Who Loves You More? A Debate Between Partisans

GOP: What's good for America is good for small business. Democrats: What's good for small business is good for America.

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On February 17, 1983, Richard Richards, until two weeks earlier chairman of the Republican National Committee, and Berkley Bedell, a Democratic member of the House of Representatives from Iowa, debated before members of the Small Business Legislative Council, a consortium of trade associations. The question was: Which party, Republican or Democratic, is the better friend of small business?

RICHARDS: Historically, the Democrats have concluded that they could resolve this country's problems by smothering them with money. With the Democrats' solution we got more and more government, and more and more regulation. The Republican party, on the other hand, has traditionally believed that private individuals and private enterprise, left alone, can resolve the problems we face in this country. I think this basic philosophical difference makes us a better friend of small business.

The problems in America today obviously are high unemployment, high interest rates, and, before Ronald Reagan, inflation. We didn't get there overnight, and I think that's the No. 1 point . . . It took a long time for the economy to get in the shape that we were in when Ronald Reagan became President. The primary culprit was too much government, too much government spending, and too much regulation -- all the handiwork of Democrat-controlled Congresses . . . I lay this problem at the door of the Democrats primarily because they have controlled the Congress of the United States during 44 of the last 49 years.

Small business, through their delegates to the White House Conference in January 1980, recommended that we do something to get at the real bogeyman of this problem of inflation and regulation, which is government spending. Ronald Reagan and the Republican-controlled Senate passed a constitutional amendment to limit spending to keep the budget in balance. It failed in the Democrat-controlled House of Representatives.

Small business also asked for tax relief. Delegates wanted to reduce the 70% personal income tax to a maximum 50%. Ronald Reagan, the Republican-controlled Senate, and the House of Representatives, with the help of some of the Boll Weevils, were able to do that in the tax bill of 1981. Small business asked us to change the estate laws to ease the burden on family-owned businesses and encourage the continuity of family ownership. Ronald Reagan and the Republican party responded by changing those tax laws. Small business asked for greater opportunity in federal procurement and a way that they could get paid more promptly for the work that they do, and of course the Republican Administration responded in that regard.

Today one of the most telling ways to see who our political friends are is to look at where the money comes from. Organized labor political action committees [PACs] give 94% of their political dollars today to Democratic candidates. Organized business PACs give 66% of their money to Republican candidates. Now I don't think that is mere coincidence. I think labor gives its money to those who carry labor's water, those who do labor's bidding in the legislature. Those are the Democrats, and those who are doing the bidding of organized labor can hardly say that they're the friends of the small businessmen and -women in this country.

Now, there are a couple of things that I think are important. Admittedly, when we made cuts in the rate of growth of this government we cut across the board. We cut some things that may have helped small business; we cut things that helped people on food stamps; we cut things that helped people on student loans; we cut things that helped big business, and we cut things that caused the bureaucracy to grow. But the biggest problem we faced in this country in 1980 was big government and a budget that was out of control; that caused inflation to go from 6% when Jimmy Carter was elected President to 12% during that four-year period; that jacked interests rates all the way from a 6% or 7% prime up to 21%.

The problem was very simple: If we didn't get the budget under control we would not get inflation down; if we did not get inflation down we would not get interest rates down. We made cuts, and the President said everyone is going to have to share in some of those cuts. Maybe small business did get some of the cuts. I'm not going to try to defend that.

We took on the question of tax cuts across the board for American business and individuals. It was for big business. It was for little business. It was for rich people, and it was for middle-class people, and we've been kicked around since that time because a rich taxpayer got more money back than a poor one did. The fact of the matter is the rich one paid more and he got more back. They both got the same rate.

Let me ask you this question: When did poor people create jobs for poor people in this country? When did poor people feed poor people? What was happening in this country was that we were discouraging business from investing its money in job-creating activities because we had a lid on how high profits could be. We had oppressive regulations. We had all kinds of problems that business had to face to make a profit. At the same time you could put your money in certificates of deposit for 12% or 14% or 16% guaranteed, and you didn't even have to do any work. This Administration said there's something wrong with that kind of tax law, and we changed it. And we changed it the way small business wanted it changed. The Democrats came in kicking and screaming. They didn't talk about tax cuts before Ronald Reagan ran for President. They fought it every inch of the way. They fought the estate-tax reform we were talking about. They fought the Social Security reform we were talking about. They fought all of the things that this Administration did to bring down the rate of inflation.

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