Your small business advisory groups could make 1984 a memorable year for legislative issues.
Congratulations to you both. With the 1984 Presidential elections still more than a year away, you have already made the coming election season an historic one for small business. For the first time since I can remember, the two national political committees will go into the next campaign armed with their own small business groups. By creating these groups within the national committees, you have shown that you understand the importance of the small business constituency to your parties' futures.
When the second session of the 98th Congress opens in January, these small business groups will be in an excellent position to aid you in forming and evaluating legislative issues. The timing could not be better for some healthy party competition, cooperation, or a mix of both on small business issues in the government. It is these legislative issues that I would like to focus on in my letter to you.
By now there is almost a tradition of timing significant small business legislative advances with an eye toward two factors. First, such advances are most often made in the second, or preelection, session of a Congress. Further, it is helpful if the Congress is one in which the parties share control of the government, with one party in control of the White House and the other in control of one or both houses of Congress.
Thus, in 1953, the Small Business Act was passed by a Democratic Congress and signed by a Republican President. It was the congressional session directly before the 1958 election that enacted the Small Business Investment Act. The passage of the Small Business Innovation Act took place when both favorable factors were present. The Republicans had the Presidency and a majority in the Senate, while the Democrats controlled the House of Representatives. Both factors will be present again in the congressional session that opens in January.
Three major kinds of small business legislative issues are likely to be before the next session. There will be at least five or six "continuation" or "rear guard" actions. They will either improve or extend previously won advances or protect past gains from present or future erosion. A second type of issue is "process improvement," either for Congress or the Executive Branch. This sort of bill would make the federal bureaucracy more responsive to the needs of small business. Finally, there are the "big new gain" issues. The major possibility in this category is a group of bills that would open up federal procurement to a wider range of small businesses.
Another possible big-new-gain issue might be a bill to allocate more fairly the benefits of the 1981 tax cut so that small business will receive a proportionate share of the cut. Right now, with the deficit where it is, small business will not consider anything that adds to it a gain -- even if it looks like the beneficiary will be small business itself. That may not apply if there is a prospect of offsetting revenue gains.
It is my belief that legislative efforts are most needed where large-scale bureaucracy resists changes that may, or clearly will, help small business and new entrepreneurs. Small business has had bipartisan support ever since World War II. However, Republicans have always found it easier to support small business on economic issues that do not offend big companies. Democrats are more likely to be interested in small business issues that do not put them at odds with labor
But there are always plenty of party crossovers in Congress, and they are growing in number.
Carryover bills introduced in the first session provide examples of continuing action or reaction that can be taken. For example, Sens. Charles Grassley (R-Iowa) and Dennis DeConcini (D-Ariz.) are sponsoring a bill (S.919) to improve and make permanent the "Equal Access to Justice Act." This law allows small companies and individuals improperly harassed by government agencies to recover their legal costs if they successfully resist such actions. Its commendable goal is to discourage overzealous government lawyers and administrators from starting inappropriate actions. Congress was frightened into passing it for only three years by wild cost estimates that have since been proven false. It can, and should, now be made permanent.
Another example of a carryover bill is a new loan-guaranty set-aside requirement added to the Export-Import Bank's authorizing legislation. Rep. Andy Ireland (D-Fla.) led a successful fight to require the bank to use at least 6% of its loan authority for small business. Reps. Buddy Roemer (D-La.) and Marcy Kaptur (D-Ohio) fought hard for it; outspoken support from Reps. David Dreier (R-Calif.) and Bill McCollum (R-Fla.) made it a bipartisan victory. Sens. Rudy Boschwitz (R-Minn.) arid John Glenn (D-Ohio) have said they will fight for a version of it in the Senate.
The Regulatory Flexibility Act is a prospect for the "process-improvement" category. The present law was introduced by Ireland and later co-sponsored by more than 200 members of the House. Federal agencies have slowly begun to learn from it about the need to apply regulatory burdens that are scaled to the size of different businesses. There is no legislation pending yet to strengthen the RFA, but it is likely to be offered in the second session. Applying the RFA unequivocally to agencies that still resist it, and mandating a clearer enforcement role for the Small Business Administration's chief counse for advocacy, are being discussed by members of both Houses.
When you read this, Congress will still be in its first session. Thus far there is no big-gain issue, one that clearly affects the whole small business community, or a very large share of it. The best preserit prospect for a big-gain issue coming out of the first session is a double play made up of two bills dealing with different aspects of federal procurement. One (S.1746) is called the "Freedom from Government Competition Act of 1983" and was introduced by Sen. Warren Rudman (R-N.H.). The other (S.1730) is called the "Small Business Competition in Contracting Act of 1983," and was introduced by Sen. Alan Dixon (D-Ill.).
