[Congressional Record Volume 147, Number 156 (Tuesday, November 13, 2001)]
[Senate]
[Pages S11714-S11715]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       THE ECONOMIC RECOVERY BILL

  Mr. BAUCUS. Madam President, I would like to speak a little about the 
stimulus economic recovery bill that is now pending, particularly from 
the point of view of what the provisions are that affect small 
business.
  In the aftermath of September 11, it became clear that our economy 
generally was going to suffer. I remember reading an article. It was 
kind of stunning in a certain aspect; that is, if the terrorists were 
aiming the planes at the ``masters of the universe''--New York bond 
traders, and so forth--it did wreak tremendous devastation and tragedy 
for so many people who do trade in securities, but to an even greater 
degree it has affected the economic livelihood of small businesses, 
shop owners, different communities in the city of New York. It is 
middle-income and lower-income people, who live in New York and across 
the country, who are hurt the most, who are hurt more than higher 
income people.
  The loss of life is beyond description. But, in addition, the 
economic devastation has hit small business more than it has hit big 
business. And small businesspeople have a much harder time adjusting 
than do big businesses. So for that reason, because we have limited 
resources, we want to make sure we have a balanced solution that very 
much helps small business.

  When the President spoke about an economic stimulus, he made three 
basic points. One, he wanted us to stimulate the economy. He suggested 
that it be short-term. He also suggested that any stimulus not have 
adverse long-term consequences on future budgets. These are principles 
with which we all agree.
  Let me speak now about small business. We say this many times, and I 
think it is very important to say it again. Small business really is 
the backbone of America. More new jobs are created by small business 
than by big business. That is a fact. We tend to forget that. We read 
reports that such-and-such company is laying off so many people and 
another company is laying off another thousand people, or several 
thousand people. We hear that, and those are big companies that have 
lots of employees, and unfortunately they are laying off relatively 
large numbers. We don't hear a word about the mom-and-pop businesses in 
our communities that had to lay off a few people. It is happening all 
over the country. The numbers are so great. They are also the same 
businesses that create more jobs. They create more jobs than does big 
business.
  Small business is also the genesis and the fountain of more business 
ideas. More business ideas are developed by small business than by big 
business. There is probably a reason for that. A small business has to 
fight to survive; the margins are so low. If you are opening up a small 
business, you have to pay that payroll tax the first day, even though 
you don't have any income. It is very tough. Lots of people have new 
ideas and they want to start a business. That is the American way.
  It is critically important that we not lose sight of small business. 
In fact, I think we should help small business because in many ways it 
is the bedrock of our country. Here is what we have done. Let's look at 
some of the provisions of the bill. One is to increase the amount a 
business can expense. It is called section 179 of the Tax Code. That 
section allows businesses to expense rather than depreciate assets, 
right now, this year, instead of writing it off over a period of time. 
We increase the limit. By increasing that limit, small business can 
write off more and invest more than they otherwise could.
  Section 179 of the code provides an exception to the normal 
depreciation rule. That is the limit that a small business can expense. 
It allows up to $24,000 in business purchases to be deducted in the 
year of purchase. The amount is reduced once a business makes $200,000 
worth of purchases in a given year. That is not a lot of money, but 
that is the limit. We want to allow businesses to deduct more so they 
purchase more products upfront.
  Increasing the amount that can be expensed is the simplest way to 
stimulate small business to try to expansion. It helps small business 
keep up with rapid growth and change in the technology sector by 
reducing the capital costs of the company.
  The bill reported by the Finance Committee includes a provision that 
increases the amount a business can expense from $24,000 to $35,000 
over a 12-month period. This also raises the maximum amount of 
qualified purchases from $200,000 to $325,000. This provision provides 
an immediate and focused stimulus. It is only available to companies 
purchasing equipment, and only if they make the purchases within a 12-
month period. I might say that this is a bipartisan provision.
  There are a lot of bipartisan provisions in this bill. We hear 
sometimes about the partisan provisions, but much more in this bill is 
more bipartisan than not. One is the rebate checks. Both sides agree to 
that. Both sides agree to the small business 179 expensing limit being 
raised. Both sides agree to bonus depreciation; it is just a question 
of how much. Both sides agree to extending unemployment compensation 
benefits; it is just a question of how much. Both sides agree that we 
should probably help the people who have lost their health insurance 
because they have lost their jobs.

  Over the last year, more than half of the people who have lost their 
jobs as a consequence have also lost their health insurance. That is 
because most people who are laid off had health benefits as part of the 
job, but they don't anymore.
  So this expensing is one of the other bipartisan provisions.
  A couple of statistics about small business. In 1996, there were 
about 5 million corporations, partnerships, and sole proprietorships 
that had potential 179 investments. Of those 5 million, about 96 
percent had gross receipts of $5 million or below. We are talking small 
business, not big business. Expanding the amount of investments these 
companies can make and expense immediately would give these small 
businesses real incentive to invest and give the economy a needed lift. 
In Lower Manhattan alone, there are between 14,000 and 16,000 
businesses directly affected by the collapse of the Trade Towers. That 
is according to the Empire State Development Corporation. I daresay 
there are many more indirectly affected. It is estimated that as many 
as 105,000 businesses may ultimately be impacted directly or indirectly 
in New York as a consequence of the disaster of September 11. Those 
businesses need to bounce back, and this provision, along with other 
specific provisions in the bill, will go a long way to provide that 
assistance.
  I might say that the 179 provision, where businesses can expense 
more, is not only targeted to New York, but to the whole country, 
because this economic downturn we are experiencing really began about a 
year or so ago, and it was accelerated by September 11; but the whole 
country has experienced an economic downturn. That is why this 
provision will help New York and also the rest of the country.
  Madam President, I also believe that tomorrow morning, in the spirit 
of bipartisanship, we are finally going to sit down and work out an 
agreement on the stimulus/economic recovery bill. I

[[Page S11715]]

think the leadership on both sides of the aisle is going to meet with 
senior tax-writing Senators and House Members and we are going to say: 
We have had our say, and each party scored its points. Now let's get on 
to business and do what the American people want--that is, write an 
economic recovery bill on a bipartisan basis as quickly as possible and 
help get this country moving.
  As the President said recently, in reference to a fellow who helped 
prevent an airplane disaster in Pennsylvania when he said, ``Let's 
roll,'' I say to all my friends and colleagues that I very much hope 
tomorrow, when we have this meeting, we start to roll and put together 
a bipartisan bill. This section 179 small business expensing provision 
is one of many which I know we are going to agree to in helping our 
economy.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BAUCUS. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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