The investigation on Rep. Maxine Waters continues, but with additional assistance (Image: File)

• House Seeks Help on Maxine Waters Investigation

The House Ethics Committee may have been trying to investigate Democratic Rep. Maxine Waters, but now it seems they will be requiring additional investigations.

As pressure rises from allegations of probe irregularities, the Committee is forced to hire an additional attorney.  The Washington Post reports that Billy Martin, a prominent DC attorney, will be brought in as outside counsel as the investigation continues.

This news came shortly after the watchdog groups Citizens for Responsibility and Ethics in Washington voiced their concerns with the committee’s conduct to House Speaker John A. Boehner and Minority Leader Nancy Pelosi. The watchdog groups expressed their desire to see the case be handed over to an independent counsel on Monday.

Read more at The Atlanta Post…

• Ebony Founder Gets Postal Stamp

John H. Johnson, the late entrepreneur and pioneering publisher of Ebony, Jet and other magazines, will be featured in the U.S. Postal Service’s Black Heritage stamp series in 2012.

Read more at The Root…

• Al Sharpton: MSNBC’s Next Host?

Al Sharpton could be made MSNBC’s next host, TVNewser reports.

If true, this news is certain to raise eyebrows. Sharpton is, to say the least, a polarizing figure. Even so, he has not noticeably strayed from the standard MSNBC playbook during his guest-hosting stints.

Read more at the Huffington Post…

Obama takes a stand (Image: Getty)

It’s on.

When President Obama delivered his speech at George Washington University yesterday he did more than outline his deficit reduction plan, he came out swinging. Going on the offensive, the nation’s chief executive made a clear contrast between his “framework for shared prosperity and shared responsibility” and the GOP’s 2012 budget assaulting “the basic social compact in America.”

Taking sharp jabs at the proposal that seeks to maintain Bush tax cuts and restructure safety-net programs like Medicaid and Medicare, the president asserted: “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. That’s not a vision of the America I know.”

With a cool, crisp demeanor, Obama gave a 44-minute address that was part history lesson, part policy initiative, part mission statement and part stump speech. Yes, ladies and gentlemen, the 2012 presidential campaign has indeed started.

The president first outlined how a decade of Bush tax cuts further enriched wealthy individuals, eliminating budget surpluses and threatening the stability of our nation. He then proceeded to discuss how meeting national priorities today will “require us to choose a vision of the America we want to see five years, 10 years, 20 years down the road,” advocating industrial investment and innovation. Citing deep cuts in education, clean energy and transportation programs, Obama said the plan unveiled last week by House Budget Committee Chairman Rep. Paul Ryan (D-Wisconsin) “would lead to a fundamentally different America than the one we’ve known certainly in my lifetime.”

The two proposals are radically different. Obama advocates reducing the deficit — the difference between government outlays and income in a fiscal year — by $4 trillion over 12 years, with $3 trillion from spending cuts and $1 trillion from additional revenue. (Without changes to current law, budget deficits will total $7 trillion over the next decade, according to the Congressional Budget Office.) Moreover, additional savings of at least $200 billion and $100 billion would come from cuts in Medicare and Medicaid, respectively, over 10 years and an estimated $400 billion from defense spending by 2023. The president would also use a “debt failsafe trigger” to enact automatic spending cuts if deficits haven’t stabilized by 2014.

Obama’s overhaul of the tax system would eliminate tax breaks and loopholes and even lower some rates to generate $1 trillion in additional revenue. He’s now ready to duke it out with Congress over expiration of Bush-era tax cuts for individuals making $200,000 or more a year and couples making $250,000 or more. Making a clear veto threat, Obama declared: “We cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.”

The Republican’s “Path to Prosperity” has a deficit reduction target of $5.8 trillion over 10 years. The measure seeks to repeal Obama’s crowning legislative achievement, the Affordable Care Act, and claims it would save $725 billion by repealing subsidies customers would have received to help buy health insurance. Medicare would be privatized with seniors purchasing a health care plan on an exchange. Republican proponents say the new system would bring down insurance costs due to increased competition while Democrats claim it would slash medical benefits. And Medicaid would receive a major overhaul resembling a block grant program in which state officials would be allowed to administer the program as they see fit.

Rep. Paul Ryan (Image: Getty)

Ryan’s proposal seeks to extend Bush tax cuts indefinitely and lower the highest individual and corporate tax rates from 35% to 25%, making up revenue by closing tax loopholes, eliminating special tax credits. The GOP maintains allowing individuals and businesses to keep more money will help grow the economy at a faster rate.

The tax proposal inspired a read-my-lips moment for Obama: “In the last decade, the average income of the bottom 90% of all working Americans actually declined. Meanwhile, the top 1% saw their income rise by an average of more than a quarter of a million dollars each. That’s who needs to pay less taxes? They want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors each to pay $6,000 more in health costs. That’s not right. And it’s not going to happen as long as I’m President.”

A number of Democrats and liberals cheered Obama’s performance as the president sought to gain ground with the independent voter bloc that embraces long-term deficit reduction. As expected, Republicans couldn’t wait to engage in some trash talking of its own. Ryan, who sat in the front row as his plan was being picked apart, said after the speech: “What we heard today was not fiscal leadership from our commander-in-chief. What we heard today is a political broadside from our campaigner-in-chief.”

So expect fighting across the aisle as well as intra-party clashes on spending bills. In a vote of 260-167 — 179 Republicans and 81 Democrats voted in favor; 59 Republicans and 108 Democrats opposed the measure — the House passed the six-month spending bill for fiscal 2011, which started on Oct. 1, 2010. Among those items that were eliminated or had dramatic funding reductions were areas championed by the White House like high speed rail development and energy efficiency programs. And House Minority Leader Nancy Pelosi complained Thursday her caucus was shut out of the negotiating process last week when congressional leaders and the White House cut the deal that avoided a government shutdown. The deal now goes to the Senate, which is expected to approval.

The House still must vote on two measures, one related to the possible defunding of Planned Parenthood and the other targeting health care provisions, before being sent to the Senate. Another vote has been scheduled on Friday for the Ryan plan but anticipate more fiery, partisan deliberations.

As Obama laces up his gloves, the question remains whether he will continue to go toe-to-toe with Republicans. In his dealings with Congress, he tends to be a pragmatic dealmaker instead of a all-or-nothing political brawler. Evidenced during the fight over health care and financial reform, his m.o. is creating policy guidelines and then allowing Congress to hammer out details. When inertia stymies the legislative process, he tries to serve as a bridge to compromise.

Although Obama was adamant he would not support extension of Bush tax cuts last year, he made a deal with Republicans in December to not let them expire until 2012. The president capitulated because he “felt that the middle-class tax cuts were being held hostage to the high-end tax cuts. I think it’s tempting not to negotiate with hostage takers, unless the hostage gets harmed.” And last week he agreed to a long-term spending bill that eviscerates $38.5 billion from current spending levels — once considered to be “draconian” by the Democratic leadership in the Senate — to avert a government shutdown. Liberals, however, were upset by his positive spin in which Obama cited the compromise as one that “invests in our future while making the largest annual spending cut in our history.”

During yesterday’s speech he left the door open to bipartisanship, encouraging Democratic and Republican leaders in both chambers to designate four members each to participate in negotiations led by Vice President Joe Biden, beginning in early May, to produce a legislative framework by the end of June as well as find “common ground.”

But many were still impressed with the collected but scrappy Obama they saw at the podium. He firmly communicated his values and made his case with energy and urgency. He appeared to display the resolve to fight for his progressive vision to transform a nation.

“To meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I’m President, we won’t.”

We all eagerly await round two.

Heavy is the head of he who runs the country

The Democratic Caucus spent most of this morning in a closed-door meeting to discuss their dissatisfaction with the compromise that President Obama brokered with Republican leadership earlier this week. The president has since then said that he did what he had to so that millions of Americans would not lose their unemployment benefits. But his party isn’t buying it.

“In the [Democratic Caucus] today, House Democrats supported a resolution to reject the Senate Republican tax provisions as currently written. We will continue discussions with the president and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote,” said Speaker Nancy Pelosi in a statement issued before the meeting even ended.

The most egregious component of the compromise is the estate tax, which would exempt the first $5 million of inheritance for individuals, and $10 million for couples.

“This is a deal breaker as far as I’m concerned and most Democrats feel the same way,” Majority Whip James Clyburn told Blackenterprise.com. “The administration says this is the best the president could do, but I don’t think so. It benefits about 35,000 households in the country but costs $60-$70 billion, which is unconscionable.”

Democrats also are angry that Obama cut the tax plan deal without any input from their party leadership. They cannot be told what the decision has been made, but must be a part of negotiating that decision, Rep. Charles Rangel (D-New York), former chair and still an influential member of the powerful tax-writing Ways and Means Committee, told reporters today while the meeting was still going on. “The executive branch made its decision, but it’s now up to the legislative branch to decide what we should do,” Rangel said.

When asked if Democrats were concerned that the Bush-era tax cuts and unemployment insurance would expire during any renegotiating process, Rangel said, “Of course we are concerned, but not so concerned that we have to explain to the generations that follow why the House of Representatives gave up its legislative authority.”

See more political coverage from our Washington Reports here:

• CBC Opposes the Obama tax plan and says it will negatively impact African-Americans
• Congresswoman Maxine Waters demands her day in court
• Black Farmers settlement bill finally clears the House

A sad chapter in the political career of the legendary New York Rep. Charles Rangel came to a close Thursday evening when the House of Representatives voted to censure him for 11 ethics violations. A seemingly contrite Rangel and several of his colleagues had spent much of the past week trying to drum up support among lawmakers for the lesser penalty of reprimand, to no avail. By a vote of 333-79, the House voted to censure Rangel, wielding the most severe punishment that a member can receive short of expulsion.

He is now part of an infamous group of 22 other lawmakers who have been censured and the first since 1983, when two members were punished for having improper sexual contact with congressional pages.

After House Speaker Nancy Pelosi read aloud the one-paragraph censure resolution, Rangel said, “I know in my heart I am not going to be judged by this Congress. I’m going to be judged by my life, my activities, my contributions to society and I just apologize for the awkward position that some of you are in.”

Similar reasoning led several lawmakers to spend a good part of the day rallying other members to support leniency. The Congressional Black Caucus, which in the opinion of several political observers has developed a reputation for pushing positions based more on emotion than thought, had been working behind the scenes for weeks to develop a strategy that members hoped would result in a reprimand for their beloved colleague, who, many concede, behaved improperly, though without malice. The group appointed Rep. Bobby Scott (D-Virginia), who took part in the ethics committee’s investigation of the case, to mount a defense for reprimand before the vote, during which he cited several examples of members who’d committed more serious offenses yet were only reprimanded.

“He knows he messed up. He knows he will be punished,” Scott said. “He just asks that he is punished like everyone else.”

The CBC also felt it was important to line up White lawmakers, including a conservative Republican member of the New York delegation, Rep. Peter King, to speak on Rangel’s behalf. Still, they were disappointed by the Democratic caucus overall. “Some people that we thought were going to be helpful were not,” said one CBC member, hinting that some members aren’t as “progressive” as they claim to be.

Rep. G.K. Butterfield, an African American member who served as a judge during Rangel’s ethics trial, used part of the time allotted to the ethics committee to speak to push for reprimand. Earlier in the day, he told reporters that many members were unaware of the facts of the case, but after hearing them, anyone who is truly objective, would conclude that reprimand is the appropriate sanction. He also offered an amendment for reprimand that failed by a vote of 146-267, with the help of 105 Democrats.

Rangel’s cherished position as former chair of the powerful tax-writing House and Ways Committee may have negatively contributed to his fate.

“The decision to recommend [censure] was not made lightly,” said ethics committee chairwoman Zoe Lofgren (D-California). “It brought discredit to the House when this member, with great responsibility for tax policy, did not pay his taxes for many years. We follow precedent, but we also set it.”

It didn’t have to be this way.

Rep. Artur Davis (D-Alabama) said that Rangel had previously had several opportunities to accept a plea deal for the lesser sanction. In fact, he noted, in a regular criminal or even civil court, it would be unreasonable to get such a deal after a plea had been offered and denied, and the defendant had been convicted. In addition, he said, such a deal would send the wrong message to other members facing a similar ordeal.

“He could have plea bargained a reprimand several months ago. To decline it and get the same result you would have gotten if you’d entered it makes no sense. It would never happen in the criminal justice system; it wouldn’t even happen in the civil system if there were an enforcement action brought against someone and it shouldn’t happen here,” said Davis. “Otherwise the message to a member will be deny the charges, contest them as vigorously as possible and you’ll still end up no worse than if you’d entered into agreement. Institutionally the House has very little choice but to find this resolution of censure.”

At a press conference following his ideal, Rangel stood his ground, saying that several members had been guided more by voter reaction than conscience. Though many, like Davis, believe he could have avoided Thursday’s ordeal. An adamant Rangel concluded that this unfortunate footnote in the history books was “very, very political.”

Be sure to read these other Rangel related stories.

• Ethics Committee Votes to Censure Charlie Rangel
• Woes Of Governor, Rangel Mark End Of Harlem 4 Era
• Ways and Means

As Vice President Joe Biden and others look on, President Barack Obama signs the healthcare bill. (Source: White House)

When President Barack Obama signed into law the healthcare reform bill Tuesday, he sealed his legacy and accomplished a goal that had eluded every president before him since 1945, when Franklin D. Roosevelt took a first stab at trying to provide healthcare for all Americans.

But it almost didn’t happen.

At the start of 2010, following a year of harsh, partisan debate, Obama’s quest for healthcare reform was still very elusive. To make matters worse, a majority of voters were against the plan, and Obama and the Democratic leadership in Congress had lost control of the message.

So, as he did during his presidential campaign, Obama rolled up his sleeves and hit the trail to make his case to the public that healthcare reform is both a moral and an economic imperative.

His strategy worked. On Sunday, March 21, the U.S. House of Representatives took an historic step and passed a reform package with a vote of 219 to 212. Obama can now take his place beside other presidents who changed America, such as Roosevelt, who crafted the New Deal, and Lyndon Johnson, who heralded the Civil Rights Act in 1964 and Medicare in 1965.

“I think it would have been very damaging if the bill hadn’t passed, but I don’t think it will be a factor in the midterm [elections],” said San Francisco State University political scientist Robert Smith, who believes that by then, most Americans still won’t understand what’s in the reform package. “But the fact that he got the bill done is an accomplishment, and most Americans like winners,” added Smith.

Already, Republicans are pledging to win back control of Congress on the steam of the bill and to repeal it. Several states, including Texas, Florida, and Virginia, are planning to challenge the constitutionality of the bill.

Republican National Committee Chairman Michael Steele criticized the measure Sunday in his blog, saying that “the bill will cause 9 million people to lose the insurance they have now, it will increase the deficit by over a $100 billion when all the components (including the physician fee schedule change) are included, it will increase taxes by $569 billion, it will cut Medicare by $524 billion.”

How the public will ultimately judge lawmakers remains to be seen. Now that the thorny legislative process is over, Democrats must do a credible job of persuading voters that they’ve done the right thing. They say they are confident that once voters begin to feel the immediate benefits of their plan, they will be fully on board.

Coverage will be extended to approximately 31 million people who are currently uninsured. Insurance companies will no longer be able to withhold coverage based on pre-existing conditions. Children will be allowed to remain on their parents’ plans until they are 26 years old.

“The bill is going to transform healthcare for every American positively, but especially for African Americans. In my district alone, which is a majority black district, we have over 100,000 citizens who have no health insurance whatsoever,” explained Rep. G.K. Butterfield (D-North Carolina). “And once this legislation is fully phased in, most, if not all of them, will have quality healthcare, the same quality healthcare that I have as a member of Congress. That is transformational.”

Related reading:

Healthcare Reform in Pictures

Transcript: Obama’s remarks at signing of healthcare bill

According to Cara James, director of race, ethnicity, and healthcare at the Kaiser Family Foundation, the bill’s expansion of coverage and Medicaid eligibility will have major implications for African Americans who are uninsured by a margin of 1 in 5, compared to whites whose margin of uninsured is 1 in 10. She added that a greater focus on preventive care and cultural competency in providing that care, increased funding for community health centers, and efforts to increase the number of providers that include special student loan repayment plans will be hugely beneficial to minority communities.

Butterfield noted that the Medicaid expansion is a critical reform that’s been overlooked in the debate. “Right now, low-income families qualify, but not individuals. So the cousin or nephew who’s 31 and single and makes minimum wage and has no health insurance will be able to qualify. That is significant,” he said.

James also believes that the employer mandate will play a big role in expanding coverage to blacks because they tend to work for smaller companies where they earn lower wages and have less access to coverage because it is often too costly for their employers to provide it.

Small businesses with 50 employees or fewer will not be mandated to offer coverage. But those with 51 employers or more will, and they’ll be assessed a $2,000 penalty per employee if they don’t. However, the first 30 employees will be exempted from that penalty.

“Hopefully a company with 51 employees or more will have the margin in order to provide insurance. They’re going to have to anticipate this,” said Butterfield. “[The bill will not be] fully operational until 2014. So smart business people can get ready right now to anticipate this.”

Later this week, Obama will travel to Iowa to continue making the argument for healthcare reform. And, says Rep. Elijah Cummings (D-Maryland), the president would be very wise to continue making such trips.

Like many of his colleagues, Cummings was saddened by the bitterness of the road to reform, which included incidents last weekend of Tea Party members and other protesters spitting and hurling racial epitaphs at black lawmakers, including civil rights icon Rep. John Lewis (D-Georgia).

To Cummings’ dismay, even after those incidents, Republican lawmakers went out on a balcony overlooking the protesters holding signs that read “Kill the bill.”

“It seems to me that there’d be a level of sensitivity where they’d say maybe we need to tell these folks to chill out, that this is the last thing we should be doing,” said Cummings. “That’s why Obama has to continue to ride the horse that brought him [to office], because when he gets off and lets anything else get in between, he loses the power that the people gave him.”

For now, with this win under his belt, Obama has essentially reestablished his presidency, said Larry Berman, a University of California-Davis political scientist.

“Here’s a new president who, after 13 months, didn’t let the system defeat him and has this major legislative accomplishment. Rather than restarting or recalibrating, in many ways it establishes his presidency in historic terms and also gives him momentum,” he said. “Obama can now move forward. There’s no reason he can’t tackle other issues.”

But like Cummings, Berman believes the president must become more of a “communicator-in-chief” and use the bully pulpit to explain the historic significance of the legislation and how it will provide insurance coverage for all Americans.

Smith said Obama must now turn his attention to financial reform and apply the same level of tenacity he did to healthcare reform. “The House has passed a pretty good bill that puts in place regulations to prevent the things that brought about the near collapse of the economy. Obama has to fight for as strong a bill as possible, otherwise there will be a repeat of the economic crisis in 10 years.”

Berman agrees. Success for both Obama and Congressional Democrats will depend on how successfully the economy rebounds: “He’s got to get jobs for Americans, and that’s how he wins independents back. If jobless numbers go down, that helps him in crucial key states. But if he doesn’t turn around the economy, whatever happens with this bill, it will be disastrous for him.”

Still, he adds, for Obama, healthcare reform passage will likely all have been worth it. “He believes in it,” says Berman, who thinks Obama would rather be a one-term president who didn’t compromise his principles. “He’s no different from George W. Bush when it came to foreign affairs, doing what he thinks is right, no matter the consequences.”

Related reading:

Healthcare Reform in Pictures

Transcript: Obama’s remarks at signing of healthcare bill

We face a security situation in Afghanistan and Pakistan that demands urgent attention. The Taliban is resurgent and al Qaeda threatens America from its safe haven along the Afghan-Pakistan border.

With that reality as my focus, today I send to the Congress a supplemental appropriations request totaling $83.4 billion that will fund our ongoing military, diplomatic, and intelligence operations. Nearly 95 percent of these funds will be used to support our men and women in uniform as they help the people of Iraq to take responsibility for their own future — and work to disrupt, dismantle, and defeat al Qaeda in Pakistan and Afghanistan. The rest of the money will fund a variety of defense and international efforts that will help to use all the elements of our power to confront the threats to our security — from securing loose nuclear weapons to combating fear and want under repressive regimes.

In the past, the Congress has moved expeditiously to approve funding for our Armed Forces. I urge the Congress to do so once more. I also urge the Congress to focus on the needs of our troops and our national security, and not to use the supplemental to pursue unnecessary spending. I want the Congress to send me a focused bill, and to do so quickly. When this request returns to me as legislation ready to be signed, it should remain focused on our security. It is important that we follow the same approach we applied to the American Recovery and Reinvestment Act and keep extraneous and unnecessary projects out of this legislation.

As I noted when first I introduced my budget in February, this is the last planned war supplemental. Since September 2001, the Congress has passed 17 separate emergency funding bills totaling $822.1 billion for the wars in Iraq and Afghanistan. After 7 years of war, the American people deserve an honest accounting of the cost of our involvement in our ongoing military operations.

We must break that recent tradition and include future military costs in the regular budget so that we have an honest, more accurate, and fiscally responsible estimate of Federal spending. And we should not label military costs as emergency funds so as to avoid our responsibility to abide by the spending limitations set forth by the Congress. After years of budget gimmicks and wasteful spending, it is time to end the era of irresponsibility in Washington. In this request, we are honest about the costs we will bear as a Nation, and we will use our resources wisely and responsibly to meet the threats of our time and keep our Nation safe and secure.

There is no question of the resolve of our military women and men. Yet, in Afghanistan, that resolve has not been matched by a comprehensive strategy and sufficient resources. This funding request will ensure that the full force of the United States — our military, intelligence, diplomatic, and economic power — are engaged in an overall effort to defeat al Qaeda and uproot the safe haven from which it plans and trains for attacks on the homeland and on our allies. At the same time that we are increasing our troop commitment, we will employ the necessary civilian resources to build Afghan governance capacity and self-sufficiency.

As the United States moves forward with our mission, we are asking our friends and allies to join us with a renewed commitment. As I made clear on my recent trip to Europe, the threat posed by al Qaeda is international in scope; the response to the threat also should be international. Going forward with this strategy, we will establish and regularly assess military and civilian capacity, checking progress through clear measurements to ensure an ongoing informed assessment and accountability. I have asked my National Security Advisor, General Jim Jones, to oversee this effort and to work with the Congress on the development of these standards for progress.

In Iraq, violence has been reduced substantially because of the skilled efforts of our troops and the Iraqi people’s commitment to peace. The threat of terrorism in Iraq has been dealt a serious blow. Iraqis are prepared to take responsibility for their own future through a peaceful political process. Because of this, we are positioned to move forward with a responsible drawdown of our combat forces, transferring security to Iraq’s forces. Under the Strategic Framework Agreement and Security Agreement, Iraqi personnel have taken the lead in security operations and will continue to handle greater responsibility.

Stability and security depend on responsive, capable, and accountable governments. This request includes funds to help create political and economic stability in post-conflict areas, assist Afghans and Iraqis to protect and sustain their infrastructure, and build their capacity for more responsive and transparent governance. This request also will enable military commanders to respond to urgent humanitarian relief and reconstruction needs in their areas of responsibility. We provide funds for the extraordinary security and costs associated with supporting U.S. diplomatic activity in Iraq, Afghanistan, and Pakistan.

The request also increases funding to provide wounded servicemembers with the highest quality support and care, and provides additional compensation to our troops for their service in hazardous, life-threatening areas.
This request reflects the reality of our day and age: We need to use all the elements of our power — economic and diplomatic as well as military — to confront threats to our security.

Thank you for your consideration of this funding request and for your steadfast support for our servicemembers and their families.
Sincerely,

BARACK OBAMA

(Source: White House)

The Credit Cardholders’ Bill of Rights Act, passed in September by the House of Representatives, would restrict certain practices by credit card issuers. Among them, it would prohibit interest rate hikes on existing balances under certain conditions, restrict card issuers from applying credit card payments to debts with the lowest interest rates first, and require banks to mail bills 25 days before the due date.

“Credit cards are now the largest source of financing for small business owners,” says Kyle W. Kempf, senior director of government affairs for the National Small Business Association (NSBA), a Washington, D.C.-based advocate for small businesses. “With business lending drying up, small business owners are going to increasingly turn to their credit cards. It’s important that this vital capital avenue be regulated with some sensibility.”

The bill must still go before the Senate, but with a new Congress convening in January, it is unlikely to be passed before then unless it’s added to the proposed second stimulus bill, Kempf says. If that doesn’t happen, Congress will have to start all over again next year.

Of particular concern to the NSBA and other organizations is the card issuer practice of raising interest rates retroactively. According to the NSBA, 12 percent of small business owners carry a balance of $25,000 or more and 38 percent carry a balance of more than $10,000. One such business owner is 35-year-old Akili Cooper.

Cooper opened The Remedy for Living, a home furnishings boutique in Bowie, Maryland, with his wife Princess Mhoon-Cooper. The couple used credit cards to help launch the store in 2007 and have at times had an outstanding balance of $25,000. A rate increase would be devastating to the bottom line, says Cooper, since it would not only be more costly overall, but it would raise the minimum amount due at a time.

Under the legislation, card issuers would not be able to raise interest rates unless a promotional rate expires, an index that the rate is based on changes, or if a minimum payment on an existing balance is more than 30 days late. Card issuers would also have to provide written notice of a rate increase at least 45 days before the change goes into effect. Business owners who depend upon credit would be better able to control their finances without the fear of a sudden payment increase looming, Kempf says. “Having $25,000 [with an interest rate of] 10% go to $25,000 at 30% is significant. It makes it difficult to have a sound business plan.”

The bill’s passage could also help offset another recent practice by the credit card industry that has hurt small businesses. With the credit market tightening, some cardholders have begun reducing the credit limits of customers who they perceive to be at risk of default. “If your credit limit is $10,000 on a small business account and they cut your credit limit in half, what do you do?” says Bill Hardekopf, founder of LowCards.com, a Birmingham, Alabama-based company that tracks credit card rates and practices. “You might need that extra $5,000 that they cut to order inventory or pay your bills while you wait for your cash flow to come in. It can have a devastating effect.”

Kempf is confident that the legislation will pass, either this year or after being re-introduced next year, particularly in light of the current state of the economy. “Small businesses are the only part of the economy that is still actually creating jobs unlike everyone else who is shedding them,” he says. The House passed the bill 312-112.

Congressional Black Caucus at Statuary Hall

This afternoon at the Capital Building in National Statuary Hall, Speaker of the House Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV) honored the members of the CBC for their longstanding efforts on Capital Hill.

“The 42 members of the Congressional Black Caucus collectively are the conscience of the Congress. They demonstrate that America is best when our glorious diversity is in evidence in the halls of power,” said Pelosi.