Congressional Politicking Threatens Small Business Issues

Congress got back to business this week in a session that will be shortened by the presidential election and likely deadlocked by partisan politicking. A number of small business issues are caught in the logjam and it's anyone's guess whether any will make it to the president's desk.

"It's an election year, and sadly, business owners are expecting even less from their political leaders in Washington," said Karen Kerrigan, president and chief executive of the Small Business & Entrepreneurship Council in a statement. "Given such a 'low expectations' environment, Congress can come out ahead if they were even mildly productive," she added.

Democrats gained control of both the House and Senate in 2006 midterm elections, after nearly a decade of Republican domination. While their agenda has been more focused on helping the middle class and dealing with the war in Iraq, the previous session, which ended in December, was middling at best. Meanwhile, Congress and President Bush sank in the polls.

With presidential elections looming, Congress will likely focus on high-profile glamour issues in an effort to boost the prospects of a Democratic victory in the presidential race. Republicans will be just as intent on bottling up all but the most necessary legislative initiatives. Neither prospect bodes well for small businesses.

In her most recent statement Kerrigan outlined several issues that the SBE Council considers important. The following are among the small business issues still awaiting action:

Self Employed Health Insurance Equity: Two proposals (S.2239 and H.R. 3660) would fix a tax disparity that makes health insurance more expensive for sole proprietors. If any measure passes, Congress should make this simple fix, which I reported on in my column, Self-Employed Left Twisting in the Wind on Health Insurance, in October.

R&D Tax Credit Extension: The research and development (R&D) tax credit expired (for the 13th time) Dec. 31. Congress needs to make this measure permanent, especially as the nation's economy teeters on the edge of a recession. The tax credit is an important tool that remains critical for innovation, productivity, and U.S. competitiveness.

Small Business Expensing: The increase in the amount that small businesses can immediately write off (from $25,000 to $100,000) has made a critical difference in enabling small business investment, according to Kerrigan. Like the R&D tax credit, this provision is also temporary and needs to be made permanent to help the overall economy and U.S. competitiveness.

Regulatory Protection: The Small Business Regulatory Improvement Act (H.R. 4458) is currently awaiting action in the Senate. The measure (H.R. 4458) would force federal agencies to review proposed regulations, and review existing rules on a periodic basis to determine their impact on small businesses. It would also ensure that small businesses are consulted on regulatory issues.

Workforce Needs: With the expiration of the Save our Small Business Act (H.R. 1843/S.988) last year, many small firms will not, and do not, have access to seasonal workers. The measure affects nearly 250,000 employees who work in landscaping, golf course maintenance, tourism and hospitality, seafood processing, and other seasonal businesses.

Congressional leaders and the president have expressed their intent to create an emergency economic stimulus package to keep the economy from sliding into a recession. All of these measures could easily be included. Small businesses are a bedrock of the economy and these measures would go a long way to keeping the economy on a even keel where it counts most -- Main Street.