Who Is the "Small Business" President?

Presidential candidates offer solutions to what they believe are the most pressing problems facing small business owners today. See how their agendas stack up

by Douglas MacMillan

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With presidential primaries only months away, time is running out for candidates to sway small business owners. They are coveted voters, constituents who employ half of the nation's workforce and create 60% to 80% of new jobs annually, according to the Small Business Administration.

They are also a group of voters rallying around one predominant issue, according to a recent survey conducted by the Entrepreneurs' Organization. The Arlington (Va.) nonprofit asked some 300 of its members—small business owners who make at least $1 million in annual revenues—how concerned they were with the business impact of rising health-care costs. More than three-fourths responded "concerned" or "very concerned." In the same survey, nearly 50% of respondents indicated that the 2008 elections would be important to their businesses.

Health Care Tops the List

With this in mind, BusinessWeek.com recently asked eight major candidates what they believe are the most pressing issues facing small business owners, and how they plan to address them. The responses of Senator Hillary Clinton (D-N.Y.), John Edwards (D), Rudolph Giuliani (R), Senator Barack Obama (D-Ill.), Governor Bill Richardson (D-N.M.), and Mitt Romney (R) predictably crossed paths on several key issues for the 2008 elections, such as health care and job creation—while other concerns were unique. (Senator John McCain (R-Ariz.) and Fred Thompson (R) were also contacted but declined to comment.)

On the campaign trail, most candidates have addressed the nation's costly ranks of uninsured workers (BusinessWeek, 9/17/07), but the top three Democratic candidates in the polls are all proposing sweeping health-care reforms that aim to increase the role of government and lower the burden on small business owners.

Clinton, who led an unsuccessful drive for universal health care under the administration of her husband in the early 1990s, again wants to mandate insurance for all—and would give refundable tax credits for businesses that offer health insurance to their employees to help do so. Edwards likewise advocates health insurance as a requirement for all, but his system relies on pooling competing providers into regional or statewide health-care markets, which he says would bring down the cost of insurance for employers and individuals. Obama aims to work toward universal coverage without making it a mandatory requirement, in part by offering reimbursements to employers who need the most help—such as a small business owner who employs someone facing catastrophic medical bills.

Taxes, Education, and Innovation

Republican canidates Romney and Giuliani are in agreement on at least one issue affecting small businesses: tax cuts. Romney says he would make President Bush's tax cuts permanent, abolish the death tax, and eliminate taxes on interest, dividends, and capital gains for the middle class. Giuliani has stated that he would lower marginal tax rates and lower corporate tax rates.

Candidates from both parties express concern for the future of the American workforce. Clinton plans to address worker shortages (BusinessWeek, 8/21/07) by making colleges more affordable and by supporting apprenticeship programs and community colleges, "institutions that are often on the cutting edge of workforce training initiatives," a spokesperson for her campaign says. Romney stresses the importance of math and science education, as more American jobs are replaced by workers from China and India.

Several candidates' agendas pledge more resources for startups, as a way of encouraging the innovative products and services they bring to the marketplace. Richardson would craft a federal version of the Angel Investor Tax Credit he created in his state to promote high-tech startups. Obama—who cosponsored the bipartisan Small Business Lending Reauthorization and Improvements Act for start-up financing—proposes to spend $250 million annually on business incubators in disadvantaged communities. And Edwards would issue permanent incentives for private-sector R&D.

To see the candidates' agenda for small business, flip through this slide show.

MacMillan is a staff writer for BusinessWeek.com in New York.