Chamber takes pulse of small business

By DAR HADDIX, UPI Business Correspondent  |  Sept. 11, 2004 at 7:16 PM
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WASHINGTON, Sept. 11 (UPI) -- The U.S. Chamber of Commerce this week took the pulse of small businesses around the country -- and found that most small businesses they polled were optimistic about economic conditions. But in this election year, this national business association has put both Republicans and Democrats on notice with a small business platform that crosses party lines, with health care reform, legal reform, more resources and less regulation among its recommendations.

"Small business owners are by nature optimistic, and they have a good outlook right now. The economy is going in the right direction and these are the companies that are making it happen," Neil Hare, a spokesman for the Chamber, told United Press International.

Of the Chamber's 3 million members, 96 percent are small businesses. There are approximately 23 million small businesses in the United States, which generate three out of four new jobs, account for one-third of U.S. exports and more than half of the U.S. gross domestic product, the Chamber said.

The online survey of 1,335 business owners across the nation, released Thursday during Access 2004 -- the Chamber's small business summit -- showed 85 percent of those polled were either "somewhat" or "very" optimistic that the economy would grow in the next two to three years. And, three out of four said President George Bush's policies, rather than Democratic contender and Massachusetts senator John Kerry's policies, would be better for their business in terms of jobs, taxes, legal reform, business overall, and the overall economy.

"The U.S. Chamber does not endorse presidential candidates but we support a pro-business political agenda that includes reducing regulatory burdens, ensuring a fair tax structure, strengthening our trade ties, and protecting the rights of the business community in the courts," Thomas Donohue, Chamber president and chief executive, said in a statement.

On that note, the number one issue for small business owners right now is health care costs, Hare said, followed by legal reforms.

"Businesses, especially small businesses, want to provide health insurance for their employees -- in small businesses employees are like family. But with double-digit increases every year ... we'll have to cut back on benefits." One thing that would help small firms provide employee coverage would be association health plans, Hare said.

Small businesses that belong to a trade association, such as the Chamber, could be insured through the association under such a plan, resulting in "considerable savings" for small business. However, six or seven bills on the issue have been blocked in Congress, Hare said. "We've lobbied for it -- we just haven't been able to cross the goal line. It's partisan politics."

As for the legal situation, "It's gotten to a point now where lawyers throw up a lot of insurance cases and see what sticks," he said. "It costs (small business owners) a ton of money every time this happens."

Tort claims cost the United States $233 billion in 2002, about double that of other industrialized nations, the Chamber said.

"Small businesses are caught up in lawsuits filed by predatory lawyers ... to force large settlements regardless of responsibility for the harm. One frivolous lawsuit can put a small business out of business," according to the Chamber.

Hare described one case where a blueberry processor was sued by local growers for price-fixing. When the case was over, the processor was ordered to pay more than $50 million to the growers. The verdict has so far been reduced to $5 million, but the business only makes about $1 million a year.

The Chamber also supports immigration, based on the fact that the U.S. work force is dwindling. "The demographic reality is that job growth will soon outpace the labor supply, creating a drag on our economy, unless business has the flexibility to utilize the international workforce." The group calls for expanded visa programs, both permanent and temporary, to meet workforce needs for both entry-level and highly-skilled jobs. It also calls for a way to legitimize the status of millions of immigrants that are already in the United States.

The Chamber said it wants President Bush's tax cuts to be made permanent, but not just those that are directly related to small business, such as increasing the ability of small firms to expense items on their tax returns, meaning they can deduct more expenses from their income and pay lower taxes. The Chamber is also for reductions on marginal income tax rates and eliminating the death tax as well as the alternative minimum tax, which undermines incentives in the regular tax system by targeting small business owners who invest in assets like plant machinery, the Chamber said.

"If businesses -- small businesses in particular -- are to continue to lead an economic expansion, additional tax reforms are warranted. And, tax reforms already enacted must be made permanent to encourage jobs, savings, and investment."

But the Chamber was critical of Small Business Association program funding cuts during Bush's watch. "The SBA 7(a) and 504 guaranteed-loan programs play a vital role as alternative sources for capital when funding through conventional methods is not available. However in the past these programs have been underfunded resulting in severe restrictions that deny entrepreneurs access to the funds needed to start, grow and expand their businesses." Small businesses also need an independent advocate in Congress to "look out for their interests before other regulatory agencies, collect economic data on small enterprises, and testify in front of Congress on their behalf," the Chamber said.

Improved workforce retraining programs, fewer regulations, more access to international trade, a national energy policy and better transportation infrastructure are also high on the list of what the Chamber says small businesses need.

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