Race to the Top

Checking the Scorecard

Both men can claim some small-business legislative achievements. "Kerry has been a major player on the Small Business and Entrepreneurship committee," says Joel Marks, executive director of the American Small Business Alliance, a nonpartisan trade group in Washington, DC. In 20 years in the Senate, Kerry has focused on issues of small companies' access to capital and on minority entrepreneurs. He has tried to preserve and expand the SBA's MicroLoan program as well as its flagship 7(a) loan program-even as the White House has cut 7(a). Similarly, Kerry has fought to preserve the SBA's Women's Business Centers-which provide women entrepreneurs with business training and technical assistance-from funding cuts.

The senator has also used his time on the committee to increase small firms' access to federal contracts-a major issue, as defense spending has skyrocketed in the past three years. This year, the senator has proposed legislation that would increase the federal government's target for giving contracts to small businesses from 23 percent of all contracts to 30 percent. As president, Kerry says he plans to provide small companies with more federal contracting opportunities by reducing the practice of "bundling," in which small contracts are linked together to make one big contract that's easier for a larger company to handle. However, Kerry has also been one of the Senate's loudest voices for environmental standards, workplace safety and higher minimum wages; he has received high marks from conservation groups like the Sierra Club. These positions have not always pleased small businesses.

Bush, meanwhile, has argued that the kinds of specific measures Kerry favors are less important than getting the entire economy back on track. "Bush's most important economic accomplishment [for small companies] has been the tax cuts; they've left money in the pockets of individuals," contends Edward Hudgins, Washington, DC, director of The Objectivist Center, a free-market-oriented think tank. "Half of small businesses get their capital from savings-of their own, of friends and of family-so the Bush tax cuts have been helpful to these businesses." The White House also got the estate tax repealed, a goal supported by small-business organizations.

While the president has focused on macroeconomics, Bush has not completely shied away from programs specifically targeting smaller companies. Though the White House cut funding for some small-business loan programs, like 7(a), the president increased the amount of capital spending that entrepreneurs can expense on their taxes. Annual write-offs, in effect through 2005 and retroactive to purchases made in 2003, have been raised from $25,000 to $100,000. The Bush administration has also developed a strategy to increase small companies' ability to compete for federal contracts.

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This article was originally published in the September 2004 print edition of Entrepreneur with the headline: Race to the Top.

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