The Biggest Kid On The Block

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A second Mandate shortcoming is that a two-valued choice, whatever the question, leaves no room to accommodate different interests within the association. Most NFIB members, too small themselves to use IRBs, are vulnerable to unfair competition from large chain retailers who abuse the tax-free bonds. Thus most NFIB members have nothing to gain, even from a reformed IRB program, and it's not surprising that they would vote no. A minority of NFIB members, on the other hand, could legitimately use IRBs without affecting the majority who don't. Majority rule in this case unfairly penalizes them.

The Mandate causes other problems for the federation. For example, the NFIB uses Mandate issues to select the legislative votes on which to base its "small business" ratings of representatives and senators. Last year in the House there were just four recorded votes on issues that had been polled in the Mandate, all of them relating to budget and tax cuts. Consequently, some House Democrats were apoplectic this spring when the federation announced its ratings for the first session of the 97th Congress. The NFIB had decided that a vote for Reaganomics was a vote for small business, and a vote for one of the Democratic budget or tax alternatives was a vote against small business. Not surprisingly, 90% of the House Republicans received 100% ratings; 71% of the Democrats scored zero.

"It was clearly a case of their wanting to give zeros to as many Democrats as possible and 100% ratings to as many Republicans as possible," fumes Rep. Norman D'Amounts (D-N.H.). "It was purely partisan." Within weeks of the NFIB ratings, Rep. Byron Dorgan (D-N.Dak.) had already heard from some constituents about his zero score. "That obviously isn't very helpful to those of us who consider ourselves strong small business advocates," says Dorgan.

The federation, as one writer put it, may have shot itself in the foot with this rating. "Like a whole lot of members, I'm not interested in cooperating with people who then turn around and do something like this to you." Dorgan adds.

Whatever its shortcomings, the Mandate does give every NFIB member a chance to participate in the association without expending time and money that many small businesspeople can't afford. On average, according to Dick Fisher, 14% of the Mandate ballots are marked and returned. He wishes it were more, but considers 14% a "fair sample."

The NFIB's impressive, computerized data-processing system keeps track of which member votes and how often, and feeds this information to the federation's sales force. They use it, along with their annual sit-down sessions with each member, to identify business owners interested in becoming more active in the federation's work. These members are then nominated for NFIB's 10,000-member Action Council, the federation's real spear carriers.

When the White House asks the federation to supply some small business-people for a session with the President, they're drawn from the Action Council. Some council members are polled when NFIB lobbyists need an association position on an issue that hasn't appeared on the Mandate. Action Council members form the association's offensive line when it wants to lobby on specific issues. And increasingly, Action Council members are being asked to replace the association's paid lobbyists in testifying before congressional committees.

Unlike the National Small Business Association (see INC., May, page 131), its principal rival as small business's chief Washington lobby, the NFIB doesn't hesitate to form alliances with big business interests. It worked closely, for example, with the U.S. Chamber, the National Association of Manufacturers, and the Business Roundtable in drafting what eventually became Ronald Reagan's plan to simplify and accelerate asset depreciation schedules. Federation officials agreed in February 1981 to contribute $50,000 of members' money toward a campaign to promote Reagan's economic recovery program. That campaign was later canceled, so the contribution was never made.

The NFIB's close association with the hired guns of the country's biggest business organizations causes concern for some small business lobbyists. "It tends to blur the distinction between big business and small business," says one, who adds, "I think NFIB gets romanced by the big guys." But Allen Neece, who represents Small Business United, a coalition of regional small business groups, points out that in working closely with these powerful business interests, "Mike McKevitt was playing in the big leagues. He was the only guy on the inside speaking for small business, which had never been on the inside before."

The NFIB's enthusiastic support for Reagan's depreciation reform and personal tax cuts gave it easy access to the White House and key Administration officials. But, relying on its Mandate votes, the federation has parted company with Reagan on other issues. It opposes, for example, his enterprise zone plan for aid to urban areas. NFIB members recently voted 63% to 27% against the continuation of safe-harbor leasing.

Alliances, whether with an administration or other business groups, are difficult for the NFIB to sustain for long. Other associations, the NFIB explains, aren't bound by the Mandate vote. So the federation sometimes finds itself on the other side of the issue from other small business associations. Its opposition to the continuation of IRBs is one example. Another was its opposition two years ago to the creation of small business development centers at colleges and universities around the country. Recently, while other groups testified to the need for continued Small Business Administration assistance in capital formation, the NFIB urged Congress to slice SBA loan funds by 25% as part of the Administration's general budget-cutting program.

NFIB president Wilson Johnson says he'll rely on the marketplace to sort out who's doing the best lobbying job for small business. And if success is measured in membership sales, the NFIB is well ahead of its competitors.

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