Part 2 of our 2-part special report on government and small business. To hear from Mary Landrieu, head of the Senate Committee on Small Business and Entrepreneurship, click here.
With the shift in power in the House of Representatives last fall, Republican Congressperson Sam Graves, who has represented the rural 6th District of Missouri since 2001, takes over as chair of the House Small Business Committee. Graves, who previously served as the ranking Republican member of the committee, hails from a small business background himself: He comes from generations of small farmers, and as he says, “a family farm is absolutely a small business.”
In his time in Congress, Graves has become known as a solid conservative voice, focusing on cutting regulation and becoming a vocal opponent of President Obama’s health care reform plan. Given his conservative bona fides, it’s no surprise that Graves has been endorsed by the National Federation of Independent Businesses, which called him a “Guardian of Small Business” for voting in favor of NFIB-endorsed issues more than 70 percent of the time. He also won plaudits from other conservative-leaning small business organizations, like the Small Business and Entrepreneurship Council, as well as a 65 percent rating from the middle-of-the-road National Small Business Association.
But Graves has also attracted some criticism from more moderate small business organizations, whose members believe his small government values sometimes lead him to oppose measures that could help smaller companies. For one, Graves opposed the recent expansion of the State Children’s Health Insurance Program (now known as CHIP), which could help some small company employees.
But despite growing partisan bitterness in Congress, he has generally worked smoothly with Democrats on the Small Business Committee, according to several congressional staffers. In part, this is because the committee generally takes a more bipartisan approach to issues than many other committees.
Indeed, in the new Congress, Graves, now no longer in the opposition, plans to keep the focus on several small business issues that enjoy bipartisan support, including streamlining government contracting regulations and eliminating the 1099 tax provision that many feel places outsize burdens on smaller companies.
Still, given the rancorous debate over Obama’s health care reform, will it be a challenge for Graves to keep good relations with Democrats on the committee while staking out his own positions on health care and other issues?
Graves chatted with AllBusiness.com via e-mail about the new Congress, his priorities as committee chair, and how his farming background impacts his views:
AllBusiness: What are your overall top priorities for the committee, and how much do you see the results of the midterm elections impacting those priorities?
Congressperson Graves: The November elections reminded us all that this is the people’s House. We have a responsibility to represent the people’s will. For the last two years, what the people have demanded most from their government is jobs and a lasting economic recovery. The 112th Congress can take the first step toward encouraging both by immediately instituting a responsible budget that cuts federal spending and reduces the deficit.
To promote hiring, we must focus our attention on the American small business owners who create a majority of new jobs. By eliminating overly intrusive federal regulations and working to simplify the tax code, we will help entrepreneurs regain some of the certainty they need to begin expanding their businesses and hiring new employees.
AllBusiness: Are these budget cuts possible in the current economic environment? Many economists argue that any cuts right now will only hurt the recovery.
Graves: There’s no question that we have to cut spending in order to put Washington’s fiscal house back in order. Our nation won’t be on the path to a stable and lasting economic recovery until we get spending and debt under control — and employers can’t regain the confidence they need to hire new workers and grow their businesses until they see that our economy has been put back on the right track.
Congress has already begun taking positive steps by cutting our own budgets by 5 percent, which will save at least $35 million in 2011 alone. While this is just a first step in a long process, my colleagues and I are committed to reining in the federal spending binge that has gone on for far too long.
AllBusiness: How can the government best increase small companies’ knowledge of trade and access to foreign markets, particularly emerging markets like Korea?
Graves: Small businesses represent only 30 percent of the total value of goods exported from the United States. Additionally, small businesses that do export goods are typically only able to sell to one foreign market. With 95 percent of the world’s consumers living outside the U.S., it is clear that expanding trade opportunities for small businesses could dramatically fuel development and increase revenue.
It’s very important that we take steps in the 112th Congress to pass pending free trade agreements with Panama, Colombia, and South Korea. The House Small Business Committee will continue to assess and promote the value of these free trade agreements. Additionally, we will work to eliminate bureaucratic barriers to small business trade while also investigating programs that promote small business exports to ensure they are operating efficiently.
AllBusiness: How likely is this? There has not been much support overall in Congress for passing trade deals.
Graves: There is growing support for the free trade agreements, particularly within the new House majority. Approving these trade agreements would be an important step for our economy and create new opportunities for American companies both large and small to compete in the global marketplace. I hope that the progress with the South Korea Free Trade Agreement is a sign that we can finally move forward with agreements in Colombia and Panama.
AllBusiness: In terms of potentially reducing regulation that impacts smaller companies, what do you view as priorities?
Graves: The House Small Business Committee plans to keep a close investigative eye on all federal programs and agencies that have an impact on small businesses to ensure they are operating efficiently and not overwhelming entrepreneurs with unmanageable regulations. I’d have to say that the 1099 reporting mandate in the health care law is one of the most problematic regulations facing small businesses, so its repeal will be a top priority in the 112th Congress.
AllBusiness: How likely do you think such a repeal will be?
Graves: I have confidence that we will repeal the 1099 provision in the 112th Congress. There is widespread bipartisan support for repeal; even SBA Administrator Karen Mills supports repeal of this harmful provision.
Representative Daniel Lungren (R-Calif.) has already introduced H.R. 4, a bill to repeal the 1099 reporting mandate, and I expect leadership will bring this legislation to the floor in the coming weeks.
AllBusiness: Finally, could you talk a little bit about how coming from a family of farmers, which is in a way like having a small business, has shaped your views on small companies and entrepreneurship?
Graves: A family farm is absolutely a small business. I grew up working on the farm and learning all the ins and outs of running a small business, including budgeting, purchasing equipment, dealing with taxes, and hiring employees. I saw firsthand the challenges small business owners must face, as well as the rewards that come from managing something from the ground up. Working on the farm showed me that there were things that needed to be done in Washington to streamline small business regulations and create an environment more conducive to growth — and that’s why I decided to run for Congress and join the Small Business Committee.
To hear from Mary Landrieu, head of the Senate Committee on Small Business and Entrepreneurship, click here.