NEW YORK – The shift in power in Congress may give small businesses help with taxes and regulations, but there's little expectation that sweeping changes are in store.
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In fact, more gridlock could be on the way.
Although Republicans won a majority in the Senate in Tuesday's election, Democrats have enough votes to prevent GOP leadership from cutting off filibusters aimed at stalling legislation. And President Barack Obama can veto bills. That could result in little getting accomplished.
But the approaching 2016 presidential election might motivate lawmakers to come up with legislation Democrats and Republicans can agree on, says Todd McCracken, president of the National Small Business Association. He expects less fighting over spending bills than in recent years. Partisan disagreements caused the government's 16-day partial shutdown in 2013.
What small business advocates expect in the next Congress:
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Party differences dim chances for a big federal income tax overhaul, says Dan Danner, president of the National Federation of Independent Business. That would keep many individual business owners in a higher tax bracket than many corporations have. Small business groups have been lobbying for lower tax rates for individual owners. Obama wants corporate tax rates reduced.
But there could be more support in Congress for a permanent extension of a deduction that allows small businesses to deduct up-front rather than depreciate the costs of some equipment. The deduction for 2014 is $25,000, but is expected to be increased by Dec. 31; it was $500,000 in 2013.
HEALTH CARE AND REGULATIONS
Republicans aren't expected to try to repeal the health care law, but they are likely to try to change parts of the law small businesses oppose, NSBA's McCracken says.
Some owners oppose a portion of the law that declares employees who work 30 or more hours a week full-time. Those workers must be offered affordable coverage if a business will have 100 or more employees in 2015. There's a good chance Republicans will try to ease that requirement, Danner says.
Republicans have opposed what they've seen as an increase in regulations issued by the Obama administration that affect small business. They'll be in a stronger position to overrule some of them, including some from the Environmental Protection Agency, McCracken says.
Disagreements over making borders more secure are expected to make it difficult for Congress to pass comprehensive immigration legislation. Many small businesses want visa programs expanded because they can't find enough workers in the U.S. But Obama could issue executive orders to address immigration issues.
"It's not ideal, but it's better than getting nothing done," says John Arensmeyer, CEO of Small Business Majority.
Republicans have opposed Obama's calls for the federal hourly minimum wage to be raised to $10.10 from $7.25. But voters in five states cast ballots in favor of a higher minimum, including usually conservative Alaska, Arkansas, Nebraska and South Dakota.
The success of those referendums and legislative votes this year to raise the minimum in 10 other states may encourage Republicans to support a higher federal minimum, says Holly Sklar, director of the advocacy group Business for a Fair Minimum Wage. They may also be more inclined to raise the minimum, last increased in 2009, as the 2016 election approaches, she says.
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