He Said, She Said: Congressional Leaders Parse How to Help Small Business A shared goal of aiding small businesses can't reconcile the divide between Republican Sam Graves and Democrat Mary Landrieu.
By Diana Ransom
Opinions expressed by Entrepreneur contributors are their own.
Republicans and Democrats often stick to opposing sides of any debate, and the leading members of both the House and Senate Small Business Committees are no exceptions.
Although both Rep. Sam Graves (R., Mo.) and his congressional counterpart Sen. Mary Landrieu (D., La.) ran their own small businesses before entering into politics -- Graves in farming and Landrieu in real estate -- where they stand on the big small-business issues, in many cases, couldn't be further apart.
Graves is an unapologetic conservative, who never once voted for any of the stimulus measures -- under Presidents Bush or Obama -- and became chair of the U.S. House Committee on Small Business in January. He thinks the root cause of what's holding small businesses back is government meddling. By contrast, Landrieu is a centrist who has been head of the Senate Committee on Small Business and Entrepreneurship for two years. She holds that while small businesses do indeed have problems, the government can help.
Their respective ideas maybe diametrically opposed, but they do have one thing in common: They both want to do what's best for small businesses. Here's what he said and what she said about the biggest issues affecting small businesses today:
| He Said  Rep. Sam Graves | She Said  Sen. Mary Landrieu |
What has been the most difficult aspect of your role through the downturn? | Identifying the specific things that are hurting small businesses. For instance, health care gets more attention from small businesses than anything else. And second, is the uncertainty about the deficit. | There was a significant challenge in trying to advocate on behalf of small business to a Congress that spent a lot of time focusing on large businesses and big banks. |
What SBA program has been most effective for helping small businesses? | The enhanced loan guarantee programs -- the 7(a) and 504 loan programs -- worked very, very well. In the downturn, the SBA raised its small-business loan guarantee to as much as 90 percent in some cases. That helped provide credit to a lot of these businesses. | The lending programs the Small Business Administration runs -- the 7(a) and the 504 loan programs -- have been very significant. But also increasing the amount that a small business can borrow was significant for helping more companies participate. The Jobs Act increased the 504 loan sizes from $1.5 million to $5.5 million, and the 7(a) loan program brought the loan limits from $2 million to $5 million. |
What key challenges are still facing small businesses? | Small businesses are facing so much uncertainty out there. They don't know what is going to happen, so they're doing everything they can to wait and see. They're in a holding pattern right now. | It's clearly access to capital. The Franchise Association of America was in Washington a couple of weeks ago. They testified on the Hill that just in their franchise community alone, they had a need of $2 billion in capital. |
What will it take to get small businesses to add staff again? | What we can do in the small-business community is something to roll back many of the administration's current initiatives. For instance, we could prevent the Environmental Protection Agency and the Department of Energy from introducing new regulations, and, instead of these short-term extensions, put some permanency in the tax code. Basically, we can try to get the government out of the way so that small businesses can move forward. | For long-range security, making the right changes in the tax code is very important. Hopefully Congress will be making some very significant decisions on broad and sweeping tax reforms, and I'll plan to use my committee to give a voice to small businesses. I want to give them a seat at the table so they can say and suggest to Congress what changes in the tax code and beyond that would really help them to be stronger, better and more effective business people. |
What is your view on whether the SBA could be run more efficiently? | There are already Small Business Development Centers out there that help businesses overall find capital and write business plans. And we've created another set of them for women-owned businesses, another set of them for minority-owned businesses and another set of them for Native American-owned businesses. It's all duplicated programing. So the government is funding all these different advocacy programs and it's taking money away from the loan guarantee programs, which really work. | I think the SBA runs fairly efficiently right now. It's an agency that operates on less than $1 billion annually, compared with the Department of Defense, which operates a budget of $649 billion a year. Women-business owners, minority-business owners and veteran-business owners could potentially collaborate more, but I'm not sure that combining them would actually save any money. But we're looking at ways to be more efficient. For instance, we've already eliminated two or three programs that didn't work at all. |
What is the status of swipe reform and will it be overturned? | We'll give a hard look at that. I'd like to study it before it goes into place. But it's a huge catch 22. You don't want to hurt businesses, but banks say the swipe fees are what's paying for fraud protection. I want to know who it will hurt or help. | That's a big fight between the bankers and the small-business retailers. I think that issue is generally settled for now. But because there is so much money involved, it's going to be something Congress discusses on and off for a while. |
Big businesses can often afford to hire professionals to help them avoid taxes, while small businesses can't. What does Congress plan to do about this apparent imbalance? | Small businesses can't go out and hire a team of accountants to help them out when it comes to business taxes. But these big firms have entire departments that are looking for these very things that help them reduce taxes. The frustrating part is, we've got the second highest corporate tax rate in the world. And what that does is it drives businesses out of this country -- and into a murkier tax territory. | I'm going to be on the war path about this because for small businesses that pay sometimes 25 percent to 35 percent of their income in taxes and then to watch a company like GE walk away and not pay anything in 2010 is just hard to stomach. I'm going to try to provide some leadership on this issue so that large companies and international companies pay their fair share and do not get access to special provisions in the tax code -- putting more of the burden on small businesses. |
