Senators Max Baucus (D-Mont.) and Charles Grassley (R-Iowa), the chair and ranking member of the U.S. Senate Committee on Finance, released Feb. 11 the draft of an $85 billion jobs bill, which included an extension of the small-business provisions of the American Recovery and Reinvestment Act (ARRA). Specifically, it extended the 90 percent guarantee on 7(a) loans and the elimination of borrower fees on both 7(a) and 504 loans through 2010. Currently, these provisions are set to expire at the end of the February.

The Baucus/Grassley draft, however, was scuttled quickly—and unexpectedly—by Senate Majority Leader Harry Reid (D-Nevada), who instead introduced a scaled-back $15 billion jobs bill, which failed to extend the small-business stimulus provisions, and scrapped several tax provisions helpful to small business.

Reid’s decisions surprised even the Obama Administration, as moments before it was announced White House Press Secretary Robert Gibbs released a statement that read, “The draft bill released today by Baucus and Grassley includes several of the president's top priorities for job creation. [T]he president is hopeful that the draft language presented today will lead to a bipartisan Senate bill.”

While Gibbs since has stated that the president is “eager to sign” Reid’s pared down jobs bill, the White House publicly has supported both an extension of the small-business stimulus provisions and an increase in the maximum U.S. Small Business Administration (SBA) loan size, a fact reflected in their SBA FY11 Budget proposal.

Sens. Mary Landrieu (D-La.) and Olympia Snowe (R-Maine), the chair and ranking member of the Senate Committee on Small Business and Entrepreneurship, have been pushing for an extension of the small-business stimulus provision and an increase in the SBA’s loan limit.

Landrieu and Snowe introduced S. 2869, the Small Business Job Creation and Access to Capital Act—currently co-sponsored by sixteen of their colleagues—which would extend the small-business stimulus provisions through 2010. It also would increase the loan limit on 7(a) loans from $2 million to $5 million, on 504 loans from $1.5 million to $5.5 million, and microloans from $35,000 to $50,000. An identical bill—H.R. 4302, the Small Business Job Creation and Access to Capital Act—has been introduced in the House by Reps. Neil Abercrombie (D-Hawaii) and Nita Lowey (D-N.Y.).

Reid is believed to have scuttled the more ambitious “jobs” bill in an effort to blunt potential attacks that it was too bloated and infused with sweeteners. The Congressional Budget Office scored the SBA 7(a) and 504 provisions in S. 2869 at zero cost, however; and the small-business provisions are not sweeteners, they are critical steps the federal government can take to assist America’s struggling small firms.

As the White House and Congress repeatedly have pointed out over the last year, the small-business provisions in the stimulus played a significant role in lessening the dramatic FY09 decline in the SBA’s lending programs. According to the SBA, its average weekly dollar volume is more than 60 percent higher than it was in the weeks before the stimulus bill was enacted. The SBA also reports that its average number of loans approved per week has increased by more than 50 percent and that the $1.9 billion in loans it approved in September was its highest single-month total since August 2007.

While the White House and Senate Democrats repeatedly have claimed that additional jobs bills will be forthcoming, NSBA believes that it is paramount that the first jobs bill contain these key small-business provisions. Small-businesses are the source of job creation in the U.S. economy and the failure to include such productive, efficient, and needed small-business provisions in the Reid jobs bill is a dereliction.

The effects of this dereliction already are appearing. The SBA has begun finalizing plans to reinstate the Recovery Loan Queue, which means 7(a) applications must receive a valid SBA loan number on or before 11 pm ET, February 28, in order to be eligible for the higher guarantee. After that time, borrowers may choose to take a place in the Queue, in the hope that the increased guarantee eventually will be reinstated, or attempt to acquire a loan with the traditional guarantee.

Please take a few minutes NOW to urge your Senators to push for a more small-business focused “jobs” bill.