Small-business owners’ concerns about government policies that affect their businesses have intensified after the deep recession and a recovery that doesn’t feel much better.
Karen Kerrigan serves the Small Business & Entrepreneurship Council as president and Raymond Keating is the group’s chief economist. The SBEC, an 18-year-old group with 100,000 members, takes a stand similar to other groups: Small businesses are struggling because they have to contend with too many taxes and regulations. And taxes and regulations are words that are coming up a lot in presidential campaign speeches, videos and commercials.
Both are worried about what they are hearing from small manufacturers and are unhappy about regulations that some agencies are creating that are bad for small business. Still, they can identify pockets of the country that are experiencing some improvement and can name government agencies that are doing a good job helping small businesses win contracts.
Kerrigan, whose background includes work at nonprofit groups, founded the SBEC in 1994 out of the remnants of a group called the Small Business Tax Action Committee. Five years ago, the group took on its current name.
Keating came to the SBEC a year after its founding. He had worked as an analyst for the investment firm Kidder, Peabody in the 1980s and then headed a nonprofit group, New York Citizens for a Sound Economy.
Both spoke to the Associated Press recently about issues facing small businesses, and the upcoming elections. Here are excerpts from the conversation, edited for clarity and brevity:
Q: Is small business a bigger issue in this election than in past elections?
Kerrigan: I do think it’s a key issue, a top issue and small business is getting more attention and is the focus from both campaigns. And I think primarily this is because of economic conditions and the weak economy over the past four years – and this growing understanding within the public and certainly elected officials and those running for office that we do need robust job creation in the small-business sector if we’re going to get back to strong levels of hiring and robust levels of economic growth. Over the last four years I think both parties have been hitting on this. There’s been certainly a lot of legislation and policies directed toward this sector on the Republican side, certainly a lot of legislation that the House passed over the year or so. And then in the White House the president has had his startup initiative. The JOBS (Jumpstart Our Business Startups) Act was a huge piece of legislation that both parties agreed to and it passed with wide bipartisan support. … The other issue is the type of policies that were pushed at the beginning of the Obama administration, and I think specifically as it relates to the health care law. A lot of small businesses to this day are very much opposed to the health care law and it continues to get a lot of publicity in terms of its costs, its unintended consequences and whether it’s really going to lower the cost for business owners and their employees. …
Recently, obviously, the president’s comments about “you didn’t build that,” that again has put small business front and center. A lot of business owners get offended by that, even though the president said, well, gee, that was taken out of context. Again, I think it just heightens small business and the role that small business plays in this economy to even greater levels.
Keating: The key here is the fact that the economy has done so poorly for over four and a half years. That’s going to bring even greater focus in a political campaign on small business because I think most people understand that small businesses are the engines of economic growth of job creation and innovation. Small businesses are always mentioned in campaigns and always favorably, no matter which side of the political aisle you’re looking at. But just the reality of the current economic situation amplifies this tremendously. And you can tell when you listen to both sides out on the campaign trail, you can see that small businesses just keep getting mentioned. … The intensity level is much higher than in the past.
Q: What are the biggest issues in this campaign for your members?
Kerrigan: They’re very concerned about the economic outlook and the financial stability of their firms and their competitiveness moving forward. That’s not at all being helped in terms of government policies. …They’re concerned about the expiring tax measures and what’s going to happen with the tax code. …We’ve talked about uncertainty so much. Now I think intensity is the new word. The intensity of their concerns has definitely picked up not only now because of this looming (tax) deadline and the threat that poses from an economic perspective on their firms.
Keating: Across the board, uncertainty is still a word that needs to be used. When you look on the policy front, there’s a great deal of questions in general. The health care law. There’s a whole host of questions on the tax cliff, and what might happen there, with the Congressional Budget Office making clear that if current tax law stands, you’re going to see us back into recession in the first half of 2013. So that just adds to the uncertainties, the doubts of small business. If you factor in the presidential election, no matter which side you happen to be on, who knows how that’s going to turn out. I think the only thing that people are sure of is that it’s going to be a late night.