NSBA ADVOCATE

Published by the National Small Business Association

Volume 24, Issue 2

SPRING ISSUE - 2010

ARE THEY

LISTENING? SMALL-BUSINESS OWNERS ARE SPEAKING UP, BUT IS WASHINGTON LISTENING?

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Small BuSiNeSS StarS

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reSourceS

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From the hill

Chair Keith Ashmus First Vice Chair Larry Nannis Secretary Pedro Alfonso Treasurer Chris Holman Immediate Past Chair Marilyn Landis Vice Chair, Communications Jeffrey VanWinkle Vice Chair, Advocacy David Ickert Vice Chair, Membership Tim Reynolds President Todd McCracken Editor Molly Brogan Staff Writers Molly Brogan Jere Glover Daniel R. Jones Kyle W. Kempf Jody Milanese

HOW TO REACH US

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In this issue we take a look at the 2010 Small Business Stars who advocate on behalf of small business.

With the passage of the Health Care Reform Bill many small-business owners have a lot of unanswered questions. Find out how NSBA can help you understand this new legislation.

Staff Director and Chief Counsel of the U.S. Senate Committee on Small Business and Entrepreneurship shares with NSBA what it takes to craft good policy for America’s small businesses.

couNcil updateS

Find out what NSBA’s councils Small Business Exporters Association (SBEA) and Small Business Technology Council (SBTC) - have been doing to improve the situation for America’s small business exporters and technology entrepreneurs.

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Feature article In February 2009 small-business owners gathered together to deliberate on the top issues facing small business. NSBA took these issues to the hill and worked the hallways of Congress to help get the small business voice heard.

Now at the midway mark for the 111th Congress, NSBA reaquaints Members of Congress with the top ten priority issues as voted on by small-business owners.

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National Small Business Association 1156 15th Street NW Suite 1100 Washington, DC 20005 Phone: (202) 293-8830 Fax: (202) 872-8543 Web: www. nsba.biz Notification of address changes should be sent to the address listed above.

MISSION STATEMENT

NSBA is a volunteer-led association.

Our primary mission is to advocate federal policies that are beneficial to small business and promote the growth of free enterprise

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NSBA Leadership Corner

TALKING A GOOD GAME IT’S EASY TO TALK A GOOD GAME BUT POLITICOS BEWARE, SMALL-BUSINESS OWNERS KNOW THAT ACTIONS SPEAK LOUDER THAN WORDS.

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By Keith Ashmus, Chair of NSBA

n the coming months, the political rhetoric will be turned up with the onset of the mid-term elections, but has there really been a time in the last decade when the political rhetoric was ever turned down? This rhetoric and subsequent, growing political divide in the U.S. is not only filling our airwaves, it is becoming an issue in itself, and, in the process, diverting our lawmakers from the real work that needs to be done. Even the media seems to spend more effort covering talk than it does covering actions and failures to act.

One place where rhetoric is generally positive is small business. Both parties, plus right and left wing groups, praise small business and claim to want to help us. Too often, those statements are substitutes for real action. Just look at the 111th Congress. Whether we wear donkey pins or elephant pins, smallbusiness owners uniformly believe that Congress could—and should—have done far better by America’s small-business owners.

Admittedly, Congress and the administration have taken certain steps to address some of the most problematic issues for small-business owners—unfortunately they have, time and again, failed to go far enough. As we all know, half-measures are sometimes worse than doing nothing. Broad health care reform has been a key priority for NSBA over the last decade, and some of NSBA’s principles were in fact included in the recently-passed legislation, although not enough. The impetus for NSBA’s proposal for broad reform of the health system was to reduce costs, something we don’t believe the new law will do.

Throughout this issue of the NSBA Advocate, we’ve provided updates on our top 10 priority issues, along with a quick preview of our newly-released report, which highlights both the importance of small business to the U.S. economy and some of the missed opportunities by our elected officials to help small business in concrete ways.

Congress also has approved additional funding to make the U.S. Small Business Administration’s (SBA) 7(a) loan guarantee program more affordable, yet failed to address affordability long-term, resulting in significant confusion and upheaval for many small businesses applying for these loans. It has done nothing to allow for refinancing of 504 loans. Small business is still starved for capital.

We’ve also highlighted the NSBA Stars – champions of small-business issues within Congress, the administration and the media.

Another area of significant confusion and upheaval: the estate tax. Given lawmakers’ inability to enact some kind of estate tax reform late last year, the tax went away altogether in 2010, placing estate plans in jeopardy and leaving small businesses to worry about when the other shoe will inevitably drop. This was simply legislative malpractice.

Whether we wear donkey pins or elephant pins, small-business owners uniformly believe that Congress could— and should—have done far better by America’s small-business owners.

We in the small-business community face an uphill battle when it comes to turning the prosmall business rhetoric, in which both parties engage, into helpful legislative action on issues that matter most for small business. It is one thing to say that enacting credit-card reform that protects small-business owners is a no-brainer. It is another thing altogether to get it done—and at the end of the day, performance is what matters.

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Finally, we have profiled the winner of the NSBA 2010 Lewis I. Shattuck Small Business Advocate of the Year—a small-business-owner who has gone above and beyond in pushing for policies that help small businesses across the U.S.

If there is one uniting philosophy that we all share as small-business owners—tea-party member or CodePink advocate—it’s that actions are what counts. It’s not talking the talk that will make our businesses thrive, it’s walking the walk. Keep holding our public officials accountable for what they do and don’t do, not what they say!

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NSBa Small BuSiNeSS StarS

SMALL BUSINESS

STARS NSBA is pleased to announce the 2010 Small Business Stars, ten of the most influential, smallbusiness focused members of Congress, their staff, members of the Administration and the media.

The awardees, who were among an impressive list of individuals with strong dedication to the small-business community, exemplified the kind of leadership small business needs and deserves.

With the small-business community facing many significant challenges, NSBA’s 2010 Small Business Stars were leaders who advocated for the issues that matter most. Rather than give the all-too-common-for-D.C. lip-service to small business, these individuals have fought hard battles and pushed for the betterment of small business.

Whether through the introduction of legislation to ensure small-business credit cardholders are treated fairly, working to develop a mechanism to help credit flow once again to small businesses, or never letting a key small-business story go untold, the 2010 Small Business Stars have gone above and beyond for America’s small-business owners.

While each of the Stars have made a significant contribution, two stand out as the most tireless, committed individuals advocating for the small-business community: The Chair and Ranking Member of the U.S. Senate Committee on Small Business and Entrepreneurship, Sens. Mary Landrieu (D-La.) and Olympia Snowe (R-Maine).

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Sen. Mary Landrieu (La.)

Chair, U.S. Senate Committee on Small Business and Entrepreneurship Having only assumed the chair of the Committee last year, Sen. Mary Landrieu quickly has established herself as a strong and vocal advocate for America’s small businesses.

Landrieu has taken a lead in trying to combat the credit crunch crippling small-business owners. She and Snowe introduced the Small Business Job Creation and Access to Capital Act (S. 2869), which would extend the small-business stimulus provisions through 2010. It also would increase the loan limit on 7(a) loans from $2 million to $5 million, on 504 loans from $1.5 million to $5.5 million, and microloans from $35,000 to $50,000. Landrieu and Snowe also asked Treasury Secretary Geithner to examine the viability and utility of using TARP funds to guarantee existing lines of credit for qualified smallbusiness owners.

Together, Landrieu and Snowe have continued to stand guard against efforts to allow businesses majority owned by large venture capital (VC) firms unlimited access to SBIR and other SBA programs. They also introduced an amendment to the Credit CARD Act that would have guaranteed that the safeguards codified by the law would have applied to the cards used by small-business owners.

Additionally, Landrieu and Snowe secured the passage of an amendment requiring that at least two percent of any funds made available for the Environmental Protection Agency’s ENERGY STAR program be allocated to the ENERGY STAR for Small Business program.

Landrieu also has been an outspoken advocate for small businesses in the health care debate. She authored and promoted several small-business amendments to the Patient Protection and Affordable Care Act [P.L. 111-148], including one that expanded the tax credit to more small businesses and will make the credits available immediately. The Landrieu 6 2010NSBA_Advocate_Spring.indd 6

initiatives provided an additional $13 billion in tax credits for small businesses who wanted to offer affordable, quality health care coverage to their employees.

Although, it was ultimately not offered, Senator Landrieu did move toward considering an amendment to provide tax equity for the self-employed. Her provision would have allowed the self-employed to deduct 50 percent of their health insurance costs which would have provided great financial benefit to the nation’s 22 million self-employed. Unfortunately, this deduction was left out of the new health reform law, but NSBA commends Landrieu for highlighting this issue and

attempting to bring it to the forefront of the debate.

Landrieu has been outspoken on urging her colleagues to support several programs aimed at spurring small-business growth and increasing the number of businesses that export. She has been promoting the Small Business Export Enhancement and International Trade Act of 2009 (S.2862) which boosts small businesses’ exporting potential by improving access to loans, counseling programs and coordination of existing federal export assistance resources.

Through her many efforts, Landrieu has shown a true commitment to small business, and shown us that perhaps bipartisanship for the good of the cause isn’t dead just yet.

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NSBa Small BuSiNeSS StarS

Sen. Olympia Snowe (Maine)

Ranking Member, U.S. Senate Committee on Small Business and Entrepreneurship As the ranking Republican member on the U.S. Senate Committee on Small Business and Entrepreneurship, Sen. Olympia Snowe has continued her staunch advocacy on behalf of America’s small businesses.

Snowe has forged a productive working relationship with Landrieu and together they have introduced a large number of bipartisan, pro-small business bills, including the aforementioned Small Business Job Creation and Access to

Capital Act (S. 2869) and the small-business amendment to the Credit CARD Act. Snowe’s collaborative efforts with Landrieu, and her predecessor, Sen. John Kerry (D-Mass.) have been instrumental in many key pieces of legislation. These efforts include her dedication to maintaining the small-business focus of the SBIR program and a focus on energy/environmental initiatives such as the ENERGY STAR for Small Business program funding amendment.

Snowe also recently introduced the Job Impact Analysis Act of 2010 (S. 3024), with Sen. Mark Pryor (D-Ark.), which would achieve a number of longtime NSBA objectives, including requiring federal agencies to consider both the 2010 SPRING ISSUE

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direct and the indirect impact of proposed regulations on small businesses and strengthening the Office of Advocacy at the SBA by fulfilling a long-term NSBA priority and granting it a separate line item in the federal budget.

Senator Olympia Snowe has sponsored the SIMPLE Cafeteria Plan Act of 2009 (S. 988), legislation to update the tax code to allow small-business employees to purchase employerprovided health insurance with pre-tax dollars. The bill also allows small employers that are sole proprietors, sub-Chapter S corporations, partnerships, Limited Liability Company’s be allowed to participate in their own cafeteria plans.

Through Snowe’s tireless efforts, the Patient Protection and Affordable Care Act [P.L. 111-148] included a provision creating SIMPLE cafeteria plans for small businesses, effective for years beginning in 2011. Unfortunately, the bill does not eliminate the requirement that cafeteria plan participants be “employees” as is outlined under current law. NSBA has been a consistent advocate for SIMPLE cafeteria plans and applauds Snowe for her work on advocating tax equity for small-business owners.

Despite Sen. Snowe’s constructive efforts throughout the health care reform deliberations on behalf of small businesses, NSBA joined her in opposition to the final law. Indeed, during her Senate floor speech denouncing its passage, Snowe agreed with NSBA’s balanced assessment that the new law will do more harm than good for small businesses.

Back in early-2009, Snowe introduced two key export bills, both of which were cosponsored by Landrieu. The Small Business Export Enhancement and International Trade Act of 2009 (S. 2862), which would expand SBA trade finance programs and enhance the U.S. Export Assistance Centers, and the Small Business Trade Representation Act of 2009 (S. 2861) which would establish an Assistant U.S. Trade Representative for Small Business, are strongly supported by NSBA and the Small Business Exporters Association—the international trade arm of NSBA. Snowe has earned a reputation for being bipartisan and willing to reach across the aisle. It is this spirit of ‘getting the job done’ that has made her one of NSBA’s top Stars.

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NSBA Small Business STARS

Rep. Shelley Berkley (Nev.)

Congresswoman Shelley Berkley has represented Nevada’s First Congressional District since 1999 and is currently in her sixth term as a Member of the U.S. House of Representatives.

Rep. Berkley serves on the House Committee on Ways and Means and is active on the Subcommittee on Health.

Rep. Berkley has been vocal on the importance of providing families and small businesses with certainty when it comes to planning for the estate tax. While she supported the passage of the Permanent Estate Tax Relief Act that maintains the 2009 estate tax exemption of $3.5 million per individual and a 45 percent rate, she has often spoke about her desire to see higher exemption levels and a lower overall estate tax rate than those included in the package approved by the House.

She has authored and introduced bipartisan legislation to alleviate the burden the estate tax creates for businesses, farms and individuals. The Estate Tax Relief Act (H.R. 3905) would gradually increase the exemption from $3.5 million to $5 million by 2019, and indexes the exemption for inflation in future years. Over the same time period, the estate tax rate is reduced from 45 percent to 35 percent to reduce the burden on those estates that still have an estate tax liability.

The legislation would create a sensible, stable and permanent framework to help families and small businesses effectively plan for the future. It assures stability in the tax code and allows for estate planning. NSBA is supportive of H.R. 3905 and is committed to working with Rep. Berkley to secure passage.

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Sen. Judd Gregg (N.H.)

Sen. Judd Gregg, along with Sen. Ron Wyden (D-Ore.) has offered a bipartisan solution to ease the never-ending complexity of the tax code. The Bipartisan Tax Fairness and Simplification Act of 2010 takes a comprehensive approach to reforming the tangled web of nearly 10,000 exemptions, deductions, and credits that currently clutter the U.S. tax code in order to create a simpler and fairer system that American workers and businesses can more easily navigate.

The bill would institute a

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streamlined, one-page 1040 IRS Form to file federal income taxes that most taxpayers will be able to use, eliminates the alternative minimum tax (AMT), and institutes a flat 24 percent corporate tax rate. The number of individual tax brackets would be reduced from six to three—15 percent, 25 percent, and 35 percent—and the standard tax deduction for middle-class and low-income taxpayers would be nearly tripled. Although not quite the Fair Tax endorsed by NSBA, this is certainly a good start.

In addition to his most recent efforts on tax simplification, Gregg has a long track-record of understanding key smallbusiness issues when it comes to health care. He was critical in raising concerns over Association Health Plan legislation—a proposal billed as pro-small business, but at the end of the day would have been hugely detrimental to small businesses.

In keeping with the bipartisan theme, Gregg’s tax legislation with Wyden is to be applauded given the difficult political climate of the day.

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Sen. Blanche Lincoln (Ark.)

As one of the Senate Finance Committee’s top-ranking Democrats, Sen. Blanche Lincoln is a leading advocate for permanent elimination of the estate tax. Realizing that is not possible given the current political makeup of Congress, she has called on Congress to adopt significant reforms that would minimize the harm caused by the tax.

Since 2009 Lincoln, along with her colleague Senator Jon Kyl (R-Ariz.), has been championing a proposal that would increase the exemption to $5 million individual/$10 million per couple, reduce the top rate to 35 percent, and “reunify” the estate tax and gift tax exemptions. The measure would adjust the exemption for inflation in later years.

Since 2001, the estate tax has gradually been phased out until it was fully repealed in January. Barring congressional action, it returns next year to pre-2001 levels by socking estates worth more than $1 million with a tax that tops out at 55 percent.

With no current estate tax, Democrats have some incentive to act soon because, as more time passes, it becomes harder to reinstate the tax retroactively for 2010. The plan backed by Lincoln-Kyl would raise $9 billion this year.

NSBA opposes the return of the pre-2001 levels and seeks to provide its members with some consistency on the tax. To accomplish this feat, NSBA has endorsed the Lincoln-Kyl proposal as a way to provide some relief and certainly to small

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NSBA Small Business STARS businesses that are looking to pass their operation and way of life to the next generation.

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Sen. Mike Enzi (Wyo.)

Sen. Mike Enzi has been a tireless advocate serving and protecting the interest of small businesses through his membership on the Committees for Health, Education, Labor and Pensions (HELP); Finance; and Small Business and Entrepreneurship.

Sen. Enzi’s position as Ranking Member of the Senate HELP Committee provided a well-placed advocate during the contentious debates over the Healthy Families Act (S. 1152), the Employee Free Choice Act (S. 560) and the Patient Protection and Affordable Care Act [P.L. 111-148].

Sen. Enzi—a small business owner prior to entering the public life—has become a champion fighting against the overreaching priorities of Big Labor. Not an easy task given labor’s significant electoral support given to the Obama administration and several members of Congress in 2008.

His work to protect the ideological balance of the National Labor Relations Board, as well as stop efforts to pass the Employee Free Choice Act—which would strip American workers of their right to a private-ballot vote, require small businesses to submit to binding arbitration, and increase penalties for unfair labor practices committed by small businesses but not by unions—is commendable.

In addition, throughout the recent health care reform deliberations, Sen. Enzi worked to find compromises, and as one of the bipartisan “Gang of Six” negotiators, Sen. Enzi aimed to find the right balance of cost-containment, improved health insurance access and health care quality, while countering efforts to mandate employers to provide health insurance to employees.

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Rep. Edward Markey (Mass.)

Congressman Edward Markey has been an unflagging opponent of efforts within the U.S. House to undermine the small-business focus of the SBIR program. Along with colleagues Niki Tsongas (D-Mass.), Peter Welch (D-Vt.), and Paul Hodes (D-N.H.), Markey introduced a much-needed amendment to the fatally-flawed SBIR reauthorization bill (H.R. 2965). Unfortunately, the amendment ultimately failed , but his ongoing efforts to protect the SBIR program for small

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businesses hasn’t gone unnoticed.

Instead of allowing businesses majority owned by large VC firms unfettered access to SBIR (and other SBA programs), as called for in H.R. 2965, Markey’s amendment would have allowed NIH to direct up to 15 percent of its SBIR funds—and up to 5 percent of the funds of all other SBIRparticipating agencies—to majority VC-backed firms.

This represented a reasonable compromise that NSBA could have accepted.

The amendment also would have addressed the overly large—given that the overall allocation was not enlarged—increase in award sizes outlined in H.R. 2965. The Markey-Tsongas Amendment would have allowed more reasonable award size increases of $100,000 to $150,000 for Phase I and $750,000 to $1,000,000 for Phase II. Following the passage— without his critical amendments— of H.R. 2965 in the House and the Senate’s passage of its SBIR reauthorization legislation (S. 1233), Markey and 26 of his colleagues sent a letter to Landrieu, encouraging the Senate Committee on Small Business and Entrepreneurship to press for its provisions restricting unlimited VC participation and granting more reasonable award size increases.

NSBA applauds Markey’s tenacity and dedication to ensuring the SBIR program isn’t taken-over by large VC firms.

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Gene Sperling

Counselor to the Secretary at the U.S. Department of Treasury.

Gene Sperling was one of the first and most important policymakers to realize that small-business access to credit was a lynchpin in moving the U.S. economy from a downward spiral and into a recovery and growth mode. Mr. Sperling reached out to NSBA early and has continued to be diligent in his attempts to understand the specific credit needs of small businesses and how federal policy can create the conditions for those needs to be met.

Though some of his proposals and ideas have been thwarted by Congressional inaction, it is refreshing to have such a senior official be so relentless in pursuing the needs of small businesses. In February, Mr. Sperling sat down with the NSBA Board of Trustees for an extended give-and-

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NSBa Small BuSiNeSS StarS

take conversation on small business, the economy, and the state of small business lending. His refreshingly candid and straightforward remarks provided valuable insight into the administration’s efforts on enhancing capital opportunities for small businesses.

In his senior Treasury post, Mr. Sperling has been crucial to the government’s response to the economic downturn, and previously served as the Director of the National Economic Council (NEC). While Mr. Sperling has been involved in all facets of economic policy, he is widely seen as the architect of the new efforts to promote smallbusiness lending through community banks.

Dave Helfert

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Formerly Communications Director for Rep. Neil Abercrombie (D-Hawaii) As the lead staffer for small-business issues for former Rep. Neil Abercrombie (D-Hawaii) and a former small-business owner himself, Dave Helfert displays an uncommon passion and tenacity for helping entrepreneurs in the halls of power on Capitol Hill.

While Abercrombie was not a member of the House Committee on Small Business, he was a staunch advocate for small firms. In the current Congressional session alone, Abercrombie introduced two important, NSBA-supported small-business bills: the Small Business Credit Card Act of 2009 (H.R. 3457) and the Small Business Job Creation and Access to Capital Act (H.R. 4302).

The Small Business Credit Card Act of 2009 would extend the consumer protections against unfair and deceptive acts by credit-card issuers contained in last year’s Credit CARD Act to the credit cards used by small-business owners. This

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is a top priority for the small-business owners of NSBA and Helfert played an instrumental role in its creation.

The Small Business Job Creation and Access to Capital Act would increase the maximum loan sizes for the 7(a) and 504 loans of the U.S. Small Business Administration (SBA). It also contains a commensurate increase to the statutory maximum guaranteed portion of SBA 7(a) loans.

Helfert has pushed hard for the passage of H.R. 4302 in the House.

Peter Barnes

Senior Washington Correspondent, FOX Business Network

Peter Barnes has provided some of the most thought-provoking television coverage of small-business issues in the last year.

He has actively reachedout to the small-business community to cover the stories that matter most to small business, and to bring to light their untold stories.

Throughout the economic downturn, Barnes has covered key lending issues and provided critical updates on the financial markets and their impact on small business.

Prior to joining FOX Business News, Barnes served as an anchor and Washington correspondent for CNBC, and was a reporter for Wall Street Journal. In addition to his expertise reporting on small-business issues, Barnes was himself an entrepreneur for many years, and prior to joining FOX Business News in 2007, had run a successful small business in the Washington, D.C. area It is this first-hand insight as a small-business owner that has made Barnes an invaluable asset to small businesses. His reporting not only covers the policy makers, but the implications on small businesses of their policy decisions as well.

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COM .COM

All the same great information as the print version of the NSBA ADVOCATE, but in a digital and more travel friendly design.

Presenting nsbaadvocate.com for America’s smallbusiness owner on the go.

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NSBA data is quoted regularly in local, regional and national media outlets. Our members and on various radio shows. Below are just a few of the many recent media mentions of NSBA. For more, NATIONAL JOURNAL CHAMBER ADS DIVIDE SMALL BIZ Molly Brogan, vice president of public affairs for the National Small Business Association, characterized her group’s position as “somewhere between the two” extremes in an e-mail to National Journal.

“We’ve been calling for broad reform of the health care system since 2004, but it’s got to be the right reform, and it’s got to be affordable --which I think is the underlying issue [the chamber’s] ads are trying to point out,” she said.

PITTSBURGH TRIBUNE REVIEW EMPLOYERS LASH OUT OVER UNEMPLOYMENT TAX SPIKE “We were hanging on by our fingernails; now, we’re down to the finger. It’s another tax (increase) on small businesses, and we’re not even back on our feet yet,” said Marilyn Landis, past president of the National Small Business Association and owner of a business consulting firm on the North Side.

KAISER DAILY REPORT WILL NEW HEALTH CARE LAW REALLY HELP SMALL BUSINESS? “The health care overhaul law “certainly addresses a lot of access side of the equation but it doesn’t address costs,” said Molly Brogan, vice president of public affairs for The National Small Business Association, an advocacy group that opposed the health care law

FOX NEWS HEALTH CARE REFORM WILL HURT SMALL BUSINESS, SOME ENTREPRENEURS SAY It’s going to create huge uncertainty and the potential for another downtick in the economy fed by that uncertainty,” said Keith Ashmus, a partner at Frantz Ward LLP, a law firm in Cleveland. He said the bill will “almost certainly” lead to increased health insurance costs for businesses with more than 50 employees — like his. “And it’s going to result in a lot of people looking at the structure of their business to see how they can structure themselves to avoid horrendous penalties,” Ashmus told FoxNews.com.

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AMERICAN CITY BUSINESS JOURNALS NSBA, SBEA RELEASE NEW SMALL BUSINESS EXPORTING DATA “Given the specter of a jobless economic recovery and lagging consumer spending,” stated Todd McCracken, president of NSBA, “exporting may be one of the few areas remaining where small businesses can grow right now.”

THE STREET TAX MOVES SMALL BUSINESSES SHOULD MAKE “There’s a lot of tax advice we’re giving with a ‘Yes, but ...’” says Larry Nannis, incoming chair of the National Small Business Association and an accountant at the Needham, Mass., accounting firm Levine, Katz, Nannis and Solomon.

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lea ple

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leadership have been featured in prominent publications and television news programs, and appear regularly please visit www.nsba.biz/news.html BUSINESSWEEK CREDIT-CARD REFORM: NO FIX FOR SMALL BIZ Small business advocates hope to attach the measure to a future Senate jobs bill—and to pass it before business owners take on credit card debt mistakenly thinking they’re protected from retroactive rate hikes, says Molly Brogan, vice-president of public affairs at the National Small Business Assn., which has long pushed for credit card reform. “There’s mass confusion,” she says.

WALL STREET JOURNAL SMALL BUSINESSES GET CARD ACCESS small businesses,” says Molly Brogan, a spokeswoman for the National Small Business Association in Washington, D.C. “But at the end of the day, we don’t feel 100% great about it,” she says. Instead, the NSBA and other small business advocacy organizations would prefer legislation that holds banks accountable for providing actual protections to small-business card holders. At this point, “there’s nothing preventing banks from saying ‘gosh we lost a lot of revenue, let’s reverse those changes,’” Brogan says.

USA TODAY AS LENDERS CLAMP DOWN, CREDIT SCORES TAKE A HIT “Credit line reductions are particularly problematic for small businesses, says Todd McCracken, president of the National Small Business Association. A 2009 NSBA survey shows that 59% of small businesses use cards to finance their business.

This survey also shows that 41% of businesses had their card limits cut from April 2008 to April 2009.

AMERICAN CITY BUSINESS JOURNALS INCREASED SBA LOAN GUARANTEES EXTENDED THROUGH APRIL 30 “Credit has not gotten any easier for small businesses,” said Molly Brogan, vice president of the National Small Business Association. Nearly 40 percent of NSBA members say they haven’t been able to obtain adequate financing for their businesses, she said.

WALL STREET JOURNAL ASSOCIATED PRESS COMPANIES CONFUSED BY HEALTH LEGISLATION BANKS GIVE SMALL BUSINESSES NEW CREDIT Keith Ashmus, chair of the National Small Business Association says CARD PROTECTIONS the bill is likely to increase insurance premiums because it eliminates The National Small Business Association pushed to get small caps on benefits and requires insurers to cover children on their businesses included in credit card reform, but the effort fell parents’ policies until they turn 26. “Premiums will go up under this short. “If there’s a bank that’s out there voluntarily making bill faster than they would otherwise,” he says. “Some of that will be these changes, that’s a good thing,” said spokeswoman Molly offset by subsidies for some small businesses but only for a limited Brogan. “But it still needs to be codified.” period of time.”

ABC NEWS HEALTH CARE BILL “PRO-BUSINESS,” OBAMA SAYS ‘When it comes to the tax credit, it’s not going to hurt. The challenge is the tax credit is temporary. When it runs out small businesses will be left paying out the full amount,’ said Molly Brogan, vice president of public affairs for The National Small Business Association, an advocacy group that opposed the health care law.

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MEET THE ISSUES MOST IMPORTANT TO SMALL BUSINESS At the beginning of every new session of Congress, NSBA’s members gather to debate and vote on the key issues facing small business. Throughout the 3-day gathering, NSBA’s small-business members discuss hold-over issues from the previous session of Congress, as well as raise new issues likely to be at the forefront of legislative debates for the coming two years. Back in February 2009, NSBA’s members voted the following issues as NSBA’s top ten priority issues for the 111th Congress.

These issues continue to be of critical importance to small-business owners today, and NSBA calls on lawmakers to address these small-business priorities.

NSBA has fought for years to achieve a broad reform of the health care system with a goal of universal coverage, a focus on individual responsibility and empowerment, the creation of the right market-based incentives, and a relentless focus on improving quality while driving out unnecessary, wasteful and harmful care. However, despite relentless advocacy, in-depth consultation with policymakers, and explicit guidance on needed changes throughout reform deliberations, Congress passed a health care reform law in March 2009 that failed to garner NSBA’s endorsement.

NSBA concluded that the new law will place extraordinary new pressures on small businesses to both offer and pay for employee health insurance, starting in the earliest stages of reform. However, the provider-level reforms that could contain costs and enable small businesses to afford this commitment will not be fully effective for many years—if at all. NSBA justifiably expects that small companies caught between these twin pressures will see their ability to grow, prosper, and create jobs diminished.

While the new law has many positive features that NSBA supports – repair of the dysfunctional individual and small group insurance markets; focus on individual needs

Health Care Affordability

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feature article and responsibilities; and, a start on transforming the delivery system – its short-comings are too significant.

Under the new law, the Congressional Budget Office determined small business health premiums will continue to increase. The legislation does nothing to encourage costconscious consumer behavior, aside from the unnecessarily blunt “Cadillac tax,” which is not transparent and imposes unintended administrative burdens on small businesses. The delivery system reforms, while positive, are too back-loaded, giving interest groups years to water them down or remove them entirely. Malpractice reform, absent from the legislation, would make these reforms much more effective. Though currently excluding most small companies, the large increases in “free-rider” essentially eliminate any distinction between an employer mandate and a free-rider provision. The tax increases on both earned and unearned income could have a significant effect on many small-business owners and their ability to reinvest in their companies’ growth.

NSBA has stood apart from other groups during deliberations on health care reform, preferring to be a nonpartisan, thoughtful, and member-driven organization. We will continue to work positively for needed changes to the new law going forward via the lengthy regulatory process and future legislative opportunities. In the future, NSBA and its members expect a sense of urgency by Congress to truly bring down the cost of health care, not merely expand its access. Please visit HealthReformToday.org for more information.

coercion. Employees who sign just to get persistent organizers out of their living rooms will now be stuck with the union in their workplaces indefinitely. As if this weren’t bad enough, the Act could then impose a contract on the employer, based on what a government-selected arbitrator decides. Even if a wage increase can’t get passed along, or a union pension plan is underfunded, the arbitrator could force it on an unwilling small business.

Furthermore, NLRB jurisdictional standards used to identify organizing-eligible businesses are outdated and not indexed for inflation. Some of these jurisdictional standards are shockingly low, including any non-retail company with more than $50,000 annually in direct or indirect inflow or outflow of goods or services across state lines. To be considered a small business for nearly every government program according to the U.S. Small Business Administration’s Size Standards, however, the range in total annual sales starts at $750,000 and goes up to $34 million—far above NLRB’s threshold.

Despite ample rhetoric on card check by its proponents, a surprise party switch by Sen. Arlen Specter (D-Penn.), and subsequent efforts to “compromise” on the legislation, the majority in Congress failed to move card check in 2009.

However, with President Obama’s recent recess appointment of former SEIU labor-lawyer Craig Becker to the National Labor Relations Board, Big Labor is threatening small business employer-employee relationships once again in 2010. Please visit nsba.biz/efca for more information.

One of the biggest threats to small business is potential changes to labor practices Fair Labor Practices in the workplace. The top priority for organized labor in the Workplace in the 111th Congress is legislation that would change long-standing labor laws that have been on the books for over 60 years to allow for increased union membership via the Employee Free Choice Act (S. 560/H.R. 1409). NSBA strongly opposes the Employee Free Choice Act and any other ill-advised labor law reforms.

The Employee Free Choice Act would take away a

The Small Business Innovation Research (SBIR) program is a key means of access to capital SBIR Reauthorization, Expansion, and for small R&D companies and the nation’s largest Strengthening source of early-stage research and development (R&D) funding.

SBIR has delivered thousands of innovations in its 25year history through a competitive and transparent contracting process. It has provided more than 60,000 patents and now generates new patents at the astonishing pace of seven per day,

worker’s right to a federally supervised private ballot when deciding whether or not to join a union. Instead, the proposed bill would require the National Labor Relations Board (NLRB) to certify a union that brings in signed authorization cards from a majority of employees in the company bargaining unit. The card check system makes it easier and less expensive for unions to target and organize small businesses of any size, using any means available—false or misleading promises, threats or

on average—far more than all U.S. universities combined, at less than one-twelfth their level of federal R&D funding.

Despite the remarkable achievements of SBIR, federal R&D funding is still skewed against small businesses. Today, small R&D companies employ 38 percent of all scientists and engineers in America. This is more than all U.S. universities and all large businesses. Furthermore, these small companies produce 20-25 percent of the nation’s most important

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feature article technological innovations—and, per dollar, five times as many patents as large companies and 20 times as many as universities.

Yet small companies receive only 4.3 percent of the federal government’s R&D dollars. The SBIR program provides more than half of this amount.

SBIR has been successful because it is based on a rigorous three-phase process that allocates contracts according to promise. Phase I funds the critical early development stages of technological innovations. Phase II contracts, limited to the most effective Phase I awardees, bring innovations to the full prototype or market-ready stage. And Phase III (which utilizes non-SBIR funding, generally from the private sector) commercializes the technology. NSBA believes that SBIR Phase III should be further strengthened by Congress, utilizing best practices from the most successful SBIR commercialization efforts in the past.

Participating SBIR firms must employ the principal researcher and less than 500 employees in total. It also must be American-owned, independently operated, and for-profit.

Despite calls from some quarters for a relaxation of these criteria, NSBA remains a staunch advocate of their continued application—believing that SBIR was intended as a means to advance the R&D efforts of actual small businesses and not larger or nonprofit entities, which already have access to far greater sources of federal R&D funds.

SBIR is a fully competitive program, imitated by countries around the world and praised by every independent third-party evaluation it has received. NSBA urges Congress to build upon the tremendous success of the SBIR program by reauthorizing and strengthening the program.

is unable to work due to a serious health condition. FMLA applies to employers who have at least 50 employees.

The late Sen. Ted Kennedy (D-Mass.) and Rep. Rosa DeLauro (D-Conn.) introduced the Healthy Families Act (S. 1152/H.R. 2460) in 2009 that would require employers with 15 or more employees to provide one hour of paid sick leave for every 30 hours worked by an employee. An employee’s sick time would be accrued as of the date of hire up to seven paid sick days in a year. Employees would be entitled to claim their days when they or a child, a parent, a spouse or someone else close to them became ill. Under the Healthy Families Act, 28 percent of business owners fear that productivity would decrease. Furthermore, 25 percent of respondents expect the per-employee cost of complying with the Healthy Families Act to exceed $1,000—for a business with just 15 employees that would mean at least $15,000, not counting lost productivity.

That is at least one full time job that can’t be added.

Paperwork and legal requirements have overwhelmed small-business owners, who, prior to FMLA, often allowed employees time off without the government telling them how to do it. Perhaps the most troublesome outcome of FMLA expansion is stifling job growth, or the potential that smallbusiness owners would hesitate to grow, especially if it means having to give paid leave to all employees via a one-size-fitsall policy.

NSBA urges Congress to oppose any move that would hinder an Mandatory Employee entrepreneur’s ability to create jobs—something an Leave expansion of the Family Medical Leave Act (FMLA) of 1993 [P.L. 103-3] or other proposals to mandate employee leave surely would do.

A number of proposals to lower the employee threshold for FMLA compliance, or mandate leave policies, both paid and

With America’s entrepreneurs — existent and aspiring — suffering through a crippling Access to Capital credit crunch, NSBA believes that Congress should do everything within its power to encourage and expand smallbusiness lending.

According to a recent Treasury report, 11 of the top TARP recipients cut their small-business loan balance by more than $2.3 billion in December, marking the eighth consecutive month (at least) of constriction by these banks.

The lending programs at the SBA also were down dramatically in Fiscal Year 2009. Overall, the SBA approved 36 percent fewer 7(a) loans in FY 2009 than it did in FY 2008.

The dollar volume of these loans also fell precipitously. In FY

unpaid, have surfaced in the 111th Congress. All of these would slow or stop job-creation and growth of small businesses at precisely the time when we need it the most.

Currently, FMLA requires employers to provide employees with up to 12 weeks of unpaid leave in a 12-month period. FMLA leave provides employees extended time off for the birth or adoption of a child; care for a spouse, parent or child with a serious health condition; or when the employee

2007, the SBA approved $14.29 billion worth of 7(a) loans.

In FY 2008, the dollar volume dropped well over a billion dollars to $12.67 billion. Unfortunately, that decline pales in comparison to FY 2009, when the SBA approved only $9.286 billion in 7(a) loans.

There also was a prominent plummet in 504 loans, which are used to finance real estate and other fixed assets purchases.

Only 6,608 loans were made through the 504 program in FY

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feature article 2009, down from 8,883 in FY 2008 and 10,669 in FY 2007.

The dollar volume of these loans also shrunk—to $3.834 billion. The SBA approved $5.29 billion in 504 loans in FY 2008 and $6.3 billion in FY 2007.

Congress’ single most important objective regarding the lending programs at the SBA should be an extension of the small-business provisions of the American Recovery and Reinvestment Act. While not a panacea for the credit crunch, the temporary elimination of the borrower fees for 7(a) and 504 loans and the up-to 90 percent guarantee have been instrumental in the recent uptick in SBA lending. It is vital that the authorization for these provisions immediately be extended through and sufficiently funded for all of 2010.

NSBA also supports increasing the maximum loan sizes for 7(a) and 504 loans, as called for in the Small Business Job Creation and Access to Capital Act (S. 2869/ H.R. 4302).

While many entrepreneurs would be delighted with a $50,000 or $100,000 loan, a sizable number of larger small firms require loans in excess of the current limits. Unfortunately, it is difficult to obtain small-business loans in the $1.5-$5.5 million range. The small-business members of NSBA believe that according such loans an SBA guarantee would greatly expand their availability.

Although it is typically thought of as a tax on individuals, the Alternative Minimum Tax Alternative (AMT) strikes harder at smallMinimum Tax business owners than at wage earners. Why? For starters, successful entrepreneurs tend to earn more, and 90 percent of small businesses have their profits taxed as personal income, regardless of whether the firm is organized as an S Corp., LLC, or unincorporated business. In addition, when an entrepreneur’s income carries him or her into AMT land, some business deductions are not allowed.

The AMT, which was created 40 years ago to ensure that high-income taxpayers would pay at least some tax, has failed at its original mission and now snags growing millions of middleand upper-middle-income Americans. The income threshold that qualifies one as wealthy was never pegged to inflation, so today taxpayers earning as little as $75,000 can run afoul of the AMT. Congress has approved patches, but has yet to tackle a long-term solution.

NSBA supports full repeal of the AMT, or alternatively, supports changes to lessen the impact on middle-income taxpayers. Because many small businesses are pass-through entities, their business income is reported as personal income, subjecting increasing numbers of small-business owners to this complex tax.

Credit cards are one of the most common sources of financing for America’s smallbusiness owners. According to NSBA’s 2009 Year-End Economic Report, 41 percent of small-business owners identified 18 2010NSBA_Advocate_Spring.indd 18

Credit-Card Reform

credit cards as a source of financing that their company had used in the previous 12 months. Although down slightly from previous surveys, credit card usage—like all other sources of financing—decreased likely as a result of turmoil in the financial markets and the cost of capital.

Although a key supporter of the credit-card reform bill that President Obama signed into law in 2009, NSBA remains very concerned with a glaring loophole: the absence of protection for some of the cards used by small-business owners.

Although the credit cards of many—if not most— entrepreneurs are based on his/her personal credit history, it is conceivable that issuers could legally consider them exempt from the new credit-card reform law. This is due to the law amending the Truth in Lending Act (TILA), which for the most part applies only to “consumer” and not business credit cards.

TILA defines a “consumer” as a “natural person who seeks or acquires goods, services, or money for personal, family, household use other than for the purchase of real property.”

While a small-business owner who opens a personal creditcard account and uses it occasionally for business should be covered under TILA, it is far from clear that this law will protect a small-business owner who uses his/her card exclusively or even primarily for business purposes.

Eighty-six percent of the respondents to NSBA’s 2009 Small Business Credit-Card Survey reported using their consumer or business credit-cards primarily or exclusively for business purposes.

While issuers historically have kept most of their small-business cards in compliance with TILA, there is no guarantee this convention will continue, especially when one considers that its basis appears to have been practicality and not legal obligation.

Accordingly, NSBA urges Congress to correct this oversight and extend equal protection to the small-business cards of employers with 50 or fewer employees. It is inconceivable that Congress would knowingly allow issuers to perpetuate—with impunity—practices recognized as “unfair” and “deceptive” against America’s small-businesses.

NSBA supports the Small Business Credit Card Act of 2009 (H.R. 3457), which would guarantee explicitly that the safeguards codified for consumers would protect the cards used by America’s small-business owners.

It is especially critical that small-business owners be equally protected given that 68 percent of the respondents to NSBA’s 2009 Year-End Economic Report confirmed that the rates and terms of their credit cards had deteriorated in the last five years.

The time has come to actively address America’s oil dependence and the shortcomings of its national energy policy. As small Energy Policy businesses produce more than half of the private sector output and consume nearly half of all of the electricity and natural gas used for commercial and industrial purposes in the U.S., it is imperative that America’s small businesses be comprehensively involved in this effort.

This national endeavor must not only protect small businesses, it must make full use of them. At the forefront of

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feature article the effort to provide energy solutions, drive economic growth, to increase significantly, back to its 2001 levels, stripping from create jobs, and protect the environment are innovative, small businesses any sense of confidence in their ability to entrepreneurial, and growing small businesses known as hand-down the family business. “green gazelles”. NSBA supports increased federal incentives Although NSBA has endorsed other estate tax legislation and funding to advance the research and development efforts (H.R. 3905), NSBA members put forth a five-point compromise of these small-business innovators. plan earlier in the year which would: establish permanent relief Although expanding U.S. domestic oil production will from the estate tax for small- and family-owned businesses do little to reduce the long-term strategic vulnerability caused and farms; exempt estates of $7.5 million with a tax rate set by its oil dependence, it is a short-term action that could help at 15 percent; tie the estate tax rate to the capital gains tax rate stabilize volatile energy costs and improve access. to ensure a more fair method of passing-down a business— It is imperative that the U.S. establish clear, long-term regardless of what event triggered the transfer; fully-index for goals for small businesses and consumers to use alternative inflation the estate tax; and include a step-up in basis, allowing and renewable energy. It is equally, if not more, important that heirs to use the higher basis to figure their gain when the the federal government fund research and create incentives, property is ultimately sold. such as investment tax credits, for renewable and alternative This compromise is necessary to make sure that small energy innovation by small firms. businesses can invest in the future and not in estate planning.

Transportation is the crux of America’s oil dependence: 97 percent of the oil used in the U.S. is consumed for NSBA supports measures to transportation. NSBA supports incentives for the use of allow the self-employed to fully more fuel-efficient vehicles and the continued exploration deduct their health insurance Self-Employment premiums on their income tax of alternative-fuel vehicles. NSBA views hybrid vehicle Tax on Health Care and their self-employment tax technology as exceptionally promising, and believes that this potential merits further exploration.

(FICA tax). Under current law, Improving America’s energy efficiency must be a central corporations are able to deduct component of any national effort to confront its energy the cost of health insurance premiums as a business expense and dependence. NSBA also supports efforts to expand current forego payroll (FICA) taxes on these costs. The self-employed, On-Bill Financing regulations—a proven method of providing however, are unable to take the same deduction. As a result, improved capital access they pay an additional 15.3 to small firms seeking percent tax on their health improved energy As a staunchly nonpartisan organization, and insurance premiums. efficiency. A recent NSBA America’s oldest advocacy organization for This is a heavy burden for study demonstrated that this group of small businesses, small business, NSBA looks forward to the small businesses could opportunity to work with lawmakers to help who already pay on average reduce greenhouse gas over $12,680 annually on craft a friendlier small-business agenda. emissions by 259 million health insurance premiums for tons each year—the family coverage. Eliminating equivalent of emissions from 51 coal-fired power plants—if this tax would reduce the average cost of health care for the selfthey improved their energy efficiency by just 25 percent. Firms employed by more than $1,940 annually. also could save $4,932—and oftentimes more—every year on This is why, Representatives Ron Kind (D-Wis.) and Wally their energy bills.

Herger (R-Calif.) along with Reps. Suzanne Kosmas (D-Fl.) and NSBA also supports the enactment of measures to increase Dave Reichert (R-Was.) have introduced the Equity for Our Nation’s the reach and visibility of the ENERGY STAR Small Business Self-Employed Act (H.R. 1470) a measure that would allow the selfprogram, including the reallocation of existing EPA and DOE employed to fully deduct their health insurance premiums for the agency funds to increase its budget. purposes of their income tax and self-employment tax (FICA tax).

Senators Jeff Bingaman (D-N.M.) and Orrin Hatch (R-Utah) have One-third of small-business introduced companion bill S. 725. owners today will have to Unfortunately, this deduction was left out of the new health sell or liquidate part of their reform law (H.R. 3590), but NSBA is actively working toward Estate Tax Reform business to pay estate taxes, passage of this legislation in order to remove a significant inequity and half of those who liquidate within the tax code that penalizes self-employed Americans and to pay estate taxes will have to makes it increasingly difficult for them to afford quality health care eliminate 30 or more jobs. coverage.

While the much-maligned estate tax rate has While these are the top priorities, as identified by smallgradually decreased since 2002 and the exemption level business owners, it is crucial that the 111th Congress and the Obama has increased—giving small and family-owned businesses Administration begin to take a 360-degree view of everything that some temporary relief—more needs to be done to protect impacts small businesses in addition to these issues. As a staunchly small business especially since as of Jan. 1, 2010 there is no nonpartisan organization, andAmerica’s oldest advocacy organization federal estate tax. for small business, NSBA looks forward to the opportunity to work Unless the 111th Congress acts soon, the estate tax is set with lawmakers to help craft a friendlier small-business agenda.

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Resources

Click Into Action

Increasing your knowledge and advocating for substantive Health Care Reform is as simple as a click of the mouse.

N

SBA has been a leading advocate for broad health care reform for the last decade.

While we did not support the recently-passed legislation, and will continue to work to make it better and more affordable for small businesses, NSBA is committed to providing our members with information and resources to help them understand the legislation.

Following passage of the bill, NSBA launched a new resource: Health Reform Today and Tomorrow: What it Means for Your Small Business. We redeveloped our Web site, www.HealthReformToday.org, to provide a clear, concise list of how the new bill will impact small-business owners across the country.

In addition to a detailed Frequently Asked Questions page that answers the most pressing questions small-business owners have about the new legislation, NSBA has provided a small-business-specific implementation timeline. That timeline details all the dates that will have an impact on smallbusiness health plans.

The site also provides a detailed list of resources where small-business owners can get more information on the broad, national implications of health care reform, as well as state and local resources offering critical information.

Please visit the Health Reform Today and Tomorrow Web site today.

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Member Profile

Meet The Small Business Advocate of the Year Whether it’s testifying before elected officials or sharing his story with reporters, Mike Mitternight has done it all -- all for the betterment of small-business owners across the country.

By Molly Borgan

NSBA was proud to honor Metairie, La. small-business owner Michael Mitternight as the 2010 Lewis I. Shattuck Small Business Advocate of the Year.

Mitternight was recognized among four other entrepreneurs during NSBA’s Annual Advocate of the Year Award Luncheon held Wednesday, May 26 in Washington, D.C. Mitternight is President of Factory Service Agency, Inc., a commercial air conditioning service and construction company that has been in operation since 1975. He has been dealt many blows in the past several years between Hurricane Katrina and the current economic slowdown, yet his optimism and pragmatic determination continue to drive him to succeed. Whether in his business or working on workforce development, education or health care reform, Mitternight has a fierce commitment to making sure the needs of small business are heard loud-and-clear.

In the last year, Mitternight testified before Congress on unemployment insurance provisions in the American Recovery and Reinvestment Act, and on small-business health care. He has made various lobbying visits with his Senators and Representative urging their consideration of small-business issues in key pieces of legislation, and has been an outspoken opponent of the Employee Free Choice Act. 2010 SPRING ISSUE

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Locally, Mitternight has been a force for small business. He served as the small-business representative for Sen. David Vitter’s town hall meetings in Louisiana during Congressional recess.

In 2009 alone, he testified six different times before various committees and subcommittees of the Louisiana legislature on key small-business issues, and has been very involved in regional workforce development efforts.

Mitternight has been extremely involved in myriad small-business organizations locally and nationally. In 2006, he served as the chair of the Louisiana Association of Business and Industry, and has served in leadership capacities for NSBA and NFIB. In addition to regularly testifying on the local, state and national levels, Mitternight has been a valuable resource for multitudinous reporters and has gotten the important stories about small business front-and-center.

He has been interviewed and quoted by the New Orleans Times-Picayune, the New York Times, CNBC, USA Today and Reuters

Lewis I. Shattuck award winner was a commitment to small-business advocacy, a proven history of volunteer activism on behalf of the small-business community, and success and growth as a small-business owner. Mitternight has been the embodiment of each of these criteria.

NSBA also recognized four other outstanding small-business owners as finalists: Donna Childs of Prepared Small Business, LLC in Jersey City, N.J; Harry Siegel of HMS Technologies, Inc. in Martinsburg, W.V.; David Stetler of Stetler Associates in Westlake, Ohio; and Bhupesh Wadhawan of Link Soloutions, Inc. in Reston, Va. Mitternight has an impressive history of activism and community involvement, and his commitment to ensuring that others are able to succeed as a smallbusiness owner is commendable. He is a tremendous asset to his community, to our organization and to small businesses across the country.

The Lewis I. Shattuck Small Business Advocate of the Year is presented during NSBA’s Annual Washington Presentation.

The criteria used in determining the ADVOCATE

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From the HIll

Putting the Issues Before the Politics

Staff Director and Chief Counsel of the U.S. Senate Committee on Small Business and Entrepreneurship Shares With NSBA What It Takes To Be Successful In Crafting Good Policy For America’s Small Businesses

by Dan Cravins Jr

T

here’s no doubt about it. Partisanship plays a role on Capitol Hill.

You read about it every day, Democrats and Republicans battling it out on various issues.

These partisan battles are not limited to the Senate or House floors. In many cases, partisanship divides members of Congress even at the committee level.

There is one exception however – the United States Senate Committee on Small Business and Entrepreneurship.

Over the past year, the Senate Small Business Committee has adopted several pieces of legislation aimed at supporting and rejuvenating small business. Every one of these bills has passed with bipartisan support. This bipartisanship is no accident. It is the result of good leadership. The committee is led by Senator Mary Landrieu, D-La., and is Senator Olympia Snowe, R-Maine.

Both Senators Landrieu and Snowe pride themselves on putting small business issues before political interests.

Senator Landrieu and Senator Snowe are currently working hard to pass comprehensive legislation targeted at small business job creation. At the

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core of this legislation are proposals focused on areas where there is the most potential for job growth for small businesses - lending, trade, contracting and entrepreneurial development. Most of these proposals have passed the Small Business Committee by a large bipartisan margin, and, for a modest amount, all of these measures will create hundreds of thousands of jobs in 2010.

These proposals, if enacted, would make key improvements to some of the Small Business Administration’s (SBA) most vital programs. Below is a list of the legislation: Small Business Job Creation and Access to Capital Act of 2009 (S. 2869): To provide small businesses with better access to capital and create jobs, S. 2869 would increase the loan limit cap on small business loans and allow for the refinancing of commercial real estate debt. These changes are expected to be budget neutral, would increase small business lending by $5 billion in the next year, and could create or save more than 200,000 jobs.

Small Business Export Enhancement and International Trade Act of 2009 (S. 2862): With less than 1 percent of small businesses currently exporting, it is critical that more of our small businesses become engaged in the global economy. S. 2862 seeks to provide small businesses with modernized trade financing and export counseling options that will allow them to more easily expand their businesses overseas at a time when customers at home have been tapped out. The bill will make more than $1 billion in export capital available to small businesses.

Small Business Contracting Revitalization Act of 2010 (S. 2989): S. 2989 makes key changes to federal contracting programs that will help to put more contracts into the hands of small businesses. As the largest purchaser in the world, the Federal Government is uniquely positioned to offer new and reliable business opportunities for small businesses. It is estimated that ADVOCATE

by increasing the number of contracts awarded to small businesses by just 1 percent, more than 100,000 new jobs could be created.

Small Business Community Partner Relief Act of 2010 (S. 3165): The SBA’s Women’s Business Centers (WBCs) and Microloan intermediaries provide critical assistance to underserved segments of the population to help them start and grow successful small businesses. Due to cuts in funding by state governments to universities and private entities that partner with WBCs and Microloan intermediaries, many of these organizations are struggling to raise their required non-federal matching funds. S. 3165 allows SBA to temporarily waive or reduce the non-federal share of its funding requirements, ensuring that centers are able to continue to provide importance assistance at a time when it is most needed.

SBIR/STTR Reauthorization Act of 2009 (S. 1233): The SBA’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, represent the most significant source of Federal research and development funding available to small business today. Twenty-percent of SBIR participants say they started their company in part because of a prospective SBIR award. S. 1233 reauthorizes the programs and increases the amount of Federal R&D funding available to small firms.

Chair Landrieu and Ranking Member Snowe are working hard to place these simple, yet effective, pieces of legislation at the core of the next jobs bill. You can help by supporting these pieces of legislation. Please consider contacting your members of Congress and asking them to support the Landrieu/ Snowe Jobs Package. Also, please do not hesitate to call on the Senate Small Business Committee for assistance. We can be reached at (202) 224-5175 or on the web at sbc.senate.gov. We are working to put the American people back to work.

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COUNCIL UPDATES

The Tides Of Change

SBEA Continues To Raise The Status Of Small Business Exporters

I

f you’ve read a newspaper or visited the White House Web site in the last few weeks, you’ve seen that exporting is big business. We at the Small Business Exporters Association are committed to raising the profile of, and level the playing field for, small business exporters.

Celebrating our 20th anniversary this year, SBEA has been the nation’s chief advocate on all issues affecting small U.S. exporters. SBEA’s anniversary is an opportunity to thank the individuals that have lead our organization through the decades to achieve remarkable success

– Marty Duggan, our tireless founder, demanded recognition of small-business exporters within federal programs; Dr. James Morrison, followed, making remarkable strides in legislation that would directly modify federal programs to ensure that small-business exporters were made a priority; more recently, Peggy Houlihan, a force within the exporting community, stepped in to transition SBEA and enhance the organization.

Now, through a reinvigorated partnership with NSBA, we have established a collaborative relationship with the board and staff at NSBA. Through these avenues, SBEA continues to have a very visible presence in Washington, D.C., and impact key exporting issues. In fact, SBEA and its members have recently been mentioned in several high-profile speeches from the administration on the National Exporting Initiative.

Ours has often been an uphill battle, with hard-won successes peppering our fights along the way. Recently, SBEA was instrumental in the approval of legislation that requires Export-Import (Ex-Im) Bank of the U.S. to commit 20 percent of their loan authorizations to small business. SBEA also has been a leading advocate for establishing

a dedicated small-business representative in U.S. Trade Representative’s office—a position which has recently been filled.

SBEA is the only organization of its kind, representing the issues of small and medium-sized exporters within the halls of Congress and the administration. In recent months, small-business exporting has gained increased notoriety within the administration and Congress as a critical piece of the puzzle to rebuild the U.S. economy. SBEA is positioned to use this opportunity for the benefit of raising the federal support of small business to that afforded big business.

In addition to enhancing our influence with lawmakers and regulators, SBEA will be producing monthly SBEA Newsletters which will be e-mailed to all SBEA members.

The SBEA Newsletter will include industry updates, intelligence on the latest legislative debates and any other policy news critical to small- and mid-sized exporters.

We greatly appreciate all the continued support we receive from all our members— SBEA and NSBA—and look forward to continuing our push for an exporting arena that is an open and accessible avenue for small firms.

A Continuing Resolution

SBTC Continues To Advocate Strongly For SBIR Reauthorization With spring upon us, the Small Business Technology Council has continued to focus on the fight on Capitol Hill to reauthorize the Small Business Innovation Research (SBIR) program. Currently the House and Senate reauthorization bills are in conference where the House and Senate negotiators continue to work on a compromise bill that can satisfy both sides.

This program has received more than six continuing resolutions (CR) since it was originally scheduled to expire back in 2008, and it looks like it is bound for another CR before the summer begins.

SBTC is hopeful that the two sides can come to a resolution sometime this year so that the tech-oriented small businesses that depend on this important program can continue to create new technological innovations and pay their employees without having to wonder if the SBIR program will be around next year.

Despite the stalemate on the reauthorization front, there has been plenty of action on the Hill with regards to the SBIR program.

Two different times, Rep. Jason Altmire (R-PA) attempted to get his version of the House SBIR reauthorization bill included in the various jobs creation packages. This would have effectively bypassed the negotiations between the House and Senate, and effectively nullified the Senate reauthorization bill. Fortunately, after receiving resistance 2010 SPRING ISSUE

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from small businesses opposing this plan, his proposals did not get enough support from the House leadership, and did not pass.

On a more positive development, a new bill has been introduced

by Rep. Paul Tonko (D-N.Y.) called the Small Business Innovation to Job Creation Act of 2010 (HR 4549). This bill would create a oneto-one competitive grant funding opportunity for recipients of SBIR Phase II funding from 2007 or 2008. This funding would be targeted at products that already have been developed, and would help bring them to the commercial market. SBTC endorses this legislation and asks all small businesses to contact their Representatives and have them cosponsor this bill.

SBTC also has been active in engaging current and potential members through two key events. The first was held on April 22, 2010 where SBTC hosted a meeting at the National SBIR Conference in Hartford, Conn., covering policy and legislative issues related to the SBIR program. The turn-out for that meeting was good and the discussion lively.

Additionally, SBTC is hosting a Washington, D.C. flyin in conjunction with the NSBA and their annual Washington Presentation. The SBTC fly-in will be held Thursday, May 27 at the Capital Hilton in Washington, D.C. Stay tuned to the SBTC.org Web site for more details.

ADVOCATE

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