A Small Businessman In Congress

Berkley Bedell built a thriving company that makes fishing tackle. Then he went to Congress to do something about the state of free enterprise.

In northwest Iowa, where Berkley Bedell was born and reared, he's a legend. But not so much because he has represented the area in Congress since 1975. Long-time residents think of Bedell -- now 60 years old -- as the "boy wonder" who started a fishing tackle business in his parents' home at age 15 and built it into Berkley and Co., a $25-million operation today.

Like any small businessman, Bedell had to conquer one hurdle after another to succeed -- and he did. He's still chairman, and one of his sons is a top executive with the firm. But in Congress it's been a somewhat different story for the lifelong Republican who became a liberal Democrat after age 50, and started a radically new career at age 53 when he took his seat as a U.S. Representative from Iowa's 6th District.

"I was always able to snap my fingers and things happened at my business," Bedell says. "People told me I'd be frustrated in Congress. But I think I've handled it well. Educating people can take a long time."

What Bedell wants to teach Congress is simple: "We're moving toward a society dominated by a small number of large corporations, and it has become more and more difficult for the small entrepreneur to exist in our economy," Bedell says. "I think the real problem is that the big fish are getting bigger and there are fewer small fish. We're going to end up with nothing but big fish in our pond. That's as clear as I can see if present policies continue."

So far, Bedell has had little success combating the trend, though he chairs a House small business subcommittee with jurisdiction over energy, environmental, and safety issues. But he is able to call hearings and support legislation that might make a difference in his crusade.

And at every chance he gets, Bedell tells Congress what he thinks about its policies on small business, often falling back on his experience running Berkley and Co.During a hearing on how conglomerate mergers affect small business, for example, Bedell challenged an academic expert who said that many small businesspeople start companies with the thought of selling to larger firms.

"I come with some prejudice because that's exactly what I've done -- started a business myself," Bedell retorted. "I hardly know of anyone who, when he starts a business, starts with the thought of building it up to sell to a larger company. I just may not know the right people. If that's what our society wants, it's pretty scary."

It would help, Bedell says, if more members of Congress had a small business background. "I think there's a real need for some business experience in government," he says. "In business you have to demand efficiency, performance, accountability. And one of the big problems is that there aren't such pressures on government organizations."

Bedell's call for more small business congressmen is being heeded to a degree: The National Federation of Independent Business this year counted 32 new members of Congress with small business backgrounds, the most ever in a freshman class. But Bedell worries that the numbers are unlikely to grow.

"It takes lots of time and money to run for office, and generally small businesspeople are involved just trying to survive in business," he says. He ran for Congress "only because I could afford to take about six months off from my business to campaign, and because I put $25,000 of my own money into the campaign. Today that would probably be $50,000. I couldn't have done it otherwise, and that's an indictment of our system." Bedell has voted for public financing of House races, but so far that proposal has died in each session of Congress since he's been in office.

But if Congress doesn't understand small business, Bedell says, small business doesn't understand what it needs from the federal government either. "They're satisfied with government loans and other Band-Aids," he says. Bedell is amazed that so many small businesspeople think that whatever the Chamber of Commerce or the Business Roundtable say is good for business is therefore good for small business. On the Reagan Administration's tax cut, which Bedell opposed, he notes, "Most small businesspeople I talked to supported the plan, thinking it would really help them. They seemed surprised when I said I thought most of the benefits would go to only a few corporations." They also misunderstood other effects of the tax cut, he says: "Maybe the major problems small businesses face are inflation and high interest rates. The size of the tax cut probably means continued inflation and high interest."

Bedell has parlayed his business experience and doggedness into some victories Earlier this year, the Reagan Administration wanted to lower Small Business Administration loan guarantees from 90% to 70%. The proposal found support among House and Senate Republicans. But conversations with small businesspeople and bankers convinced Bedell that lenders would withdraw from the SBA program rather than assume an increased risk. Working with lobbyists from the Independent Bankers Association of America, he won over his colleagues in the House. Then, in a conference committee with intransigent senators, Bedell forged a compromise, keeping the guarantee at 90% for loans under $100,000 and keeping open the possibility of up to 90% guarantees on larger loans.

"Nowhere along the line had anyone at the SBA or the Senate gone to small bankers and asked them what the change would mean," says Marc Rosenberg, Bedell's subcommittee staff director. "Berkley did." Bedell's business background gives him a practical bent lacking in many congressmen, especially the 50% who are lawyers, Rosenberg says. "The lawyers in Congress say, 'There's a law already on the books.' Berkley asks, 'Yeah, but will it work?"

Bedell's legislative proposals, too, are grounded in this real-world knowledge of small business. He recently publicized a multipoint plan for changing tax policy so small businesses can generate enough capital internally to grow, keeping them from having to merge with larger firms. One of the points would ban newly acquired subsidiaries from assuming the parent company's tax status.

"This would discourage a company with a poor earning record from acquiring a healthy, profitable company solely to use its earning stream," Bedell says. "This change would also correct competitive problems that occur when an acquired company uses its parent company's tax status to gain advantages over its still small competitors."

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