th 1983 President Reagan gave a weekly address on small business. Today, February 6th 2010, President Obama gave his small business address. Comparing the two, how different are they? Both Presidents face challenges’ helping small business grow, both believe that this will create jobs and grow the economy. Are they that different in their approach?
In 1983 Reagan faced high unemployment and felt that small business was the answer to the economy’s woes. In his weekly address to the nation he championed the small business owner. Obama has followed in his footsteps and gave a similar address 02-06-2010.
Obama and his plan to “Open Doors For Small Business”
Over the past few weeks, starting with the State of the Union Address, Obama has been campaigning for a small business plan that would, create jobs and stimulate the economy. His plan would include 3 main components
- $30 billion in diverted TARP funds to community banks for the purpose of lending to small business.
- Tax breaks for small business. $5,000 tax credit for hiring new employees
- Continue to waive the fees charged to banks for funding SBA loans, and increasing the size amount guarantee.
In addition the plan would call for elimination of all capital gains taxes on small business investment, and also to make it easier for small business owners to refinance their mortgages.
Reagan’s proposal for small business (exerts from his address)
- Reducing the regulatory burden on small business
- Passing a Small Business Innovation Development Act to direct millions of dollars in research funds to high-tech firms
- Passing the Prompt Payments Act to assure that small businesses dealing with the Federal Government get paid promptly
- Most important, providing solid incentives for new investment and risk-taking by cutting personal tax rates, shortening depreciating schedules, and sharply reducing estate taxes on family-owned businesses and farms.
Both Reagan and Obama have proposed small business tax breaks. Obama’s would come as a credit for hiring, Reagan’s was a lowering of the tax burden on small business. Reagan believed that lowering the taxes would increase the job growth naturally over the long term. The Obama plan would only be for this year, a welcome benefit for hiring new employees, but only in the short term. Reagan would also propose that funds would go directly to businesses and Obama would have TARP funds go to local community banks.
The verdict will remain out on Obama’s small business plan for the foreseeable future, however Reagan’s plan has the proven to be a success. Depending on which side of the fence you stand on politically.
Some high points from both addresses:
Obama:
I believe a key part of that foundation is America’s small businesses – the places where most new jobs begin.
Reagan:
Small firms account for nearly half our jobs; they create some 60 percent of new jobs; and they’re on the cutting edge of innovation, providing products and ideas for the future.
Obama:
We can rebuild this economy on a new, stronger foundation that leads to more jobs and greater prosperity.
Reagan:
We came to Washington confident that this small business spirit could make America well and get our economy moving again
Obama:
As Americans, we make our own destiny
Reagan:
I think America’s witnessing a renaissance in enterprise
Obama:
But what we must remember at a time like this is that we are not helpless in the face of our difficulties.
Reagan:
Entrepreneurs have always been leaders in America. They led the rebellion against excessive taxation and regulation.
Obama:
Government can’t create these businesses, but it can give entrepreneurs the support they need to open their doors, expand, or hire more workers. And that’s what we’ve always done in this country.
Reagan:
Governments don’t reduce deficits by raising taxes on the people. Governments reduce deficits by controlling spending and stimulating new wealth, wealth from investments of brave people with hope for the future, trust in their fellow man, and faith in God.
Transcript of Reagan’s weekly address http://www.presidency.ucsb.edu/ws/index.php?pid=41324
