The Obama administration has introduced — belatedly, many would say — proposals aimed at job creation with a heavy emphasis where it belongs: on small businesses as the engine of economic recovery.

“That was a speech he should have given a year ago,” said state Rep. Angus McKelvey, the Maui lawmaker whose House economic development committee will be contemplating various ways of helping the small-business sector kick-start the process of job creation.
It’s all the more reason that every urgency must be placed on initiatives that will be percolating up at the state Capitol as well as in Washington, D.C.
Obama favors recasting at least some of the unused Troubled Assets Relief Program funds as financing for Main Street. In one variation of the broad proposal, executive-pay restrictions and other TARP rules would be lifted for banks receiving the funds in the new program, provided the money goes toward small-business loans.
Dedicating at least some leftover TARP funds toward providing capital to businesses on the brink of hiring would be a responsible use. There’s a clear imperative to ease off a 10 percent unemployment rate, and jobs programs cost money.
But Obama insists that deficit reduction is another target for unused funds, and it should be. New efforts to kick-start hiring as much as possible should be financed with savings from existing programs, and the national debt does need to be trimmed.
In Hawaiçi, where budgets must be balanced, the challenge is even greater. State Senate President Colleen Hanabusa and House Speaker Calvin Say agreed that tax credits for hiring are being considered. But, Hanabusa said, the state tax department is calculating what each would cost the state in revenues because funding is going to be so tight.
Some of the business incentives will need to be financed through other savings or through bonds, Say added, and he’s right.
The Legislature also has tapped a task force of 17 leaders in business and banking to propose the most efficient ways of getting a jobs boost from construction projects, believed to be the most immediate way to put many people back to work.
And McKelvey is hoping to broaden a law that lets businesses retain workers on reduced hours by tapping unemployment benefits to partly replace the lost wages. That could keep more in the work force, but the state’s unemployment insurance fund already is nearly exhausted. To replenish the fund, lawmakers favor phasing in higher unemployment tax on businesses — far better than the alternative, which would raise the tax by up to 1,000 percent.
Nationally, Obama has made other worthy proposals, though details need to be fleshed out. They include tax incentives for small firms that make new hires and other tax breaks for those purchasing new plants or equipment. Entrepreneurs are desperately needed, and the on-ramp must be made more accessible.
Among other ideas: eliminating the capital gains tax for investors who buy stock in small firms and hold it for at least five years. This may help companies raise the venture capital they need to innovate — and hire.
Additional boosts for construction — up to $50 billion in federal infrastructure funds — is being contemplated, as well as rebates for energy-efficiency improvements for homes. Given the sluggish pace of the stimulus funds already in play, government needs to ensure that delays are kept to a minimum.
Public-sector investment can help the economy weather a crisis, but it’s a more stable business environment that’s needed now. The best agent for ensuring that economic recovery is healthy rather than halting is the network of small businesses that can respond more nimbly to fill a niche — once they’re given a more predictable basis for growth. It’s up to the leaders of state and federal governments to help them find their footing.