Democratic Senator Mary Landrieu, the chairwoman of the U.S. Senate Committee on Small Business & Entrepreneurship and recipient of the U.S. Chamber of Commerce’s Spirit of Enterprise award, shared her perspective on legislation affecting the small-business community. Below is a portion of our discussion:
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Business on Main: What exactly does the Senate committee do?
Senator Landrieu: The focus of our committee is its name: the Senate Committee on Small Business and Entrepreneurship. “Entrepreneurship” was added several years ago to acknowledge the extraordinary strength of America’s entrepreneurs. The motivations of people who start businesses are diverse. Some want to keep them small for lifestyle reasons and others want to be the next Microsoft. As chair of this committee, I want to honor all of these choices and allow our committee to be a forum for think tanks, universities and entrepreneurs who have interesting ideas on what role the federal government can play in promoting entrepreneurship.
What are the top issues facing the committee in 2013?
There are a couple of important bills that would help generate jobs and growth for small businesses. One of them involves increasing the statutory capital for SBICs [Small Business Investment Companies] from $3 billion to $4 billion. SBICs are not banks but act more like venture capital funds. They are a good example of how government can partner with the private sector to support small businesses.
We know that some of the most successful SBICs around the country are hitting their top limits. We want to increase their capacity to $350 million, which means that there would be hundreds if not thousands of businesses funded through the SBIC program.
Another key initiative is the Commercial Real Estate and Economic Development (CREED) Act. This legislation would extend by five years a provision that allows certain businesses to refinance short-term commercial real estate loans into longer-term loans through the SBA’s 504 loan program. We have an example in our committee of a business owner who reduced his monthly loan payments by $8,000. That is significant savings for any small business.
Taxes affect every single business owner in America. What’s your committee’s role in these discussions?
When it comes to tax policy we have no jurisdiction, but we can be a strong voice to present certain ideas to the finance committee.
When we tackled the revenue issue just a few months ago and had to bring in more revenues to the government, we did not increase tax rates for businesses that make less than $400,000. Most small businesses in America make a net profit that is less than $250,000 a year. So we protected the lion’s share of small businesses from having to pay higher income taxes.
There is a lot of talk in Washington, D.C., about lowering corporate income tax rates, but from our committee’s standpoint, most small businesses don’t pay taxes at the corporate level; they pay it at the personal level.
What’s it going to take for more government contracts to end up with small businesses?
The goal of the federal government is to give 23 percent of all goods and services contracts to small businesses. Not only is it fair to give small businesses a share of federal contracts, but small businesses can be more innovative and cost-effective for the government. I think it’s something like small businesses maybe hold four times the number of patents as large companies because, by their nature, they are innovators.
So we want federal agencies to meet their goals. We do this by having them report to us regularly, by making sure contracting officers are well trained, by holding seminars for business owners, and improving access and information on the SBA website. A few years ago the SBA website was miserable, but [it] has improved under Karen Mills’ leadership.
We’re almost two years into the Affordable Care Act. There is a lot of confusion about small-business-owner obligations. What is the committee’s perspective on this?
It may be fair to say that there never has been a federal law passed that had been subject to more politically charged misstatements [than the Affordable Care Act, to the point] that it is hard for individuals to get good information.
First of all, the Affordable Care Act exempts any business that has less than 50 employees, because we did not want to mandate that a small business must provide insurance. For businesses with more than 50 employees, there are subsidies and tax relief up to a certain level.
For the 20 million Americans who are self-employed and are now priced out of the health insurance market, the SHOP Act will eventually provide an exchange where they will be able to shop and get the same rate that a group would get.
I think in several years, not the immediate future, that the whole country will benefit from the choices available from a health care model that involves a lot of choice.
Immigration policy affects a broad range of business owners, from new tech companies to farmers to local restaurants. How is your committee involved in the immigration debate?
We don’t have jurisdiction on this issue, but we will be involved in creating opportunities for small businesses to testify on the issue. We know there are many instances in which students with expiring visas can be valuable workers for emerging companies or start businesses of their own. Another aspect of immigration that affects the small-business community is the paperwork involved in confirming worker identities. Large companies can set up big back offices to handle this paperwork, but for a small business with less than 15 employees, it’s less practical. We’re hopeful that we can provide some relief for small businesses on these issues.
You have spent a lot of time on improving issues involving disaster recovery and the Federal Emergency Management Agency. How would you grade the response to Hurricane Sandy?
I would give it a C+. We started with an F but we are not going to stop until we get to an A. The SBA has to be quicker to get important businesses up and running again. For example, homeowners can’t come back to their communities until grocery stores and gas stations are open. In New Orleans, we’d say our bars need to open because we like to enjoy a beer after work! We have to do a better job coordinating local governments and nonprofits to rebuild key areas of communities quickly.
Was there ever a close vote where you’d wished that business owners had had an opportunity to chime in to their congressional representatives before the votes were counted?
Absolutely. The EXCEL Act is a good example. It passed the House but was held up by one senator. A push from individual business owners could have made a difference.
Small businesses don’t have the same lobbying strength as large corporations and international businesses, so our committee really does bend over backwards to give business owners a voice, and we want to hear from them.
To engage with the Senate Small Business and Entrepreneurship Committee, visit http://www.sbc.senate.gov/public/.
Thank you, Senator.