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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | OCTOBER 18, 2000 MANAGEMENT Weighing the Presidential Options Will small biz go for Bush or Gore? While the GOP has a traditional edge in this bloc, the outcome is hardly certain
Hammock isn't alone. Surprisingly, no polls in the 2000 campaign measure the candidate preferences of small-business owners. But all the evidence suggests a wide-open race for the hearts and minds of entrepreneurs. Though small biz traditionally leans toward Republican platform mainstays such as tax cuts and getting government regulators off the backs of business, not all are convinced that Bush is their man this year. After all, business investment has enjoyed six years of double-digit growth under Clinton-Gore, and many entrepreneurs have reaped the riches of the strong economy. So a lot of folks like the status quo. "We look at the Democratic track record of the past eight years and the gains made, and wouldn't want to disrupt that," says Linda Dearragh, director of the Women's Tech & Venture Center in Chicago. BORROWING BOUNTY. Besides, credit and loan programs implemented under Clinton have made it easier for more people, particularly women, to open up shop, Dearragh says. According to the Small Business Administration, in the past seven years, more than $80 billion in loans have been made to small businesses. That's more than the $78 billion extended to entrepreneurs in the previous 40 years combined, going all the way back to 1953. That's not to say Gore isn't distrusted, especially among the small-biz lobbies in Washington. These groups are reluctant to give the Veep any credit for business achievements. And on the issues, groups such as the National Federation for Independent Business and the National Small Business Survival Committee clearly favor Bush's proposals on health care, Social Security, and legal reform. "While voicing support for small business is as much a part of campaigning as kissing babies, it's more important to back up those words by actually supporting policies that will help small business," says NFIB President Jack Faris. HEALTH-CARE CONCERNS. So what's topping small business' list of legislative concerns? You'll hear the standard calls to cut taxes and regulatory red tape, but what really perks up entrepreneurs' ears this election year is costly health-care insurance. An NFIB study FIB pegs it as the most important issue facing small-business owners -- many of whom pay up to 40% more for coverage than larger companies. To ease the cost of skyrocketing premiums, some businesses have had to choose between increasing deductibles for employees or simply dropping coverage. "The issue of health care is not just about patients and senior citizens, it's everyone," says Christopher Wysocki, president of the National Small Business Survival Committee, a nonpartisan advocacy group. Wysocki and many other small-business owners are championing the creation of Association Health Plans (AHPs). These would allow smaller companies to pool their employees to achieve the same negotiating clout and economies of scale that Big Business has with health-maintenance organizations (HMOs). AHPs are a key part of Texas Governor George W. Bush's health-care initiative, but are not included in Vice-President Al Gore's plan. STEAMED UP. Gore has his own proposal. The Democrat is advocating a 25% refundable tax credit off premiums to enroll employees without health care. Still, most small-business organizations are backing Bush's plan. "I don't necessarily think it's a partisan thing. But Gore just hasn't been speaking the language of small business," says Mark Alesse, New York director of the NFIB. When the subject turns to tax cuts, most small-business owners favor Bush's calls for across-the-board cuts over Gore's targeted ones. What really has entrepreneurs hot under the collar, however, is the estate or "death" tax -- an 18% to 55% levy on a business' assets that heirs must pay when the owner dies. According to the NFIB, 60% of small-biz owners say they would add more jobs if the tax was repealed. They claim the dual burden of saving for the death tax and for retirement prohibits them from expanding their businesses. Here, too, Bush has the favored response. He wants to repeal the tax, whereas Gore favors raising the exemption of those who would be taxed from $2.6 million to $5 million. President Clinton refused on Aug. 31 to sign a Republican bill that would have repealed estate taxes. HIGHER MINIMUM? Small-biz concerns also run deep over Social Security reform. Most owners want the system to remain solvent so they don't have to increase payroll taxes. Many groups favor the Bush plan, which would allow people to privately invest a portion of what would go to Social Security, over Gore's plan to let the government keep the money in Treasury bonds. Small-business interest groups are also opposing further increases in the minimum wage and expansion of the Family Medical Leave Act, which would allow employees greater flexibility in taking leaves of absence for sickness or pregnancy. Gore supports both a minimum-wage increase and expansion of the Medical Leave Act. Even though the NFIB doesn't officially endorse Presidential candidates, it, along with the National Small Business Survival Committee, favors all of Bush's proposals. And the groups are encouraging their 600,000 members, 91% of whom voted in 1996, to do the same. But it's far from a sure thing that Bush has the small-business vote locked up. Fact is, most of the nation's 21 million business owners aren't a part of the NFIB or any other trade organization. While most have conservative economic concerns, many lean to more tolerance on social matters than traditional Republican dogma. "It's hard to know how owners will vote when they get in the booth. They have lives outside of their business," says the NFIB's Alesse. UNDECIDED. With less than a month left to Election Day, many entrepreneurs simply haven't made up their minds. Some businesses still operate on a shoestring and say they're turned off by Gore's prosperity statistics. At the same time, some struggling small-biz owners admit to feeling left out of Bush's rhetoric, too. "I don't think either candidate is doing a lot to court the guy who owns the business that may only employ 10 to 15 people. They're talking about everybody but that guy," says Don B. Bradley, director of the National Small-Business Advancement Center in Conway, Ark. As with nearly every other voting bloc this election, it's a close race.  By Nicole St. Pierre in Washington Edited by Beth Belton  | | |
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