The Race Is On
As the 2008 presidential election turns serious, all the leading candidates are beginning to woo entrepreneurs. But each has tried different appeals to small business.
On the Republican side, former Massachusetts Governor Mitt Romney touts his own experience in business and his pro-business reign in Boston. Before entering politics, Romney was a venture capitalist and helped fund many startups--including Domino's Pizza and Staples. As governor, Romney created an office to advocate for small companies, reduced regulations and helped implement a landmark state plan that subsidized universal health insurance without raising taxes.
Romney's chief rivals, former New York City Mayor Rudolph Giuliani and current Arizona Sen. John McCain, have not focused as much on business. Both are counting largely on their national security experience to win votes, but to rebut criticism of his social liberalism, Giuliani is running as "the real fiscal conservative in the race." Consequently, Giuliani says less about health care than Romney but is championing broad tax cuts and massive tax simplification, which he used in New York City in the 1990s to spark a decade's worth of business growth. McCain has picked up the theme, advocating for more tax cuts as well.
On the Democratic side, contenders are using different strategies to attract small-business votes. Playing up his populist credentials, former North Carolina senator and vice presidential candidate John Edwards has vowed to focus his campaign on working people and small companies. He has rolled out a plan to provide health insurance to all Americans, which could potentially allow the government to reduce the insurance burden on entrepreneurs. Still, some small-business groups immediately expressed worry about Edwards' plan, which mandates entrepreneurs who do not offer health insurance to pay 6 percent of their payrolls to the government, which would buy the insurance instead.
Like Edwards, New York Sen. Hillary Clinton and Illinois Sen. Barack Obama have promised ways to provide universal health care. But beyond health care, Clinton is touting her knowledge of microcredit loans and other financial instruments targeted toward entrepreneurs. In places like upstate New York, Clinton has heavily promoted a project called "Access to Business Capital" that will assist small companies having trouble winning commercial loans. In April, Clinton helped pressure Congress to fully fund the SBA's Microloan Program. She has also begun highlighting her support for the Manufacturing Extension Partnership, a program that helps small manufacturers develop new technologies but has repeatedly faced potential budget cuts.
Obama, who started his political career as a local community organizer in Chicago, has emphasized slashing regulations on small companies. Indeed, Obama touts his strong support for reforming the alternative minimum tax, a tax originally designed to impact only a small percentage of the wealthy but which now falls heavily on middle-class entrepreneurs. Obama has also touted tax credits to help companies with R&D. Billing himself as an advocate of clean government, Obama has targeted federal contracting, frequently fighting the Departments of Homeland Security and Defense to slash no-bid contracts, which are likely to favor larger firms.
If entrepreneurs are not careful, all this early attention to small-business issues could fade away as the rush for campaign cash heats up--cash more easily tapped from larger companies, whose executives can corral many more donors. Obama and Clinton raised more than $20 million in the first quarter of this year, and this presidential race will likely be the most expensive yet. As the battle draws closer to the primaries, which are packed together even nearer than in the past, the large contributions vital to getting on TV will become even more tempting for candidates.