The Treasury’s Small Business Lending Fund closed last month after failing to use but a fraction of the $30 billion in capital approved by Congress.
To understand how hard it is for Washington to make a dent in today’s economy, look back at Treasury’s Small Business Lending Fund, a one-year experiment that closed its window last month after failing to use but a fraction of the $30 billion in capital approved by Congress.
Gene Sperling, now President Barack Obama’s top economic adviser, had championed the idea when he served in Treasury. Despite fierce Republican opposition, community bankers rallied to the “Main Street” agenda on a bipartisan basis. And like Lucy in Peanuts, Sen. Mary Landrieu (D-La.) turned the tide when she famously stood up to the Senate’s old-boy establishment and won a late-night 60-37 vote that saved the initiative in July 2010.
Yet just $4.03 billion made it out the door before the program shut down Sept. 27. Indeed, the first dollars weren’t approved until nine months after enactment and almost a full year after Landrieu’s stand. And two-thirds of the 933 applicants came away empty-handed, leaving scores of banks blindsided without time to appeal to Treasury.
For Obama, who likes to boast of running against a “do-nothing Congress,” this was a case of the president getting what he asked for and then fumbling the ball. At the same time, the administration can argue that it at least tried, and certainly, little supports the claims of Republicans, who fought the proposal tooth and nail, predicting billions in taxpayer losses and the second coming of bank bailouts.
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Source: David Rogers |POLITICO