Though there have been some encouraging signs, more than encouragement is needed for our economy. American entrepreneurs and American workers are second-to-none when it comes to hard-work and enterprise, and our businesses are fighting to recover. With the right kind of help from lawmakers, we can help ensure that the recovery is stronger, sooner.
That's why I have authored and introduced legislation, the Small Business Growth and Worker Assistance Act, that would address the problems we're facing. I want to make sure that we protect unemployed workers, that we help states like Maine coping with budget shortfalls, and that we stand up for small businesses, which I have always believed are the engine of our economy and the key to any recovery.
A principal element in my six-point plan for recovery would extend income support to dislocated workers. On December 28, 2002, more than 750,000 Americans, including 1,800 Mainers, stopped receiving extended unemployment benefits because the program created by Congress in March 2002 expired. The economy hasn't rebounded at the pace we had hoped, and an extension in eligibility for unemployment benefits is clearly warranted. Last month, I wrote to the Senate leadership urging them to enact an extension as our first order of business in the new Congress, and when Congress reconvened in the beginning of this week, I cosponsored a bill authorizing the extension, which the President signed into law only days later.
State budgets across the country, meanwhile, are in the worst shape since World War II, and Maine is no exception. Legislatures are having to cut important social services to the bone and are contemplating tax hikes that threaten to undo the effects of any stimulus plan enacted by the federal government. Thus, another element in my six-point economic growth package is legislation that would help the states with their budget problems by temporarily increasing the share of Medicaid costs shouldered by the federal government and providing block grants for social services.
In particular, my bill would designate $10 billion for Medicaid relief and $10 billion in block grants for important social services like child care over the next 18 months. The proposal would bring in an additional $128 million to the State of Maine and help to buffer Maine taxpayers and those who rely on social service programs from the budget crisis that lawmakers in Augusta are confronting. I introduced similar legislation last year, and the Senate passed it with 75 votes. Given the fact that the financial picture has worsened since then, I believe there is still strong support for this legislation, and I will work to see it enacted into law.
Most important, we must make sure that our small businesses have the most fertile soil in which to grow. Small businesses employ 51 percent of private-sector workers and provide some 75 percent of new jobs. During the last downturn in our economy, small businesses generated new jobs at twice the rate of larger companies and helped pull us back to a position of strength. In Maine, they are the engine of our economy and responsible for creating the vast majority of all new jobs.
Therefore, the other elements of my economic growth package aim to shore up our small businesses in Maine and across the country. I would like to expand tax incentives that encourage small business owner to invest in their businesses. In addition, my plan would stimulate outside investment in small business. Entrepreneurs need capital in order to keep their businesses growing and add new jobs. According to a recent report by the accounting firm PricewaterhouseCoopers, those investments declined throughout the country by 26 percent during the third quarter of last year and by 60 percent they year before. In order to get investors to fuel small businesses again, I am proposing tax incentives targeted specifically to encourage this kind of investment.
Another provision of my plan would reduce the depreciation schedule for restaurants, putting restaurants on an equal footing with convenience stores. Restaurants, a sector of our economy particularly hard hit during this downturn, employ a significant percentage of the workforce and need a quicker depreciation period because they require frequent renovation owing to wear and tear and heavy traffic. Restaurants make up a very important part of the landscape where job creation and small businesses are concerned.
Finally, my proposal would authorize an additional $5 billion in emergency spending for the Workforce Investment Act (WIA). WIA provides access to career counseling, as well as workforce-related computer applications, vocational assessments, relocation assistance, internships, occupational skills training, job readiness training, skills upgrading and retraining, and a host of other services. WIA funding makes assistance for dislocated workers possible at 23 career centers throughout Maine, and the kind of guidance that WIA offers will be an important part of helping laid-off workers secure new jobs.
During the upcoming weeks, Congress will be working to help guide our economy through this rough terrain and, in the process, improve our nation's long-term economic health. By assisting displaced workers, helping to give state governments a boost, and promoting job creation by small businesses, we can once again look forward to a strong and productive economy and rewarding employment all Americans.