David Kirkpatrick

November 27, 2009

That SBA stimulus cash loan program? Gone

Well, more correctly out of money.

From the link:

The stimulus cash that helped boost small business lending this year just ran out.

The Small Business Administration said Monday that it has run through all of the $375 million Congress allocated to temporarily waive fees and boost guarantees on loans backed by the SBA’s lending programs. Businesses still hoping for a slice of the pie can get in line, cross their fingers and wait.

November 18, 2009

The stimulus package and science

Scientific research wasn’t left out of this year’s stimulus plan to the tune of $21 billion, and a federal website tracks all that stimulus.

From the link:

The stimulus plan passed by the US Congress earlier this year provided $21 billion for scientific R&D to be allocated through the National Institutes of Health, the Department of Energy, and other agencies. (The full text of the bill is available in this large pdf file.) The debate still rages amongst politicians and economists about just how many jobs the $787 billion bill has created. In the meantime, the government has launched an interesting website detailing where that scientific R&D money went.

Call it propaganda–the site is called ScienceWorksForUS–but it’s interesting to browse through the detailed list and see which research projects were funded and for how much.

August 14, 2009

Here’s a handy bailout tracker …

from CNNMoney.

Want to see what’s happening with all that bailout money and what’s gone where with Troubled Asset Relief Program, Federal Reserve rescue efforts, Federal stimulus programs, FDIC bank takeovers and other financial and housing initiatives, plus the dollars handed over to Amerian International Group, take a few minutes and hit the link.

August 6, 2009

Small business capital gains tax cut coming

Throwing a little more relief Main Street’s way. The jury’s still out on Obama’s overall stimulus plan, but it’s good to see small business is getting some consideration and airtime from the president.

From the link:

President Obama said Aug. 5 that his goals for boosting the economy over the long term still include cutting the capital gains tax to zero for small businesses, and making the research and development tax credit permanent.

In a speech at recreational vehicle producer Monaco Coach in Wakarusa, Ind., Obama said the R&D credit returns $2 to the economy for every $1 the federal government spends and it deserves to be a part of the permanent tax code.

Cutting the capital gains tax to zero for small businesses and start-up firms would also benefit the economy over the long run because small businesses produce 13 times more patents per employee than large companies, he says.

Both ideas were included in President Obama’s budget proposal in March.

July 10, 2009

Debating the stimulus

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 5:14 pm

I have a feeling this is a discussion that will continue through the 2010 election cycle and maybe even into the 2012 presidential race if the economy remains soft for that long.

Many people don’t realize presidents pretty much live and die by economic cycles, and these cycles are almost entirely outside control by the White House. Just by polling it’s clear Obama has ownership of the current horrible economy and the immediate fire-brigade his administration was forced to put into action. It’s worth noting, to keep things in perspective if nothing else, he was handed a flaming bag of dog poop from one of the worst eight years of economic oversight, spending, saving and planning all coming from a Bush administration that was supposed to be fiscally conservative.

From the link:

And so, stimulus proponents argue, the only remaining actor with the capacity to boost total spending significantly is government. If government fails to act, they warn, the economy is likely to languish for years to come.

Stimulus opponents see things differently. In a recent Forbes column, UCLA economist Lee Ohanian attributed their skepticism to their belief that “the higher taxes on incomes or expenditures that ultimately accompany higher spending depress economic activity.” According to this argument, if the government borrows money to stimulate spending now, people will realize that the resulting debt will necessitate higher taxes in the future. And that realization will cause them to curtail their own current spending further, thereby offsetting the stimulus.

July 7, 2009

Get ready for another stimulus package

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 3:03 pm

Bush threw some federal money at the economic downturn and Obama added a large stimulus package. Even as the ink was drying on Obama’s stimulus it was assumed another round of federal money would be necessary and expected, unfortunately that fact did not get reported on all that much. It’ll be interesting to see how the general public reacts to a second stimulus to try and goose this recession.

From the link:

The United States should be planning for a possible second round of fiscal stimulus to further prop up the economy after the $787 billion rescue package launched in February, an adviser to President Barack Obama said.”We should be planning on a contingency basis for a second round of stimulus,” Laura D’Andrea Tyson, a member of the panel advising President Barack Obama on tackling the economic crisis. said on Tuesday.

Addressing a seminar in Singapore, Tyson said she felt the first round of stimulus aimed to prop up the economy had been slightly smaller than she would have liked and that a possible second round should be directed at infrastructure investment.

“The stimulus is performing close to expectations but not in timing,” Tyson said, referring to the slow pace at which the first round of stimulus had been spent on the economy.

Tyson, who is a dean of the Haas School of Business at University of California, Berkeley and was also a White House economic adviser to former President Bill Clinton, said an additional factor affecting the stimulus was that the economy was in a far worse shape than the administration had estimated.

June 16, 2009

The stimulus plan, COBRA and business

I’ve done recent blogging on COBRA and the stimulus plan, but the topic is still fairly confusing in terms of how the unemployed obtain the subsidy and how this program ties into existing ex-employer based COBRA health insurance.

The link in this graf doesn’t make things perfectly clear, but it does offer some interesting ideas on the corporate side in maximizing benefits for both the company and the recently laid-off worker.

From the link:

However, to the extent that an employer subsidizes all or a portion of COBRA benefits following a set of employee layoffs, the employer subsidy period also reduces the length of the federal subsidy period.

For example, assume an employer subsidizes COBRA coverage for three months following a layoff.

Under this scenario, the employee would only be eligible for six months of the federal COBRA subsidy rather than the full time allotted.

For the above reasons, I recommend that employers provide employees with additional severance benefits and eliminate their corporate subsidy for COBRA coverage.

This saves corporate resources, and employees may take maximum advantage of the federal COBRA subsidy.

As an alternative to eliminating their corporate COBRA subsidy, employers may elect to measure COBRA from the “loss of coverage” rather than the actual qualifying event.

April 23, 2009

The RNC crazy continues

Filed under: Politics — Tags: , , , — David Kirkpatrick @ 6:04 pm

I’m really speechless at this point. This is so unbelievably stupid there’s no where to even start. Combined with the “budget plan” tossed out there a few weeks ago, you’d have to think the RNC is full of less-than-clever fourth graders.

From the first link:

A conservative faction of the Republican National Committee is urging the GOP to take a harder line against both Democrats and wayward Republicans, drafting a resolution to rename the opposition the “Democrat Socialist Party” and moving to rebuke the three Republican senators who supported the stimulus package.

(Hat tip: the Daily Dish)

March 16, 2009

Obama helping small business

Good to hear. Main Street should be a focus of the stimulus/bailout. Either boost the entire economy or sit back and just let the markets sort themselves out.

From the link:

U.S. President Barack Obama will announce steps on Monday to make it easier for small business owners to borrow money, using $730 million in stimulus funds to cut lending fees, boost loan guarantees and expand other programs, officials said.

“We know that small businesses are the engine of growth in the economy,” said Christina Romer, chair of the White House Council of Economic Advisers. “We absolutely want to do things to help them.”

Romer, speaking on the NBC program “Meet the Press” on Sunday, said the government would pump “a significant amount” of money into encouraging small business lending but did not give a total figure.

Lawrence Summers, head of the White House National Economic Council, told ABC’s “This Week” the small businesses plan was part of the president’s overall effort to “put in place a program that addresses the crucial problems and permits (economic) stability to be regained.”

The Obama administration believes small businesses, which accounted for about 70 percent of new job growth over the past 10 years, will ultimately drive the recovery from the current recession, one of worst in decades, a U.S. official said.

The programs being announced on Monday build on the $730 million for small businesses included in the $787 billion economic stimulus package approved by Congress last month.

February 17, 2009

Taxpayers and the stimulus package

A press release from H&R Block:

Stimulus 2009: Something for Nearly Everyone
Marketwire via NewsEdge :


Millions of taxpayers will take home more money from the almost $790 billion American Recovery and Reinvestment Act expected to be signed into law early this week, but most provisions won’t happen automatically.

“The Recovery Act gives taxpayers money to spend, incentives to spend it and choices to spend it on,” said Amy McAnarney, executive director of The Tax Institute at H&R Block (NYSE: HRB). “There are provisions that pay you now and some that pay you later. But for most individuals, this isn’t a check-is-in-the-mail stimulus. Taxpayers will need to have guidance to maximize the benefit.”

H&R Block notes five key areas that impact individual taxpayers today and in the future:


--  Putting money in taxpayers' pockets now
--  Helping more of those who have less
--  Making homeownership more affordable
--  Increasing access to higher education
--  Getting green from the garage


Review chart with the breakdown of taxpayer benefits.

“Taxpayers want to know how this Recovery Act affects them so they can get all the credits and deductions they’re due,” McAnarney said. “The Tax Institute recommends consulting with a trusted tax professional to help decipher the complex changes and what they mean to each individual.”

Review complete Recovery Act FAQ.

Putting money in taxpayers’ pockets now

The bill includes several provisions that immediately boost the wallets of workers, non-workers, the unemployed and retirees. For both 2009 and 2010, the Making Work Pay tax cut means up to $400 for individuals and $800 for couples through a reduction in income tax withholding; in other words, bigger paychecks. Eligible workers may need to work with their employers to ensure any adjusted income tax withholding is appropriate for their situation. For example, if all working taxpayers are automatically transferred to the new reduced withholding amounts, certain taxpayers may actually owe more taxes when they file their 2009 and 2010 returns.

“Knowing your tax situation is extremely important in instances like this,” said McAnarney. “How and when this credit is actually going to be administered is still unclear.”

Eligible self-employed taxpayers can adjust their quarterly estimated payments. For those taxpayers who do not receive the full amount this year, they will receive the remaining as a credit on next year’s tax return.

Social Security and SSI recipients, retired and disabled veterans, and railroad retirees will get a one-time payment of $250. The Social Security Administration and Veterans Administration will provide the information about who qualifies for this payment, so eligible individuals won’t have to do anything. Individuals on a federal or state retirement program who don’t receive Social Security benefits can claim a $250 credit when they file their 2009 tax returns.

“However, there’s no double-dipping,” said McAnarney. “Taxpayers who qualify for both the Making Work Pay Credit and the $250 payment can’t get the full amount of both benefits.” In these cases, the Making Work Pay Credit will be reduced by $250.

The Act has several benefits for the unemployed. Many will receive a $25 weekly boost to their unemployment check. In addition, the first $2,400 in benefits will be exempt from federal tax in 2009. Eligible unemployed workers paying for COBRA will benefit from a 65 percent federal subsidy for their monthly insurance premiums.

Helping more of those who have less

The Recovery Act expands the Child Tax Credit, allowing families to begin qualifying for the credit with every dollar earned over $3,000. For taxpayers, this change translates into a refundable credit of up to $1,000 for each qualifying child under 17. Refundable credits give taxpayers a real boost because if the person has no tax liability, the credit is issued in the form of a refund.

This is the second year in a row the income threshold has been lowered. For 2008, it was lowered to $8,500 from $11,750.

The Act also increases the Earned Income Credit for families with three or more children, where previously EIC benefits were capped at two children. The Act would also increase the beginning point of the phaseout range for all married couples filing a joint return. That’s good news for married couples regardless of the number of children they have.

Making homeownership more affordable

Taxpayers on the fence about buying their first home may want to consider the Act’s $8,000 tax credit.

Unlike the incentive passed last year, first-time homebuyers will not have to repay the credit as long as they live in the house for three years. To qualify, eligible homebuyers must make their purchase between Jan. 1, 2009, through Nov. 30, 2009. Taxpayers who have purchased a home this year can take advantage of this credit on their 2008 return. For those who have already filed, filing an amendment is the best way to capture this full credit on their 2008 tax return.

The plan also includes tax credits for energy-efficient improvements such as qualified new furnaces, windows and doors to existing homes. The credit applies to 2009 and 2010 tax returns, with a lifetime cap of $1,500.

Increasing access to higher education

More taxpayers will be able to qualify for the American Opportunity Tax Credit, which will provide a new, partly refundable $2,500 tax credit for college tuition in 2009 and 2010. By making the credit partially refundable, nearly 4 million low-income students now will be able to qualify for the credit. This can be a better alternative for taxpayers than the two existing higher education credits.

Also, computer and computer technology costs will now qualify in 2009 and 2010 under the Section 529 Education Plans, which are tax-exempt college saving plans. Previously, eligible expenses included only tuition, room and board, and books, supplies and equipment that were required for attendance at the school.

Getting green from the garage

The package allows taxpayers to deduct the state and local sales and excise taxes paid on the purchase of new cars, light trucks, recreational vehicles and motorcycles. The vehicles must be purchased from the enactment date of the Act through the end of the year.

The Act also provides a tax credit of up to $7,500 for families who purchase plug-in hybrid vehicles purchased after 2009 or plug-in conversion after date of enactment and before 2012. Even those taxpayers who don’t itemize can benefit from this.

H&R Block will provide ongoing information about the Recovery Act on www.digits.hrblock.com.

The Tax Institute, a division of H&R Block, is a national leader in providing unbiased research, analysis and interpretation of federal and state tax laws. Staffed by Enrolled Agents, CPAs, and Attorneys, The Tax Institute provides industry expertise for matters related to taxes and the professional tax preparation industry.

About H&R Block

H&R Block Inc. (NYSE: HRB) is the world’s preeminent tax services provider, having served more than 400 million clients since 1955 and generating annual revenues of $4.1 billion in fiscal year 2008. H&R Block provides income tax return preparation and related services and products via a nationwide network of approximately 13,000 company-owned and franchised offices and through TaxCut® online and software solutions. The company also provides business services through RSM McGladrey. For more information visit our Online Press Center at www.hrblock.com.

February 11, 2009

Text of Geithner’s remarks

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 1:31 pm

If you’re interested in the text of Tim Geithner’s remarks on stimulus part two yesterday, here you go:

Treasury Secretary Tim Geithner announced the government’s plan to revitalize the financial sector. Here are his prepared remarks, as released by the Treasury.

As President Obama said in his inaugural address, our economic strength is derived from “the doers, the makers of things.”

The innovators who create and expand enterprises; the workers who provide life to companies; this is what drives economic growth.

The financial system is central to this process. Banks and the credit markets transform the earnings and savings of American workers into the loans that finance a first home, a new car or a college education. And this system provides the capital and credit necessary to build a company around a new idea.

Without credit, economies cannot grow at their potential, and right now, critical parts of our financial system are damaged. The credit markets that are essential for small businesses and consumers are not working. Borrowing costs have risen sharply for state and local governments, for students trying to pay for college, and for businesses large and small. Many banks are reducing lending, and across the country they are tightening the terms of loans. (more…)

February 10, 2009

Stimulus shuts out small business

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 2:52 pm

A release from yesterday:

Stimulus Bill Ignores Firms That Create Ninety-Seven Percent of New Jobs
PR Newswire via NewsEdge :  PETALUMA, Calif., Feb. 9 /PRNewswire-USNewswire/ —According to the latest United States Census Bureau statistics, businesses with fewer than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of all new jobs. The Small Business Administration (SBA) Office of Advocacy released a report on the Census Bureau findings. (http://www.inc.com/news/articles/200708/data.html)CNNMoney.com and Inc.com released stories on the SBA report. (http://money.cnn.com/2008/07/30/smallbusiness/job_creation.fsb/index.htm)

Since 2003, a series of more than 15 federal investigations have uncovered that the Bush Administration allowed billions of dollars in federal contracts earmarked for small businesses to be diverted to Fortune 500 firms and thousands of clearly large businesses around the world. (http://www.asbl.com/documentlibrary.html)

Neither the House, nor Senate versions of the economic stimulus package contain any provisions to address the diversion of federal small business contracts to Fortune 500 firms. Additionally, the bills fall short of addressing the needs of America’s top job creators.

Hundreds of stories chronicling the diversion of federal small business contracts to corporate giants have been released by virtually every major newspaper in the country. (http://www.asbl.com/news.php) Major television networks like CBS, ABC, FOX and CNN have covered the story.

(ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; FOX, http://www.youtube.com/watch?v=8y2F8zl2ebs; CNN, http://www.asbl.com/showmedia.php?id=1170)

In 2005, the SBA Office of Inspector General released Report 5-15, which described the diversion of federal small business contracts to Fortune 500 firms as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” (http://www.sba.gov/IG/05-15.pdf)

In February 2008, President Obama released the following statement, “Small businesses are the backbone of our nation’s economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.” (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php) To date, he has not proposed even a single policy to make good on his campaign promise.

Based on information obtained through a series of successful Freedom of Information Act (FOIA) lawsuits against the Bush Administration, the American Small Business League (ASBL) estimates that every year up to $100 billion in federal contracts earmarked for America’s top job creators are diverted to corporate giants in the defense industry.

On December 6, President Obama’s transition team estimated that every billion dollars spent on federal infrastructure projects would create 40,000 jobs. (http://www.nytimes.com/2008/12/07/us/politics/07radio.html)

The ASBL estimates that a provision in the stimulus bill that would end the diversion of federal small business contracts to corporate giants could create up to 4 million new jobs.

The powerful lobby for the defense industry has successfully blocked any attempts at legislation to stop the flow of billions of dollars in government small business contracts to many of the largest defense contractors in the country.

SOURCE American Small Business League

<<PR Newswire — 02/10/09>>

February 4, 2009

Stimulus to include tax break for auto loans

This should make the beleaguered Rust Belt a little happier. And consumers with car payments

From the link:

Thanks, Uncle Stimulus!

The economic stimulus bill just got a whole lot more interesting for automakers and car buyers alike, as a proposal to make interest on auto loans deductible has been voted in. The proposal, which was championed by the National Automotive Dealer Association, was voted in by a bi-partisan 71-36 vote. If the $800 billion stimulus bill passes the Senate and this provision survives, car buyers will be able to write off auto loan interest on their taxes, saving about $1,500 on a $25,000 car purchase. The new legislation will mark the first time since 1986 that car buyers will be able to write off their car loan interest.

January 29, 2009

Stimulus package throws first-time home buyers a bone

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 5:41 pm

A pretty good bone at that.

From the link:

If you’re thinking of buying a home, there could be a big bonus for you in the economic stimulus bill that’s now before Congress.

Among its many provisions is a $7,500 tax credit for first time home buyers. The House passed the $819 billion stimulus plan, including this tax credit, in a vote late Wednesday. The Senate may vote on its version of the bill some time next week.

Technically, the stimulus bill is actually changing the terms of the $7,500 tax credit that was issued as a part of the Housing Recovery Act, which Congress passed last summer. That legislation required that the tax credit be repaid over 15 years, making it more of a no-interest loan. Not surprisingly, the measure had little impact on the market. The stimulus bill now under consideration would make that tax credit a true credit that doesn’t need to be repaid.

January 19, 2009

House stimulus plan looks good from Governor’s mansion

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 5:01 pm

I’m not even going to speculate on how good, or bad, an idea the current stimulus plan might be. At this point ideas are a waste of time — something is coming, it’s going to be big and it’ll be totally driven by the Democratic Party.

It is probably a good sign that the states are given a little support. That was one area of the current financial crisis that could’ve become ugly.

From the link:

State officials got their first look of the massive economic package worth $825 billion that Congress promises to deliver next month to President-elect Barack Obama, and many liked what they saw.
House Democrats Jan. 15 released details of their version of a plancontaining $550 billion in spending and $275 billion in tax cuts that they say will help pull the country out of a financial freefall compared by some experts to the Great Depression.
Crucial to states, the two-year package includes $87 billion to help pay for Medicaid, the joint federal-state program that costs $330 billion annually and serves 59 million needy Americans, and at least $100 billion for infrastructure spending — two top priorities of many governors and state legislators.
“Obviously they heeded our concerns,” said Michael Bird, the National Conference of State Legislatures lobbyist in Washington, D.C. He said the package includes “ample funds to create jobs; help the most disadvantaged get through the recession and perhaps ease some of the really tough budget decisions that state legislatures are facing.”
In a surprise to some, the proposed package also contains $79 billion aimed to prevent states from cutting into schools and college funding and another $41 billion to local school districts. While states and localities were asking for help on the education front, the levels were much higher than many had expected.

January 6, 2009

Total bailout cost heading toward $8T

Yep, you read that right — eight trillion dollars. Corporate socialism to the tune of eight trillion dollars. Obama’s plan looks to be in the $700 billion range.

The system, the markets and capitalism have failed on a massive scale. This might simply be a correction in the markets — a correction we are circumventing with this massive bailout — but it’s hard not to place at least some blame at the feet of the economic policies (and lack thereof) of the Bush 43 regime.

There’s a reason Congress feels the need to look into the incompetence of the SEC of the last several years. Instead of competent smaller government, Bush seems to have pressed for bloated government at every step (Department of Homeland Security, anyone) and increasing incompetence across the board with each stride.

With the ongoing financial crisis and this bailout, it really feels like Main Street is full of flaming bags of shit and the taxpayers are being forced to start stomping.

From the first link way up there in the first graf:

Sitting down? It’s time to tally up the federal government’s bailout tab.

There was $29 billion for Bear Stearns, $345 billion for Citigroup. The Federal Reserve put up $600 billion to guarantee money market deposits and has aggressively driven down interest rates to essentially zero.

The list goes on and on. All told, Congress, the Treasury Department, the Federal Reserve and other agencies have taken dozens of steps to prop up the economy.

Total price tag so far: $7.2 trillion in investment and loans. That puts a lot of taxpayer money at risk. Now comes President-elect Barack Obama’s economic stimulus plan, some details of which were made public on Monday. The tally is getting awfully close to $8 trillion.

Obama’s plan would combine tax cuts with infrastructure job creation efforts. Economists say it could serve as an integral piece to the government’s remaining economic recovery puzzle.

“This plan will be the first direct tool to make additions to disposable income,” said Lyle Gramley, an economist with Stanford Group and former Fed governor. “None of the other efforts have done that directly.”