Small Businesses Lukewarm on Obama Jobs Plan

 

The jobs proposal that President Obama outlined in his address to Congress last night got a lukewarm reception from small business organizations whose members are the supposed beneficiaries of the measures. While the overall response was guardedly positive, a number felt that bolder steps were called for.

The closest to sounding like a cheerleader was the Small Business Majority, but even this group suggested that the president's proposals were just a beginning and that more remained to be done.

"President Obama's speech today on the American Jobs Act underscores the fact that all roads to a brighter economic future start with small business," John Arensmeyer, the group's CEO, said in a statement. "We applaud the president for highlighting the need to cut taxes for small business and offsetting those cuts by cutting corporate tax loopholes, which do no harm to small firms.

But there is more to do, he said.  Lawmakers need to develop and support programs that will provide small businesses with the cash flow they need to keep their doors open, pursue new business opportunities and hire more workers.

The National Small Business Association echoed the president's call for bipartisanship and urged Congress and the administration to act now in bipartisan manner on proposals that will help America's lagging small business community.

Though pleased that the president again underscored the need to ease the regulatory burden on small business, the NSBA said that there continues to be a disconnect between what he says and what various agencies under his purview are doing.

"We support the president's aim to reduce the corporate tax rate, but it cannot be done in a vacuum—broad reforms of the entire tax code is necessary, not just for corporate entities," said Todd McCracken, NSBA CEO. "The overwhelming majority of small businesses are pass-through entities and therefore pay taxes through their individual income tax."

The American Small Business League said the president's new jobs bill misses the boat entirely by ignoring the country's oldest and most cost-effective stimulus program, the Small Business Act of 1953. This legislation requires that a minimum of 23 percent of all federal contract dollars be awarded to small businesses.

"I watched President Obama's speech last night and I was infuriated," said Lloyd Chapman, ASBL president. "If President Obama wants to create jobs, he needs to keep his campaign promise and end the diversion of federal small-business contracts to large corporations."

The president's proposal got an equally chilly reception from the National Federation of Independent Business.

"Small-business owners needed to hear something bold from President Obama tonight, but instead just heard more of the same," Dan Danner, NFIB president and CEO, said in a statement. "His plan does not address the fundamental problems facing small business today. In addition, recent history tells us that a huge federal stimulus program is the wrong approach, and again sends the message that the president thinks it can spend his way out of this recession. The truth is that small businesses need the government out of their way.

The Small Business and Entrepreneurship Council believes the agenda laid out by the president not only provides little to enhance the incentives and ability to accelerate entrepreneurship and investment, but actually includes measures that work against such critical risk-taking.

"The only positive for business investment in the president's plan is extending the ability to expense capital expenditures into 2012," Raymond J. Keating, the SBE Council's chief economist, told BusinessNewsDaily. " Meanwhile, his call, once again, to raise taxes on upper-income earners would mean reduced incentives and resources for the entrepreneurs and investors who drive economic growth and job creation. This speech wasn't about sound economics; instead, it was more class warfare."

Reach BusinessNewsDaily senior writer Ned Smith at nsmith@techmedianetwork.com. Follow him on Twitter @nedbsmith.