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Obama Gets Small-Biz Advice He Wasn't Looking For

Two groups that represent small businesses—the NFIB and the Main Street Alliance—have totally different views on what’s important. But that just shows how diverse Small Business America is.

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President Obama

As National Small Business Week kicks into gear, two groups representing small-business owners issued separate assessments today of what Washington should or shouldn’t be doing.

From the right, the National Federation of Independent Business said the Obama administration’s list of accomplishments for small businesses, which was issued on Monday, is irrelevant for most of its members, who tend to be Main Street firms with a handful of employees. The administration’s list included expanding access to credit, boosting export opportunities, and providing a series of targeted tax cuts.

“We think they’re largely missing the point about what small businesses really care about today,” said NFIB president Dan Danner.

NFIB members are more concerned about “big things”—like customers and certainty—than a “series of tiny little things,” he said. Small-business owners are said to be worried about what their tax rates are going to be, how much health insurance is going to cost, and what new regulations will be issued that will hurt their bottom line.

They’re also troubled by Washington’s deficit crisis and what that will mean to them in terms of interest rates and well as taxes.

Deficits are “an anathema” to small-business owners, Danner said. “To them, you either balance your budget or you’re out of business.”

The way to balance the budget is to keep cutting spending—small-business owners aren’t in a revenue-raising mood, Danner said. “They fundamentally don’t believe that government spends their money wisely,” he said.

So you won’t see NFIB supporting any type of tax increase as a way to tackle the federal government’s debt crisis.

The Main Street Alliance, an organization of small-business owners that are much more liberal than NFIB members, has no problems with tax increases, as long as they hit the wealthy and large corporations. Today the alliance issued its list of the top 10 small-business priorities for 2011, which included raising income tax rates on households making more than $250,000.

“The high-end Bush tax cuts don’t help Main Street small businesses—they should be ended as soon as possible,” the organization stated.

The alliance also supports corporate tax reform, but doing it in a way that brings in additional revenue. Insisting that corporate tax reform be revenue-neutral would “only perpetuate a tax structure that benefits big corporations at the expense of small business,” the organization contends.

If you sense an “us versus them” mentality here, you’re right. The Main Street Alliance also is fighting banks and credit-card companies to preserve the financial reform law’s limits on fees charged to merchants on debit-card transactions. It opposes efforts by “industry groups” to weaken the new Consumer Financial Protection Bureau, and it doesn’t think the Federal Reserve should make interest payments to banks on reserves that exceed the required amount. Doing so means banks are “getting paid to sit on their money instead of channeling it into productive lending,” according to the alliance.

Unlike most other business groups, the alliance wants the White House to implement an executive order that would require prospective government contractors to disclose their political spending—including contributions to third-party groups—when they apply for government contracts. Corporate political spending “tilts the playing field against small businesses” and should be curbed, it contends.

So there you have it—two groups that represent small businesses with totally different views on what’s important. But that just shows how diverse Small Business America is.


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Kent Hoover is the Washington bureau chief for bizjournals.

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