U.S. Sen. Charles E. Schumer told a Westchester business audience that creating jobs must be the focus of government and private-sector efforts to revive an economy that, after its near-crash and downward spiral a year ago, now “is just flat.”
“It”™s not going down any more, but it”™s still not going up,” Schumer told an audience of 200 persons at The Business Council of Westchester”™s Key Bank Speaker Series breakfast at Tappan Hill Mansion in Tarrytown. The national economy showed 5.6 percent growth in the fourth quarter of 2009, “but it”™s still not translating into jobs,” he said.
In Congress, Schumer said, he is trying to get the focus back on jobs and the economy after the recent passage of the health care reform bill. He noted the passage and President Barack Obama”™s recent signing of the so-called “payroll tax holiday” law ”“ the Hiring Incentives to Restore Employment Act (HIRE) ”“ that grants an exemption in 2010 on FICA payroll taxes for companies that hire a worker unemployed more than 60 days. Schumer said the hiring must result in a net increase in jobs at the business for an employer to qualify.
“It”™s immediate. It”™s simple. Third, it goes to any business,” Schumer said of the payroll tax holiday.
Still, “It”™s not a panacea,” he said. “If you”™re not getting orders, you”™re not going to hire a person even with the benefit.”
For credit-starved small businesses in New York, Schumer is pushing Credit for Success, a shared-lending program sponsored by the New York Business Development Corp. in Albany. Launched successfully in Ulster County, the program is being expanded to other regions of the state.
Schumer said the program brings together local banks ”“ seven banks have signed up for the program in the lower Hudson Valley region ”“ to create lending pools for companies that have been unable to get credit from a single bank.
Loans range from $25,000 to $150,000 and are guaranteed by the U.S. Small Business Administration for at least 85 percent of the balance. The New York Business Development Corp. makes lending decisions.
“It”™s sort of like a syndication for small businesses,” Schumer said. “It worked in Ulster County so we”™re now setting them up around the state.” The latest venture is a lending consortium of banks in Westchester, Putnam, Orange, Rockland and Sullivan counties.
At the federal level, Schumer said he hopes this month to produce bipartisan legislation that will make $30 billion in paid-back Troubled Asset Relief Program funds available for lending by banks to small businesses. The loans will not go on the balance sheets of banks, which will earn fees for processing. That credit boost for small businesses could translate into jobs, Schumer said.
The high and prolonged unemployment rate “is not just a statistic,” Schumer told his business audience. “It”™s a human tragedy.” Unlike previous recessions, unemployment has spread throughout the economy into the middle class and upper middle class, he said. And the average length of unemployment for a worker is seven to eight months, compared to three to four months in past recessions.  Â
“We have to focus on putting people to work,” he said.
Schumer sounded a note of optimism amid the economic gloom. “I believe for the first time we”™re seeing the glimmers of light at the end of the tunnel,” he said.
