New President, Congress Will Turn on Money Faucet Construction companies and IT contractors are likely to big the biggest beneficiaries of economic stimulus legislation now being drafted in Congress. The package may generate as much as $350 billion in new contracting opportunities, according to the market research firm Input, but many of the contracts will be awarded by state and local governments. At the same time, many small business advocates are pushing for targeted help for those firms, especially in the form of measures to unfreeze credit markets. Congressional leaders say they don’t expect to pass the final version of the economic stimulus bill before mid-February, but the outlines are taking shape: Infrastructure improvements, including highway and bridge construction and repair, and construction and repair of federal facilities, including national parks. Energy efficiency improvements in federal buildings and public housing. President Obama has pledged to modernize more than three-fourths of federal buildings to make them more energy efficient, by installing new heating systems and power-stingy light bulbs. Education spending, including new IT initiatives and construction and repair of school buildings. Health IT improvements. President Obama’s nominee to head the Office of Management and Budget said one of the new administration’s priorities is to strengthen the federal government’s use of information technology. “That will not only help us deliver services more effectively, it will enable us to gain efficiencies in federal contracting and acquisition,” Peter Orszag told the Senate Budget Committee at his confirmation hearing. In one version of the stimulus plan released by the House Appropriations Committee, practically every federal agency would receive a large chunk of money for new projects. The committee’s plan also includes several tax breaks for small businesses, such as increases in deductions for capital investment and bonus depreciation for investment in new plant and equipment. The bill offers a loss carry-back provision that would allow money-losing companies to claim tax credits on past profits dating back five years instead of two A coalition of small and minority business organizations is calling for action to restore the flow of credit to small firms. “Virtually every American business has witnessed the decline and evaporation of their credit lines which negatively impact their ability to stay in business,” the Minority Business Roundtable and other groups wrote to Congress. “Businesses of all sizes, but particularly small and minority businesses are laying off hundreds of thousands of American workers and we run the risk of further employment declines and historic bankruptcies.” At a hearing before the House Small Business Committee Jan. 14, several trade organizations urged cuts in fees on SBA loans and an increase in the amount of loan guarantees. Lending under SBA’s flagship 7(a) program fell 40% in the fourth quarter of 2008, compared to the year before. Paul Merski, chief economist for the Independent Community Bankers of America, said increased fees on SBA loans have driven hundreds of smaller banks to drop out of the program in recent years.