It's Time For Conference Ii

The 1980 White House Conference on Small Business was probably the single most significant political event in small business' history. Why has the Reagan Administration waited so long to hold another?

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As the election year bandwagon begins to roll, some things are certain. One is that candidates from both parties soon will elevate small business owners to the same level in their campaign rhetoric as the tired, the poor, and the huddled masses. Each candidate will pledge his unflagging support of the small business community and promise to do all he can to stimulate job creation and economic growth in the small business sector.

Unfortunately, another certainty is that once Election Day passes and the government gets back to business as usual, entrepreneurs will be disappointed at the "help" they get from the officials they helped elect. That is because, however much lip service they pay to small business as the "backbone of the American economy," politicians still don't understand how the changes they make in economic policy affect small companies.

Nowhere is this more apparent than in the shaping of tax policy. Congress recently took action to reform much of the tax reform it enacted in 1981 on behalf of small business. Three years ago, in the name of small business, legislators increased estate tax exemptions, allowed for the immediate expensing of some capital investments, and raised the dollar value of used capital equipment eligible for investment tax credits. Recent reform of those changes effectively negates such provisions as small business tax aids. Likewise, this year's attempt to eliminate abuses of the small-issue industrial development bond program by large corporations will have the unintended effect of victimizing the approximately 90% of IDB users that are small companies.

Things like this happen because in Washington, where economic policy is often shaped by the demands of powerful political interests, the small business community has been viewed as too diverse and disorganized to be a real power. Consequently, when tough decisions are made, small business often takes it on the chin.

The first suggestion that things didn't have to work that way came in 1980 when, under the aegis of the Carter White House, a process began that brought together more than 35,000 entrepreneurs from all across America. In a series of gatherings culminating in the January 1980 White House Conference on Small Business, these people examined federal economic policy from the entrepreneur's perspective. And they made recommendations to Congress and the Administration about economic reforms that would help rejuvenate the small business sector.

The White House conference was probably the single most significant event in the short political history of America's small business movement. The conference process produced some remarkable results, the first of which was consensus: The more than 1,500 entrepreneurs at the conference eventually focused on 60 specific recommendations for legislative and administrative reform. That consensus agenda astounded the political experts, who remembererd that a similar attempt at a small business conference, held some 40 years earlier, ended in fistfights.

A second remarkable result is that, with the support of the grass roots small business community, Congress has enacted into law, either partially or completely, some 40 of those 60 recommendations. The Regulatory Flexibility Act and Equal Access to Justice Act were direct results of the conference. So was the landmark Small Business Innovation Research Act, which dramatically increased small business's access to federal research and development funds.

These actions prove, I believe, that out elected officials, regardless of their partisan interests, really can be sensitive to the best interests of small business when they are presented with a list of specific priorities supported by an informed, well-organized constituency. The conference process broke down some of the long-standing animosity between entrepreneurs and government leaders; it created some new leaders among entrepreneurs; and it opened new avenues of communication between members of Congress and these grass roots business "lobbyists."

Perhaps that is the single most important result of the 1980 White House conference: It helped to politicize the country's entrepreneurs. Small business owners, who previously may have considered themselves merely the helpless victims of economic policy, found that by coming together in a national forum and speaking with a unified voice they could help to shape that policy. Following the conference, small business advocacy groups, dedicated to following through on conference recommendations with their elected officials, sprang up all around the country. Many of these groups carried the conference concept to the state level, resulting in governor's conferences on small business in many states.

Given the tremendous success of the first White House conference, it is both confusing and disappointing that, four years later, President Reagan was so reluctant to repeat the process. The country needs to improve its international industrial competitiveness, and we still suffer from chronic unemployment. A stronger small business sector could alleviate both of those problems and more, but the White House, maybe because it already felt certain of its political support among small business people, for many months resisted committing itself to supporting a second session.

Congress took the initiative, just as it did during the Carter Administration. Both the House and Senate allocated some $5.6 million to the budget for fiscal year 1985 to support the convening of a conference before September 1986. Small Business United, a national network of local and regional small business groups (many of which were born out of the first conference), has made the call for a 1986 conference one of its highest priorities.

America's small business community needs another White House conference, and it can't come too soon. The President must not wait until the September 1986 deadline to start the process. Some of the most innovative recommendations of the 1980 conference (such as the creation of small business participating debentures, legislation for which has been slowly gaining support in Congress) have yet to be acted on; they need revisiting. Another attempt at comprehensive tax reform will begin in 1985, and small business input is absolutely vital to that process. Our federal contract procurement system faces reform, and the nation's competitive, cost-conscious entrepreneurs should play a role in that.

We know that small business is ready to support such a conference. We believe that our elected officials need the benefit of our organized insight to produce relevant and helpful small business reforms. A second White House Conference on Small Business can produce an agenda to benefit the country's economy, and the political points the President belatedly made by endorsing the idea didn't hurt him either.

So what are we waiting for?