To boost confidence among entrepreneurs and investors, America’s political leaders need to send positive, pro-business signals. Members of Congress and President Obama have talked a good game of supporting small business, but the policies of the past two years have been downright hostile. Indeed, it’s time for a major shift in direction.
Small business owners and entrepreneurs are looking for signals and incentives to innovate, invest and add to their payrolls. To that end, paring back government regulations that are costly and unnecessary while advancing pro-growth measures that free up the time and resources of hard-working business owners need to be a priority. If our political leaders in Washington commit themselves to doing all they can to help American business early in 2011, confidence can be restored and healthy economic growth will follow.
Here are key issues the 112th Congress must focus on:
Tax reform: The tax system is a mess. Congress must work to secure a stable and competitive pro-entrepreneur tax system. An ever-changing tax code, as it now stands, with the potential for tax increases in 2012 does not instill full confidence in investors and the private sector. The tax mess needs to be addressed by locking in a pro-growth tax system.
Affordable health care: Paring back the most costly and damaging aspects of the new health care law (tax hikes, employer and individual mandates, anti-competitive regulatory measures, expanded 1099 reporting, etc.) is a necessary step towards encouraging job creation. Repealing Obamacare is the ideal solution, as its new taxes and regulations remain a source of anxiety for business owners. Currently, Obamacare is doing the opposite of what was promised — health care costs are rising, choices are being taken away, and — through an obscure waiver process — only the powerful and politically connected are able to escape the law’s grip, leaving small business owners left to comply with its costly consequences.
Regulatory restraint and accountability: Federal government agencies and departments are out of control. Quite simply, there is no accountability. Regulatory activists have lost touch with reality. From the Environmental Protection Agency (EPA) to the U.S. Labor Department and beyond, Congress needs to step up and overrule harsh and unjustifiable regulatory action. Aggressive oversight is needed, which will curtail regulatory extremism in general.
Government spending: Cut, cut and cut more. The U.S. needs to get our fiscal house in order. Without such, our economy will underperform and investment and job creation will remain anemic.
Energy development and production: The U.S. needs to produce more energy — period. Gas prices are rising, and with diminished production we are on an unsustainable course, requiring us to import greater levels of oil and gas. Extreme anti-energy forces based at EPA (and lodged within the federal government in general) are hurting consumers, small business owners and U.S. competitiveness. Reversing the anti-energy trend is critical to bringing about stable and affordable energy prices.
Trade: Congress must quickly pass the South Korea trade deal and existing trade accords must be completed. The U.S. needs to get back in the game on trade, as we are losing ground to competitors. Opening additional global markets will provide small business owners with growth opportunities. The bulk of U.S. exporters are small to mid-sized firms — increased market access means more business for our entrepreneurs.
Broadband investment and expansion: Broadband remains a critical tool for entrepreneurial competitiveness and business growth opportunities. Private sector investment is central to deployment, increased capacity and new innovations. Unwarranted government intrusion undermines such investment. The federal government must maintain a light regulatory touch with regard to the Internet.
Access to capital and credit: Existing government rules are undercutting access to capital. At the same time, new regulations being pursued under the auspices of the financial overhaul bill passed last year have the potential to further restrict access to capital and credit. Proposed Federal Reserve rules and forthcoming Consumer Financial Protection Bureau (CFPB) regulations could make a currently challenging environment for small businesses much worse. Congress must police the new CFPB to make sure the entity is abiding by the mandate that it determine whether proposed regulations will negatively impact entrepreneurs’ ability to access affordable capital and credit.
IP protection: Placing a priority on IP protection and enforcement — at home and abroad — is a timely economic and legal strategy that will help stimulate the economy through job creation, while enabling innovation, increasing tax revenues and ensuring the U.S. maintains its global leadership. Enhancing IP will encourage more entrepreneurs to pursue overseas markets, as many do not engage internationally for fear of theft or lack of resources to fight infringement battles.
Entrepreneurs are looking for signals that will boost their confidence. They would like to banish “uncertainty” from their vocabulary in 2011. The 112th Congress needs to do much more than unwind the policy mess of the last two years. It needs to advance measures that give business owners incentives to innovate, invest and create jobs. This is a tall order, but it can be done.
Karen Kerrigan is president and CEO of the Small Business & Entrepreneurship Council (SBE Council).