Murray and Cantwell endorse Obama's small-business lending fund

THE timing could not be better. As consumer confidence dipped again in July over worries about a sluggish job market, Washington Sens. Patty Murray and Maria Cantwell have pushed for a new small-business lending fund.

The Senate approved an amendment to a broader package of assistance to small business that is expected to leverage $30 billion of public investment into $300 billion of credit through community and smaller banks that lend mostly to small businesses.

President Obama proposed the lending fund in January to shift money from the TARP program toward small-business lending. Cantwell and others report that the Congressional Budget Office states the program could help cut the deficit by $1.1 billion.

Economic recovery is all about jobs, and American consumers, who help power the economy, are spending less in the shadow of a shaky employment market. Small banks lending to small businesses put people to work. Access to credit is key.

Helping Main Street rekindles hiring, boosts consumer confidence in overall business conditions, and fuels the recovery. The money from the U.S. Treasury is put to work, not parceled out in bonuses on Wall Street.

The Obama administration sees the potential of leveraging these funds because the country's smaller banks — those with under $10 billion in assets — make 50 percent of the small-business loans, even though the smaller institutions represent roughly 20 percent of all bank assets.

For the banks, the cost of capital would decrease as lending increases. The legislation creates incentives to attract and maximize the participation of small lenders.

The amendment is part of a larger package of legislation for small business and Main Street America that has attracted scant Republican interest or support. Nothing should be more nonpartisan than putting people back to work.

"It's all about jobs. That's still the primary source of income," Lynn Franco, director of The Conference Board Consumer Research Center told The Associated Press.

"Until we see the pace of job growth pick up and consumers are confident that this is sustainable, we are not likely to see a significant pick up in confidence."

Small business is America's prime employer. Good ideas, good products and steady employment need the lending capacity of the new fund.