Why Georgia’s Senate Runoff Vote Might Be a Win for Small Enterprise
The prospect of a double victory in the Georgian Senate runoff elections is the clearest sign yet that President-elect Joe Biden’s comprehensive agenda, which includes a massive plan for green infrastructure, another aid package for Covid-19, and an increase in the federal minimum wage on $ 15 will get serious consideration on Capitol Hill.
Democrats took at least one seat after Rev. Raphael Warnock defeated incumbent Senator Kelly Loeffler by about 2 percentage points. Democratic challenger Jon Ossoff is likely to prevail in his race against Georgia’s other incumbent Senator David Perdue.
“The Georgia election results breathe new life into President-elect Biden’s agenda,” said Karen Kerrigan, president of the Small Business & Entrepreneurship Council, a non-partisan advocacy group in Vienna, Virginia. As such, she adds that Americans can likely expect another round of incentives, with additional support for small businesses.
The timing is good. According to Ray Greenhill, president and founder of Oxxford Information Technology, an information services company in Hagaman, NY that tracks around 32 million businesses, around four million – mostly small – American companies are expected to close for good in 2020. By the third quarter of 2020, around 3.4 million small businesses had closed.
While Congress recently launched a new $ 900 billion Covid-19 aid package, the $ 284 billion for the Paycheck Protection Program (PPP), a forgivable credit program that targets small businesses in trouble, and millions more in tax incentives and fewer restrictions on submitting award procedures. Measures are largely viewed as a band-aid for businesses.
“PPP is a good program if the disruption is going to last two or three months,” said John Lettieri, CEO of the Economic Innovation Group, a research group in Washington, DC. “It’s a total mismatch between a year and a long crisis – especially when [it concerns] small businesses. You don’t think about things in weekly steps; You have to make decisions that are beyond the horizon of relief. “He suggests that a more suitable program would include longer repayment terms, lower interest rates, and flexible uses.
A future stimulus package would provide support to state and local governments that was not included in the recent bill. It would also likely include additional unemployment benefits, recently extended to March 14th. And some Americans might expect additional payments for economic repercussions as well – that is, those $ 2,000 checks might actually be in the future, which could boost consumer spending.
Kerrigan adds that she expects another round of economic activity to provide greater support to minorities, women-owned businesses and very small businesses that have missed out on loan programs.
In addition to additional incentives, Biden’s agenda includes a high, job-creating plan for environmentally friendly infrastructure worth $ 2 trillion, which is intended to create an emission-free energy sector by 2035. He also wants to weather millions of houses and modernize four million buildings to increase energy efficiency. The plan also provides for major cities to shift more towards public transport – although the pandemic has put a heavy strain on demand.
He is also expected to push for a gradual increase in the federal minimum wage from its current $ 7.25 to $ 15 an hour, even though many states are already well above the federal minimum. Changes to the US healthcare system could also be in sight. Biden has proposed lowering prescription drug prices and raising the Medicare Eligibility Age from 65 to 60. He also proposed a government-administered insurance program or “public option” to compete with private insurers. The public option would be offered with no rewards to Americans living in states that do not have access to Medicaid services.
In particular, Biden also advocates withdrawing several key aspects of Trump’s greatest legislative effort – the Tax Cut and Employment Act (TCJA) of 2017. It would raise the corporate tax rate from 21 percent to 28 percent. Before the TCJA, the highest corporate tax rate was 35 percent; However, the effective rate in 2019 was 24.6 percent. Garrett Watson, an analyst with the Tax Foundation, notes that the tax rate may be higher when you factor in taxes on dividends and capital gains. And Biden plans to increase the highest individual income tax rate from 37 percent to 39.6 percent for those with incomes over $ 400,000. This could have a direct impact on pass-through businesses such as limited companies and S Corps.
Biden also discussed the introduction of a 10 percent “Made in America” tax credit for activities to restore US manufacturing and revitalize existing or closed facilities – anything that adds manufacturing jobs. The move would serve as a counterpoint to a new 10 percent surcharge for companies that outsource offshore manufacturing and service contracts to overseas nations that serve American consumers.
Biden’s path will not be without bumps. The Senate Democratic majority will be tight, with a 50/50 split and Vice President Kamal Harris as the tiebreaker. To overcome a filibuster, the Democrats would need 60 votes – instead of a simple majority of 51 – but they would ensure a more moderate agenda as the Democrats may have to win over the Republicans to get much of anything.
It can be helpful to remember that when Barack Obama took office in 2008, the Democrats controlled both the House and the Senate. And he had a filibuster-safe 60-vote majority in the Senate, Ronil Hira, Associate Professor of Political Science at Howard University. “Even back then, he had difficulties getting things done,” says Hira. Obama’s stimulus bill – the American Recovery and Reinvestment Act of 2009 – was less than many liberals sought. Hira also notes that “The Affordable Care Act dropped the public option and immigration reform was left out in the cold”.
In addition, the democratic leadership of the House has decreased in the 2020 elections, which also makes the passage of bills in this chamber more cumbersome.
Yet the Senate minority is less powerful than it used to be. For example, the filibuster no longer applies to judicial nominations. And it doesn’t apply to “reconciliation” or budget calculations.
“That means any expense or tax problem can get through,” said Robert Litan, an economist and non-resident senior fellow at the Brookings Institution, an impartial think tank in Washington. “In order to [expect a] “Yes” to climate infrastructure and a number of his other spending proposals and perhaps to a large part of his tax agenda. “