Md. governor urges US Treasury secretary to consider investing TARP dollars in small business

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Md. gov pushes for TARP money for small businesses

ANNAPOLIS, Md. — Maryland Gov. Martin O’Malley said Thursday he will be proposing a small business credit recovery program to boost lending on Main Street, and he said he has talked to U.S. Treasury Secretary Timothy Geithner about investing federal money in small business lending.

O’Malley said he recently phoned Geithner, who happens to be a Maryland resident, to talk about reinvesting money from the Troubled Asset Relief Program (TARP) in loan guarantee funds in all 50 states.

“All of us have these loan guarantee funds that were only restricted by our ability to put dollars into them to leverage the other dollars, so imagine if we could get some TARP funds coming to our state because of our leadership on that,” O’Malley said.

Banks have been paying back the emergency loans under the federal government’s financial bailout program faster than expected, and the program will cost $200 billion less than first thought. President Barack Obama has said the lower-than-expected spending could help free up federal dollars for a new stimulus package designed to promote job creation.

O’Malley, a Democrat, has been hoping a new stimulus package would be approved to help Maryland and other states weather big budget deficits.

“Some of the actions that have been taken may have stabilized Wall Street, but they haven’t stabilized Main Street to allow that credit to flow, so we need to do that,” O’Malley said in his keynote address to the Maryland Economic Development Association’s winter conference.

O’Malley said Geithner was encouraging during their phone call, and the governor said the state will continue to follow up with him.

“He was very accessible — returned my call right away — and said he was interested in learning more about it and that it could be a possibility,” O’Malley told reporters after the speech in Annapolis.

Republican Delegate Anthony O’Donnell, the minority leader in the Maryland House of Delegates, said he opposed using federal bailout money, because it enables lawmakers to avoid making difficult systemic budget reductions and reforms that are needed to bring the budget into balance.

“We will never get there, ladies and gentlemen, if we keep taking these handouts to cover up our real problems,” O’Donnell said at the conference.

O’Malley said Maryland already has a program that creates a loan guarantee for businesses, but that it has typically been targeted to larger businesses.

“We want to open it up and hopefully get that small business lending going again in our state,” O’Malley said.

The governor, who is up against a $2 billion budget deficit, has been focusing on job creation and helping small businesses as keys to his legislative agenda. For example, he’s advocating a $3,000 tax credit to businesses that hire someone who is unemployed.