Small business is wooed by White House hopefuls

Presidential election politics and last-minutes congressional horse-trading are coming together to produce a break for the US small-business community. All three main presidential contenders -- President Carter, Republican Ronald Reagan, and independent John Anderson -- are sharply vying for the "small business" vote. To that end, both the Democratic and Republican platforms are promising major tax and regulatory concessions to small businesses.

Mr. Anderson is also talking grandly of a broad range of federal efforts to "free our small businesses to get on with the nation's work."

Equally important, a series of legislative goals long sought by the small-business community -- ranging from federal aid in lawsuits involving the federal government to broader patent rights -- are closer than ever to enactment. Several of these important small-business measures are expected to sail through Congress during the next several months and be signed by a President eager to establish his links to a segment of the US business community that hires more than half the entire US work force.

This flurry of political and legislative action reflects a "growing awareness" of the need to help the small-business community, argues Ivan Elmer, director of the Center for Small Business of the Chamber of Commerce of the United States.

Currently, according to legislative and business group analysts here, some four or five important bills stand a particularly good chance for enactment in the next few months.

* Impact legislation:

The Senate has cleared legislation to require federal agencies to weigh the effect of all regulatory rulings on small businesses. The bill has strong support in the House, with at least 243 members endorsing the proposals. The outlook for passage is considered good.

* Cost reimbursement for battling federal agencies:

A Senate-approved measure would reimburse small companies for legal costs incurred in fighting federal regulations or agency requirements. The outlook for passage this year is not considered as strong as the regulatory bill. But proponents are keeping their fingers crossed -- and telegrams and letters flowing to friendly lawmakers.

* Patents:

Another Senate-approved measure would grant generous patent rights to small companies that have developed products using federal funds. The measure is considered a "sleeper," since it has escaped widespread press attention. But small-business officials hope that it is the type of legislation that a majority of House members would find useful to campaign on in their districts.

* OSHA exemption:

The Senate has exempted small companies with 10 or fewer employees from routine inspections by the Occupational Safety and Health Administration. In fact, current year appropriation measures deny use of OSHA funds for such routine inspections. So the Senate measure would merely "ratify" the current policy.

Labor groups are fiercely opposing the exemption in the House, and may well have the votes to block enactment.

* Capital cost recovery:

Lawmakers are expected to adopt some form of stepped-up depreciation schedule for businesses either this year or early next year, as part of a new tax-cut measure.

There is also a growing feeling on the part of small-business groups that the competing political platforms augur well for small enterprises.

"Now, if they'll just keep their promises, we'll be doing OK," says Frank Thomas, an official of the National Federation of Independent Business in San Mateo, Calif.

Mr. Thomas notes that membership in the federation, which represents small businesses, is pegged at 613,000, "an all-time high." Small-business men, he says, have decided that given the problems of the economy, from inflation to recession and mounting taxes, they "just have to get [politically] involved."

For that reason alone, the respective political platforms are considered more important to small-business people than in some past elections when economic conditions were less turbulent:


Following up the White House Conference on Small Business back in January, the Democratic platform contains a number of specific steps to aid smaller businesses. Democrats propose allocating a "fair percentage" of federal research funds to small companies. They would adopt laws to protect the smaller ones from corporate takeovers. They urge scrapping of most federal regulatory (red tape) requirements.


They call for stepped up depreciation measures for small business. They want to scrap unnecessary paper work. They support the court-cost remission legislation noted above. They call for lower business and personal tax rates, and abolition of what they call "excessive" inheritance laws that have the effect of preventing the passing of small companies to heirs.


Mr. Anderson wants a reduction of corporate and capital-gains taxes. He would change federal security laws to make it easier for smaller companies to raise capital through stock sales. He favors allowing a certain percentage of federal contracts for smaller businesses. He would scrap undue paper work.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.