Washington Does Something Good for Entrepreneurs
Is Washington, D.C. finally getting out of its own way?
It’s too soon to declare the nation’s capital fully functional, of course. But the budget deal reached Tuesday promises what no agreement since 2011 has even hinted at: a potential budget that could make it through both houses of Congress without the last-minute grandstanding and brinkmanship that’s recently been so damaging to Congress and the country. That can only be good for business, and especially for small business.
It’s worth noting what this budget deal doesn’t do: It doesn’t significantly reduce the debt, close corporate tax loopholes, reform expensive entitlement programs, or even fully end the sequester. And it doesn’t do anything to resolve another potential point of conflict--the nation’s debt ceiling--which may be reached by March. Plus, Representative Paul Ryan (R.-Wisc.) still has to convince the more conservative members of his party to go along with it. A vote on the deal isn't likely until Thursday.
But it does hint that just maybe, Washington can get back to the business of governing the country, which is clearly what entrepreneurs want. In a survey of fast-growth CEOs conducted by Inc and the Kauffman Foundation, 51 percent of respondents said that political gridlock in Washington was one of the most important factors preventing a strong economic recovery. Only “higher taxes,” at 52 percent, proved more ominous.
Politically, no one’s getting any traction with small business owners by refusing to compromise on the budget. When asked who’s to blame for gridlock in Washington, 48 percent of business owners put the blame on everyone equally. About 30 percent blame Obama or the Democrats, and about 20 percent blame the Republicans or the Tea Party.
“There are professional politicians who don’t see themselves as serving America. They see themselves as serving a political party,” says Steven Laine, president and CEO of Walnut Creek, Calif.-based consultants Future State, which has about $21 million in annual revenues. “They need to move things forward even if it’s not 100 percent in the direction they want. Some people seem to think that if they don’t get what they want, their job is to snipe. We need to cut that sh*t out.”
Optimism rises, faintly
Perhaps entrepreneurs saw the budget deal coming. The National Federation of Independent Business’ small business optimism index, released on Tuesday, ticked slightly upward in November, rising 0.9 points to 92.5.
About half of that gain was due to the fact that small businesses were active in the hiring markets last month, with 51 percent saying they had hired or had tried to hire. (That number is seasonally adjusted, so it’s not affected by part-time help brought on for the holidays.) But among NFIB membership, which includes more “Main Street” businesses than the Inc survey, outlook for the economy, and for their own businesses, is still dim. The NFIB’s optimism index has stayed within a nine-point range--from 86.4 to 95.4--since the recovery officially started.