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Policy Matters: Life (and Congress) As Classroom
a weekly column
by Dawn Rivers Baker
Sometimes, it can be sad-but-funny to watch when ideology comes face to face with reality.
I got to witness a moment like that when I reviewed the video archive of that House Energy and Commerce subcommittee hearing I mentioned in one of this week's articles.
You see, small business owners are supposed to hate taxes. All you have to do is mention the word to them, and their hair is supposed to catch fire and their heads explode shortly thereafter.
The only problem with that theory is that small business owners are generally profoundly practical people. When admirers start waxing lyrical about the American Dream, they sometimes forget that this particular dream requires the dreamer to have his or her feet firmly planted on the ground.
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This week's news briefs
Senate Panel Reviews Small Business Health Costs
In its way, it's kind of funny that so many members of Congress have suddenly become indignant about the plight of small businesses in the health insurance marketplace when the small business owners themselves (as well as both Small Business Committees) have been jumping up and down and yelling about that very thing for decades. Last week, a few days before the House passed its health reform measure, the Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing to look into increasing health costs facing small businesses, descriptively entitled "Increasing Health Costs Facing Small Businesses."
The witnesses included a representative state insurance commissioner (who enacted the role of insurance industry apologist), an actuary, and a couple of health care economists/policy wonks from the pro and the con side. There were even a couple of actual small business owners invited to testify. The small business owners, in typical pragmatic fashion, were fairly non-partisan in their approach to their remarks. One of them said that reform efforts need to include creating a better product and lowering costs, while the other begged lawmakers to get the burden of providing health insurance off the backs of small business owners altogether. In the end, since none of the insurance companies invited to testify accepted that invitation, Committee Chairman Tom Harkin (D-IA) announced that he was launching an investigation into industry policies and practices. Whether that investigation will be concluded before the Senate votes on a health reform bill is questionable.
Sluggish Economic Recovery Seems Underway
All things considered, reaction to the news that the economy grew 3.5% during the third quarter of this year was greeted with relatively little fanfare. Perhaps the most interesting thing about the sudden spike in gross domestic product is the fact that it primarily reflects a sizable increase in personal consumption, which is explained, in part, by the now-defunct "Cash for Clunkers" program. It is also interesting to note that consumer confidence has been slipping since May, when people began to notice that the American Recovery and Reinvestment Act had failed to produce the miracle so many expected. Even now that there have been scattered showers of economic good news for some months, consumers are unimpressed for as long as the job market remains in the tank.
As for the small business sector, the National Federation of Independent Business (NFIB) reports that optimism has been slowly and painfully climbing for much of this year, although last month's gain in the index was slight. As of September's survey, quarterly profit trends and reported capital spending plans remain at historic lows. More business owners plan to cut jobs and reduce inventoris than will hire or invest. Almost twice as many expect sales volume to decline as expect it to improve in the coming months. All of which suggests that nothing has happened to adjust the economic catch-22 otherwise known as a jobless recovery. And that, in turn, means that nothing has happened to stem the probable tidal wave of new microbusinesses that are almost certainly forming at this every moment.
Working The Kinks Out Of Broadband Deployment
Late last month, the House Small Business Committee held yet another oversight hearing involving the American Recovery and Reinvestment Act (ARRA), this time focusing on the investments called for in the bill into nationwide broadband deployment. Broadband deployment is particularly important for microbusinesses, which tend to be heavily reliant on a variety of Internet-based technologies as cost savers or as a substitute for staff. Besides all that, broadband deployment presents great opportunities for small and mid-sized operators — particularly since, evidently, larger carriers such as Verizon and Comcast have decided not to compete for the grants and loans available through the ARRA.
It soon became clear under questioning from various members of the Committee that there were any number of administrative issues with the grant and loan applications that needed to be worked out. The two Administration witnesses indicated that their respective agencies planned to solicit feedback from applicants in order to make improvements to the next round of applications. Given the scope of the problems uncovered in this hearing and the optimistic but rather unrealistic time-line put forward by both Mr. Strickling and Mr. Adelstein, no doubt the Committee will need to revisit the ARRA broadband deployment initiative. It is fairly important for everybody involved to get this one right. If they get it working, the program presents one of the best opportunities for small and microbusinesses yet to emerge from the Obama Administration.
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