Remarks by President Biden Before Meeting with Small-Business Owners

2:08 P.M. EDT

THE PRESIDENT:  Good afternoon, everyone.  We’re joined today by five small-business owners who are helping power America’s economic recovery.

And I want — I want to welcome the Administrator of the Small Business Administration, Isabella Guzmán.  Nice to have you, kiddo. 

ADMINISTRATOR GUZMÁN:  Thank you.

THE PRESIDENT:  And these enterprises and entrepreneurs know that an American economy is strong because America’s small businesses are strong.

Small businesses typically account for more than 40 percent — people don’t realize it — 40 percent of the gross domestic product of the United States.  They create two thirds of all new jobs.  And they employ nearly half — nearly half of all the private sector workers.

And today, thanks to the economic strategy, more — more small businesses are being created, and small businesses are creating more jobs faster than ever before.

Thanks in large part to the American Rescue Plan, last year, Americans applied to start 5.4 million — 5.4 million new businesses, 20 percent more than any other year on record. 

We saw businesses with fewer than 50 workers create 1,900,000 jobs for the first three quarters of 2021 alone.  That’s the highest rate of small-business creation ever — ever recorded in a single year.  And we have some of the folks right here who did it. 

We have every indication that this trend is going to continue.  The reason for that is because we’re giving people financial security to take a risk and pursue their small-business dreams.

This boom has been particularly strong for entrepreneurs of color.

Hispanic entrepreneurs started new businesses in 2021 at a faster rate in more than a decade, 23 percent faster than the pre-pandemic levels.

And, you know, the five folks that join me today exemplify what a difference it makes when — when everyone gets a fair shot.

Jennifer was — was able to start growing her engraving business last year because of the Child Care Tax Credit and the small-business support of the Small Business Administration.

Jeff and Nicolas are master coffeemakers — roasters — who were able to open their first brick-and-mortar café last year.

And Eddie and Daniel were able to turn their food truck into a brick-and-mortar company of their own.  (Laughs.)  That must feel pretty good, huh?

And they’re just some of the folks driving this economic recovery and reminding us that everything — that anything and everything is possible in America.

And my administration is working tirelessly to open doors for more outstanding entrepreneurs.  You know, unfortunately, Republicans have a different approach.

The Republican plan, led by Senator Rick Scott of Florida, Chairman of the National Republican Senatorial Campaign Committee, would tax half of our small-business owners an extra $1,200 a year on average.

Not only do they oppose making big corporations pay their fair share, they want middle-class families and small-business owners to pay more.

Our administration estimates that the Republican proposal would raise taxes on 6.1 million small-business owners, including 82 percent of small-business owners who earn less than $50,000 a year.

That just doesn’t — that’s — that’s just not right.

Our administration wants to make it easier to start a business, easier for a small business to succeed.  And our plan is to, one, expand access to capital for small businesses; make historic investments in technical assistance programs to help entrepreneurs thrive; and direct hundreds of billions of dollars in government contracts to small businesses in every community; and level the playing field — and I mean level the playing field for small business, making sure the largest corporations in America begin to pay their fair share.

And now I’m looking forward to discussing my plan and hearing from these remarkable entrepreneurs.  Thank you for being here.

2:12 P.M. EDT

Source: The White House

The impact of Build Back Better on the interbank market will be reduced by increasing likelihood Democrats failing to come together on its passage… And Jerome Powell may benefit

According to the Tax Foundation, a public policy think tank, President Biden’s proposed “Build Back Better” plan will generate government revenues of $2.1 trillion over the next ten years.  After accounting for approximately $1 trillion in tax credits for individuals and businesses, the Tax Foundation estimates the US government will net just over $1 trillion in revenues over the ten-year period.  This amount can be whittled down further by accounting for tax revenues recovered from increased compliance activity bringing the estimated bottom-line amount generated to $862 billion.

The economic price for the proposal, according to the Tax Foundation, would be a decrease in long-run gross domestic product by .98%; a reduction in capital stock of 1.84%; a wage rate reduction of .68%; and net loss of 303,000 jobs.

Meanwhile, the Committee for a Responsible Federal Budget, a public policy think tank, estimates that after accounting for offsets and expiration of a number of programs, Mr Biden’s “Build Back Better” plan will require financing of another $2.9 trillion of debt.  The Committee estimates that interest on new debt may be $1.1 trillion by 2031.

Today, the yield on the ten-year Treasury note closed at 1.48%, according to data by Bloomberg, after getting as high as 1.50%.  It is unclear whether the increase in rates accounts for passage tax increases and social welfare spending contained in the “Build Back Better” plan.

The future economic impact from this plan appears to be flat over the next ten years.  A .98 percent reduction in economic growth over ten years is negligible.  So is a loss of 303,000 jobs.  In addition, Speaker Nancy Pelosi is signaling to the progressive wing of the Democratic Party that they may have to settle for a plan that falls short of $3.5 trillion.  If the bill fails in the House, not only is impact a moot concern, but the Democrats and Mr Biden will see a further drop in their political capital where their constituents see them as incapable of delivering on big ideas.

If the package fails, I can see some upside for Jerome Powell, current chairman of the Board of Governors of the Federal Reserve.  Mr Powell’s tenure as chair ends in February 2022.  A failed Biden economic passage brought on by a fractured party may mean that Mr Biden will have to take any opportunity to infuse confidence in the American economy.  So far, the Federal Reserve has been that one constant.  Mr Biden may have no choice, especially going into the mid-term election campaign season, but to re-appoint Mr Powell to another term as head of the Fed.

Alton Drew

27 September 2021