Obama accurate in forecast of shutdown effects?

From msnbc.com's Tom Curry:
Warning of the effects of a partial federal government shutdown President Obama said Wednesday that it “means that small business owners who are counting on that loan to open their business, to make payroll, to expand, suddenly they can't do it.”

Was he correct?

The federal Small Business Administration said that in the event of shutdown there will be no new approvals of some types of SBA loan applications.

SBA estimates that each week the agency is shut down would mean more than $400 million in capital that will not be going to small businesses through SBA-supported lending. This would work out to over 1,000 small businesses a week not getting loans.

Some types of SBA loans will continue to be processed, such as Disaster Assistance loans for homeowners, renters and businesses.

According to the American Bankers Association, less than 10 percent of small business loans are backed by the SBA.

According to ABA spokeswoman Carol Kaplan, “Since less than 10 percent of commercial loans are SBA-backed, the overall impact of a shutdown would be minimal. However, a shutdown would mean that SBA loans currently in the pipeline -- which normally take weeks to process -- would be held up even longer. For a company that is relying on an SBA-backed loan, the delay could have a serious impact.”

Small businesses are defined by the SBA as those having fewer than 500 employees. They represent 99.9 percent of the nation’s businesses.

According to a study by the National Federation of Independent Businesses, about 5 percent of small businesses participate in SBA finance related programs. 

So, said NFIB spokeswoman Cynthia Magnuson, the group does not agree with Obama’s assessment, since a government shutdown “would not impact the vast majority of small-business owners. Moreover, we’re not hearing from our members that they are at all worried about SBA funding. Our members are more concerned that Washington gets its spending under control and reaches a sustainable budget solution that protects small businesses from economic uncertainty.”

(NFIB’s political action committee gives mostly to Republican candidates.)

When Obama referred to small business owners relying on loans to make their payroll, he might have been compressing the time frame.

It takes weeks for the loans to be processed -- so an owner wouldn’t get his loan in time to make next week’s payroll. And a small firm facing urgent payroll demands might not qualify for a loan to begin with.

Obama also warned of the impact of a shutdown on home mortgage lending, saying a shutdown “means folks who are potentially processing a mortgage, they may not be able to get it.”

Melanie Roussell, a spokeswoman for the Department of Housing and Urban Development, said that during a government shutdown, the Federal Housing Administration staff will not be on duty to underwrite or approve any new loans.

In 2010 FHA insurance was provided for 40 percent of the purchase market and 9 percent of the house refinance market. Last year, 80 percent of all FHA-backed loans were for first-time homebuyers. “In the recent market, where private capital has not been available, FHA has stepped in. FHA serves a much larger share of the market than we have in previous years,” Roussell said. Since the last federal government shutdown in 1995-1996, FHA market share has more than doubled, she said.

Discuss this post

Oh comeon now Obama.

Government is the freind of small business? Really, that's what you've got?

Oh My, he is one funny dude.

  • 10 votes
Reply#1 - Thu Apr 7, 2011 5:33 PM EDT

With ardvarks and puppet protests on the capital steps, Reid sobbing over cowboy poetry ....... I was half expecting him to say poor Yogi and Boo-boo would have to go hungry because with Jellystone closed - their would be no picnic baskets to steal.

But on a more serious note, any small business that trusts and counts on the Obama administration for anything is doomed anyway...... With that kind of judgement, they will never make it.

  • 8 votes
#1.1 - Thu Apr 7, 2011 5:56 PM EDT

I read this article, and laughed. Obama talks a great game, plays a poor game before changing the rules for the protection of his image. Come on Obama, don't mis-speak, be factual in your discussion.

@Bob, perhaps if BooBoo and Yogi go hungry from the park closing, the rocks can improve from the man-made polution caused by car emissions of the tourists.

@Spanky,

Of course Obama is a friend of business - it is nearing election time!

  • 4 votes
#1.2 - Thu Apr 7, 2011 6:28 PM EDT

Spanky - Am still waiting for you to answer my question. How many federal benefits do you receive ?

  • 1 vote
#1.3 - Thu Apr 7, 2011 7:41 PM EDT

What's the matter Ct - can't you read? I fully responded to you last time. Ok, let's try this again:

the answer, as I indicated yesterday, is 0. How about you? You sucking at the tit?

I'm Just a small business owner. Althoughgh if the monkeys shut it down they will not be getting my final tax payment for last year, or my estimated payment for the first quarter of this year.

How about you CT you making your first quarter estimated payment also? Self employed or wage slave?

  • 3 votes
#1.4 - Thu Apr 7, 2011 7:54 PM EDT
Reply

Last nights news described some potential areas of closures, not one of them would relate to providing harm to the average taxpayer. Regardless, how many federal government functions are fast in respondining to paperwork?

  • 4 votes
Reply#2 - Thu Apr 7, 2011 5:44 PM EDT

Only 30% of the government will be shut down; things like National Parks and the Forest Service. 70% of the government is exempted from furlough as being "essential". My guess is that those folks kicked out of hotels in Parks Saturday morning will be slamming their congressmen with phone calls.

  • 4 votes
#2.1 - Thu Apr 7, 2011 6:57 PM EDT
Reply

Maybe some of the other small business owners here at First Read could weigh in.

Any of you all think the shut down will effect your business?

Here I'll go first: HELL NO!

  • 6 votes
Reply#3 - Thu Apr 7, 2011 5:47 PM EDT

Yes, of course. I know all kinds of small business owners that spend their time surfing the web and making commentts during their business day.

  • 3 votes
#3.1 - Thu Apr 7, 2011 7:24 PM EDT

They must be really good at what they do, right?

Ward, don't make me come down hard on the Beaver tonight. :)

So how about it Ward, what type of business do you own? I assume you re speaking from experience?

  • 4 votes
#3.2 - Thu Apr 7, 2011 7:57 PM EDT
Reply

The President was absolutely correct. Small Business is just getting on its feet after the awful Republican debulce of a "Near Depression" The American People are hanging on by a thread, many still unemployed, now the the Republican Promise of Jobs proved to be a Lie. Our economy doesn't need any adverse activity for the people or our government. Republicans don't understand that because to them it's all about Power, The Rich, Greed, Replacing Government with the Private Sector to demean jobs, lower wages, getting paid by their donors and getting the next donation for re-election and We the People pay their more than $176,000+ Paychecks while they Stick It To The American people.

  • 7 votes
Reply#4 - Thu Apr 7, 2011 5:50 PM EDT

now the the Republican Promise of Jobs proved to be a Lie

Bull paddy. Unemployment has come down. What has Obama other than to extend the tax cuts? Companies weren't going to hire until the gays got DADT repealed? They were too worried about investing until START got signed? The Tuscon Speech dropped unemployment?

If you would have read the article (or anything in WSJ, IBD.....) it is about uncertainity caused by Obama.

So, said NFIB spokeswoman Cynthia Magnuson, the group does not agree with Obama’s assessment, since a government shutdown “would not impact the vast majority of small-business owners. Moreover, we’re not hearing from our members that they are at all worried about SBA funding. Our members are more concerned that Washington gets its spending under control and reaches a sustainable budget solution that protects small businesses from economic uncertainty.

That simple June - it's not rocket science (or rocket surgery for Bev, Louis and Feisty).

And besides, do you really think business cares about Planned Parenthood / abortion? Nope. But it does care about an administration borrowing money to pay for abortions. Do you think business cares about NPR? Nope. But it does care about an administration borrowing money to support puppets and cowboy poetry. Insane when our economy is in this shape. Business has to make it on its own - these liberal government welfare babies can make it on their own too.

For Obama to veto / shut down the government over 1 week's funding ...... funding the military is insane.

The guy is a partisan hack without a clue.

That is what is really holding the economic recovery back.

  • 4 votes
#4.1 - Thu Apr 7, 2011 6:35 PM EDT

June:

Right on.

And who proposed the tax cuts for Small Businesses and secured them much needed operating capital? Oh, that was President Obama and he also gave them credits to buy Health Insurance for their employees. More lies from the right.

  • 5 votes
#4.2 - Thu Apr 7, 2011 6:43 PM EDT

Bob-o: Federal funds do not pay for abortion. It's law, and proven again and again in each Planned Parenthood audit. You lying creep.

  • 2 votes
#4.3 - Fri Apr 8, 2011 12:50 AM EDT
Reply

It's a good thing most small businesses don't depend on the government for all their needs.

At least the ones that have any one with any kind of brains running them.

  • 5 votes
Reply#5 - Thu Apr 7, 2011 5:52 PM EDT

Spanky perhaps that's because you aren't in need of a loan to stay in business or needing one to start a business because you lost your job and your family is living on the edge. Well God Bless you, perhaps it would be kind to think of your neighbor who is not in the great position you are. We all know that we have more than 14 Million Americans Unemployed, so to think that other Small Business are not in trouble or newly planned business are not in need of a loan to stay a float really tells us a lot about you.

  • 5 votes
Reply#6 - Thu Apr 7, 2011 5:53 PM EDT

I think she was referring to the paper route. Moped loan.

(:^p)

  • 2 votes
#6.1 - Thu Apr 7, 2011 5:59 PM EDT

LJ, your posts are getting old. See if you can have that first post piece emailed to you from the group at MSNBC so you can seem more interesting.

You have been bad today.

  • 1 vote
#6.2 - Thu Apr 7, 2011 6:29 PM EDT
Reply

Always nice to see Republicans who don't care about their neighbors, just as long as they are doing well all is well with the world. Be Blessed you two.

  • 3 votes
Reply#7 - Thu Apr 7, 2011 5:54 PM EDT

Always nice to see a Liberal steal the money from the children. You know, the children of today will be paying for the deficits of today when they become adults. Doesn't bother you though, does it June? Just as long as you get yours, you don't care.

  • 5 votes
#7.1 - Thu Apr 7, 2011 5:58 PM EDT

Really JoAnna? If you were paying attention, you'd notice that the main drivers of the current budget deficit are: 1) the war in Iraq/Afghanistan; 2) the Bush tax cuts from 2001/2003; and 3) rising Medicare costs (which are from a bipartisan failure to rein in our health insurance system and from Bush's very expensive and unfunded Medicare Part D).

The rich now pay far less in taxes as a total percentage of income than any of the rest of us, and this is all because Republican hacks told us that if we gave these tax breaks, we'd have a really great economy. Wrong.

There's a reason that 90% of the national debt was rolled up under Republican presidents: cutting taxes for rich people causes deficits, and it steals from our kids to pay the rich. So shut the f up until you learn some facts. You dimwitted twit.

  • 3 votes
#7.2 - Thu Apr 7, 2011 6:12 PM EDT

MucusOO

Why don't you take your slimy ignorance and not come back.

  • 2 votes
#7.3 - Thu Apr 7, 2011 7:06 PM EDT

Now now guys, no need for us to start acting like congressmen.

  • 4 votes
#7.4 - Thu Apr 7, 2011 7:26 PM EDT

June, Fl

Always nice to see Republicans who don't care about their neighbors, just as long as they are doing well all is well with the world. Be Blessed you two.

Be careful, June... You're starting to sound like a Christian, and we know what the Liberals do to people who pray in public... at least if they're Christian. If you're Muslim, Hindi, or a Satan worshiper, you get a free pass... but that Holier-Than-Thou attitude you've got going there has to go!

Yes, I'm making a funny here... but in all seriousness, let's let the government shut down! They can't spend our money!!!!!

    #7.5 - Thu Apr 7, 2011 9:06 PM EDT

    If you were paying attention, you'd notice that the main drivers of the current budget deficit are: 1) the war in Iraq/Afghanistan;

    Ok; so what would you have had President Bush do after the attack on 9/11/2001? Please enlighten us, because I think he would have been hauled out of the White House by his ears if he had NOT responded the way he did. It happened - We have to live with it now until it's done. Our troops are doing their best over there to do just that - END IT! Let's back the troops fighting to keep our freedom as well as protect this country from potential harm.

    One other thing...we've lost 1527 of our military thus far in Afghanistan, with the peak numbers being during Mr. Obama's reign, and 4446 thus far in Iraq.

    Compare that to:
    WWI: 116,516 dead Americans
    WWII: 418,500 dead Americans
    Korea: 33,686 dead Americans (that we know of - many MIA, and the official total is unknown.)
    Vietnam: 58,267 dead and missing Americans

    Look at the number of years for each... we were in WWI from Spring 1918 (when we joined in the fighting) to November 11, 1918, when it ended. WWII, we declared war 12/7/1941, and it ended 9/2/1945. Korea, June 25, 1950 to July 27, 1953, and Vietnam from 1954 (the U.S. joined March 8, 1965) to 30 April 1975, when the acting president of South Vietnam surrendered.

    I think we're doing a pretty good job, considering that our weapons have gotten deadlier...
    The cost, though high financially, has been low in mortality.

    To continue...

    2) the Bush tax cuts from 2001/2003; and

    Ahh - You can tell from that statement what kind of person you are... because a tax CUT means they STOPPED TAKING SOME OF OUR MONEY! If the taxes were lowered, people would have more money to spend. They could spend it in more places. Companies could hire more workers. The companies would be using the excess money to pay those workers, who would - in turn - pay their share of taxes, and be buying products and helping with the economy. But by taking - YES TAKING - your money, the government is preventing you from spending it in places where you could help others get jobs, companies hire more people for research and manufacturing, etc. The government allowed us to keep our own money with the "Tax Cuts" and to spend it where we chose to do so. How rude of them to allow us to spend our own money, or give it to charity, or buy a house..... How dare they!

    3) rising Medicare costs (which are from a bipartisan failure to rein in our health insurance system and from Bush's very expensive and unfunded Medicare Part D).

    Ahh - there it is again! If people were employed, they could make money and be able to afford their own health insurance - if they chose to purchase it - thus reducing welfare and costs to the system. If people were allowed to invest their money rather than paying those taxes you mentioned, they could afford retirement without Uncle Sam taking "Social Security" taxes from us. Yes - they take from you when you make money, and then they might let you get it back if you live long enough.... Or will they?

    The latest estimates show that the SS system will be broke very soon - especially with the baby boomers (from WWII and Korea) coming to retirement age.

    We're paying people for not having work. We're below 9% unemployment... but how much of that is because people gave up? How many people close to retirement were let go, and are now on social security?

    Also, because those unfunded costs are being pushed down to the states, those too are going broke. Since the 17th amendment was passed, the states no longer have any say in the federal level of government, allowing all these unfunded mandates (such as welfare) to be pushed down to them, and they have no choice but to put more money and more money into that. Where do they get it? Taxes!

    But those tax cuts and "Bush's very expensive and unfunded Medicare Part D" are really making a dent in the income of the government... It couldn't have anything at all to do with the 4 TRILLION DOLLARS that have been added to the national debt since Mr. Obama came into office, now could it?

    The rich now pay far less in taxes as a total percentage of income than any of the rest of us, and this is all because Republican hacks told us that if we gave these tax breaks, we'd have a really great economy. Wrong.

    Let's look at that for a moment... I'm going to comment in italics here.

    The rich (people with money) now pay far less in taxes as a total percentage of income than any of the rest of us (which is unfair), and this is all because Republican hacks (which I assume is your feeling toward them, not anything that has been shown as fact) told us that if we gave these tax breaks (and took less of their money), we'd have a really great economy.

    Now let's look at this a different way.... In fact, let's look at it three ways.

    1. Flat Tax: This has been brought up before, and anyone who does the math will note that the rich would end up spending the same percentage of their pay in taxes as the poor. If there were no exceptions - such as reducing by property taxes, gambling taxes, insurance costs, reductions for children, reductions for other dependents, etc. - then the average person would be complaining because those reductions were removed. It's true, they pay a lower percentage now, and it would be fair to even it all out, and make it ... let's say, 10% of your income regardless of what you make. So the person or business making $10,000 a year would pay $1,000 in taxes, and that rich bastard on the hill living in the mansion looking down on you and laughing who makes $25,000,000 would pay $2,500,000 in taxes. That's the same percentage... it leaves the $10K person with 9K, and the 25M person with 22.5M. This is why it hasn't been done - because too many people think that the flat tax would be unfair to low income people. Even if it dropped to 0 for people making less than $20K, however, you would still have a lot of people complain.
    2. How about we take a person's income and divide it by their age, and take six times that as their share? A 25 year old man making $25K would pay $6K... that same person making $25M would pay $6M. The 50 year old man making $25K would pay $3K... the 75 year old man would pay $2K, etc. Nah, that wouldn't work - People would claim it wasn't fair that they had to do division to do their taxes.
    3. Current way: We pay based on a tax table based on some function of the income, with deductions based on what we do, the dependents we assist (children, elders, etc.), the property we own, the types of investments we make, the charities we donate to, etc.

    Which do YOU think is the most fair?

    There's a reason that 90% of the national debt was rolled up under Republican presidents: cutting taxes for rich people causes deficits, and it steals from our kids to pay

    I'm sorry... but President Obama has increased the national debt... looking it up... one second... Oh yeah; I already mentioned it... four trillion dollars! That's $4,000,000,000.00+
    The total debt is currently $14.279 Trillion Dollars. () Now this was in only TWO YEARS! You find me a Republican President that added 40% to the national debt in two years' time, and I'll cede the argument to you... You can't blame this one on the Bush tax cuts!

    • 2 votes
    #7.6 - Thu Apr 7, 2011 10:02 PM EDT
    Reply

    The shutdown shouldn't be a problem for any small business. They should just get a bunch of credit cards and max them all out, borrow from any bank that will let them, and even print their own money if they run short. Just like the federal government does.

    • 5 votes
    Reply#8 - Thu Apr 7, 2011 5:57 PM EDT

    I had a client build a building with a SBA loan. We coordinated the timing of the loan payments with the construction. Had they been delayed it would have meant construction delays, delays in opening the new building and the jobs it was creating and could also have impacted the payroll since more employees were needed to accomplish the move and staff the new facility----so yes, the SBA delaying loans could be critical to a small business.

    • 3 votes
    Reply#9 - Thu Apr 7, 2011 6:08 PM EDT

    I congratulate them on opening a business.
    I think that they might have been able to get a loan elsewhere if not for the SBA though. Just because it's there doesn't mean there's not an alternative.

    If this goes through... and I hope it does... then I feel the small businesses who aren't already on the verge of collapse will pull through without the government's help.

    • 1 vote
    #9.1 - Thu Apr 7, 2011 10:10 PM EDT
    Reply

    Well, if Obama is accurate in his prediction (btw, who does Barack have in the 3rd at Pimlico?), maybe he should think about signing that CR and telling his good friend Harry "Cowboy Poetry" Reid to get his chamber organized and finally pass a 2011 budget.

    • 4 votes
    Reply#10 - Thu Apr 7, 2011 6:09 PM EDT

    Well Off Topic.

    but i just saw on the News that Judge Prosser is going to Pick up over 7000 Votes in the Wisconsin Supreme court Elections.

    Wonder if his oppenant will concede.........

    • 2 votes
    Reply#11 - Thu Apr 7, 2011 6:12 PM EDT

    Steve: Wonder if his oppenant will concede.........

    Not a chance. It just means the union reps have another long night ahead them to fill out some more ballots.

    • 5 votes
    #11.1 - Thu Apr 7, 2011 6:15 PM EDT

    I am sure they will find some newly found Ballots that were somehow Miss placed..

    I mean hey . It happened here in Washington State...

    • 4 votes
    #11.2 - Thu Apr 7, 2011 6:33 PM EDT

    Steve-O,

    Yeah, I heard he 'picked them up' on his way home from work. Nothing like the incompetence of a party faithful two days AFTER the election,...

    Who were you just targeting with the 'found' ballots comment?

    right! I thought so.

      #11.3 - Fri Apr 8, 2011 12:54 AM EDT
      Reply

      As the clock winds down on the most recent Government budgetary extension, we the people are left in a cloud of uncertainty. Sure, most of the White House windows will be boarded up, the Presidential fleet will be leased out to rap moguls, and President Obama will finally be able to cash in at an ultra-exclusive, white-shoe Wall Street firm–that’s all obvious–but what about the rest of us?

      http://scallywagandvagabond.com/2011/04/government-shutdown-who-will-assume-power/

        Reply#12 - Thu Apr 7, 2011 6:29 PM EDT

        Can't we all just get along?

        • 1 vote
        Reply#13 - Thu Apr 7, 2011 6:53 PM EDT

        Wow, you're asking for the world there I'm afraid.

        • 1 vote
        #13.1 - Thu Apr 7, 2011 7:09 PM EDT

        We could all get along... but wouldn't that be boring? :)

          #13.2 - Thu Apr 7, 2011 10:13 PM EDT
          Reply

          MSNBC is shilling for the Democrats, big time.

          "Two very partisan political issues are essentially what is holding up whether or not there will be a government shutdown," Luke Russert told anchor Thomas Roberts....

          But when it comes to policy, these are things that both sides do not like to give an inch on, obviously because it caters to both their special interest groups. Democrats are for the environment, Republicans are for big business. Democrats are for women's health, Republicans are pro-life. These are the same arguments we've seen in Washington for years, and they're coming now right here in the eleventh hour in terms of this government shutdown and whether or not it's going to happen.

          newsbusters:

          Of course such loaded language skews the controversy in favor of Democrats. For example, conservative Republicans would argue they are not so much pro-big business as pro-economic growth and anti-onerous regulation.

          What's more, tagging Democrats as pro-environment and pro-women's health suggests Republicans oppose environmental stewardship and women's health.

          • 1 vote
          Reply#14 - Thu Apr 7, 2011 10:27 PM EDT

          (NFIB’s political action committee gives mostly to Republican candidates.)

          The First Read crew thinks the use of commas discounts the NFIB's statement even more than the mere fact the NFIB has no validity because they lean Republican, or so FR crew appears to think.

          The next paragraph is hilarious:

          When Obama referred to small business owners relying on loans to make their payroll, he might have been compressing the time frame.

          "Compressing the time frame"? A more accurate description would be HE WAS LYING! Something the Democrats (I have a catchy new name for them....the "Party of No") have been doing unashamedly and non-stop since they became the minority and their agenda was derailed in November of 2010.

          I can always count on FR for their left wing bias slant and putting the best possible spin on the President's disastrous term.

          • 1 vote
          Reply#15 - Fri Apr 8, 2011 6:11 AM EDT
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