Four Measures that Must Come Out of the Stimulus

In an Open Letter to Congress today, I outlined four measures that cannot be included in the "economic stimulus" package. These provisions (that were either part of the House or Senate-passed bills) would burden small employers or lock entrepreneurs out of benefitting from the possible contract work provided by the package.

Of course, the letter reiterated our members' concerns about the overall effectiveness of the stimulus bill. And added that "the final measure certainly should not impose new burdens on entrepreneurs or erect barriers if they wish to bid on contracts that will be made available by the package."

SBE Council recommended the following items be removed from, or altered within, the final negotiated package in order to ensure that the stimulus is more inclusive of, and does not hurt, small firms.

Big-COBRA: The new mandate in the stimulus package requiring employers to extend the period of COBRA eligibility for workers with ten years of service, or anyone fifty-five years of age until they find a new job or enroll in Medicare will hurt many small to mid-size firms. Imposing long-term requirements and costs upon small to mid-size firms is not fair or practical during any period - especially during a recession. The new COBRA mandate - extending eligibility and its general expansion -- must be removed.

E-Verify Mandate: Requiring small firms that wish to work on projects stemming from the stimulus to use a program that has documented problems will be burdensome and costly. The E-Verify mandate must be taken out of the stimulus bill as it erects barriers for small firms who plan to bid on contracts. Already, small firms remain at a competitive disadvantage in the federal procurement space. Establishing another costly barrier works against helping small firms during the economic downturn.

Davis-Bacon Expansion Provision: It is an established fact that Davis-Bacon makes it more difficult for small contractors to effectively bid on government contracts. It's a discriminatory measure that works against minority and women-owned firms. Mandating that all contracts provided by the stimulus adhere to the prevailing wage framework will lock many small businesses out of the bidding process for these contracts, raise the cost of these projects and limit the number of jobs that will be created or saved. The Davis-Bacon expansion requirement must be scaled back.

"Made in the USA" Amendment: Small businesses dominate in trade. Many small businesses are weathering the economic downturn due to overseas business and sales. Including a "domestic steel only" provision in the stimulus package will be impractical and complex to implement. It also sends a conflict-ridden message to our trading partners around the globe, which will hurt many entrepreneurs who engage in trade or plan to go global. This protectionist measure has no place in the stimulus package.

There is a lot of spending and other measures that have no place in this package -- like the establishment of a National Health Care Board, and $20 billion that will go toward the establishment of a federal database to store the medical records of all Americans. Shouldn't these critical issues involving privacy and health care be openly discussed in a debate over health care reform?

Yes, this package is massive. It certainly shouldn't burden entrepreneurs, or place them at a competitive disadvantage if they wish to meaningfully participate in the infrastructure and other spending initiatives.

Karen Kerrigan
President & CEO

Is Small Business Represented on Obama's New Economic Advisory Board?

President Barback Obama just named an outside advisory group to help him find solutions to restore the economy. Will the voice and views of entrepreneurs be represented within this new economic brain trust?

This AP/ BusinessWeek.com column goes into some detail about the new advisory group. Labor unions, corporation CEOs and former government folks are well represented. And it appears that the other individuals, who are successful business people in their own right, are connected to Obama in that they supported him during the campaign season (Penny Pritzer was his Finance Chair, for example).

According to the article:

"Obama has already tapped Paul Volcker, a former Federal Reserve chairman and a top Obama adviser, as the leader of the Economic Recovery Advisory Board. Members will include former Securities and Exchange Commission Chairman William Donaldson, TIAA-CREF President-CEO Roger Ferguson and Harvard University professor Martin Feldstein, who wrote a Wall Street Journal op-ed piece last year titled 'John McCain Has a Tax Plan To Create Jobs.'

"Obama friend and campaign finance chairwoman Penny Pritzker also is on the board, as is Caterpillar Inc. Chairman-CEO Jim Owens and General Electric Co. CEO Jeffrey R. Immelt. Two labor officials -- Anna Burger of Service Employees International Union and Richard Trumka of the AFL-CIO -- also were named to the 15-member board designed to offer Obama advice as he seeks a way to weather the crisis and rebuild the economy."

So, is this merely another advisory group that will tell the President what he wants to hear, or one that will provide solutions not currently included in the "stimulus" package that small business owners need and support?

Karen Kerrigan, President & CEO