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LEGAL ISSUES

What Do We Do Now?

FaxPoll results on what President Clinton can and should do to help small businesses.
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Results of the January FaxPoll
An open letter to President Clinton from the small businesses of America: Hey, Bill! Want to help the economy? Help small business. How? Read on

How should the president prioritize the national agenda?

Issue % of respondents indicating issue is urgent

The federal deficit 81%
The economy 71%

Education 66%

Health-care reform 63%

Welfare reform 55%

Crime 53%

The drug problem 47%

Legal reform 44%

The trade deficit 42%

AIDS 37%

Entitlements 33%

The environment 31%

Foreign policy 30%

Term limits 30%

Care for the elderly 26%

Homelessness 23%

Race relations 15%

Capital punishment 12%

Abortion rights 10%

Sexual harassment 5%

Gay rights 3%

* * *

This poll got our highest response rate ever. In fact, the total response was about three times what we usually get. Obviously, the chance to get the new president's ear, albeit indirectly, is of great interest to you.

If the response to our March 1992 FaxPoll is any indication, most of you didn't vote for Clinton. At that point, only 5% of you reported that you intended to. (See the results of "Enough Already!" published in June 1992, [Article link].) There aren't a lot of FOBs (Friends of Bill) out there in Inc. Land. In fact, in the January poll, a number of you said that the best thing Clinton could do for small businesses is resign. Well, at the time of this writing, that seems unlikely. So what are the alternatives?

There was a palpable sense of urgency in your comments. "Do whatever it takes. End the gridlock. Do something!" Many called for Clinton to live up to his campaign promises. "The priorities you defined got you elected -- now stick to them." Many showed frustration with the political process. "Don't allow your advisers to talk you out of your program, unless you want to be a one-termer like Bush." Don't focus on getting reelected. And above all, don't waffle. "Put the good of the people above what's good for your career."

To help this country get back on track, you said, we need to get away from all the political business as usual. "Government needs to manage for the long term. Unfortunately, politics centers on the short term." We need to get beyond the counterproductive partisan politics. "Get the two parties to work together, for once." Also, Clinton shouldn't allow his policies to get too fragmented. "Stop listening to special-interest groups. Do what is right from the macro perspective." Respondents indicated that economic issues were of greater urgency than social issues, which is ironic, given what Clinton's first few weeks as president seemed to focus on. But to a certain extent, many of the "social" issues could be considered economic as well. Education, for instance. A better education system will mean better workers, greater productivity, and a better economy. "The public schools are a disaster, crippling our ability to do anything else well." And the reason the environment may have ranked so low here is the economic drain many of you face in complying with regulations. Although the more strictly social issues -- such as race relations, abortion rights, and sexual harassment -- are certainly not without their economic consequences, most of you feel they just aren't what we need to focus on right now.

* * *

Which of the following should the president undertake immediately to jump-start the economy?

Reduce the size of the federal deficit 52%
Reduce/reform government regulations andcompliance 41%

Reduce health-insurance costs 39%

Award businesses tax credits for productive policies 39%(long-term capital investment, employeetraining, research and development, and so on)

Reduce/eliminate capital-gains taxes 36%

Reform the tort system to reduce frivolous litigation 34%

Make more low-interest loans available to small 29%companies

Improve the public education system 27%

Invest in the country's infrastructure (communications, 25%transportation, and so on)

Ease credit restrictions 14%

Restrict foreign competition 10%

* * *

What do we need to focus on? The economy, stupid. "Virtually every benefit we enjoy is fundamentally driven by economic vitality and opportunity." What specifically should the president do for the economy? The bottom line in the data here, as well as in all your comments, was the federal deficit. Proclamations were rather dire. "None of us will survive if the president and Congress don't take immediate steps to reduce and eliminate the deficit." Why is the deficit the big issue? "The deficit we built in the 1980s is now the monster eating at our ability to invest in education, infrastructure, and small-business growth." Dealing with the deficit, you said, will enable us to deal with everything else. "A disciplined approach to deficit reduction -- using both new taxes and budget cuts -- will do more for the economy than any 'stimulus package.' " Many admitted that this endeavor will not be without sacrifice. "Hold nothing sacred -- not even Social Security."

* * *

If you could sit down with President Clinton and tell him what your business needs to survive and grow, what would you say?

Reduce regulation 28%
Increase availability of capital 22%

Reduce the deficit 18%

Lower taxes 17%

Improve the economy 12%

Give tax breaks for investments 11%

Reform the health-care system 10%

Improve the education system 4%

Reduce workers' comp costs 4%

Reform the tort system 4%

Do nothing 3%

Lower interest rates 2%

Give less help to other countries 1%

* * *

Ultimately, what is good for the economy is good for small business; a rising tide lifts all boats. But conversely, most of you look to small business to stimulate economic recovery -- provided it is allowed to do so. There were some who asked for more and better governmental programs to encourage small business. "We need government support or sponsorship to start up and survive." But there were even more who said they wished the government would just get out of their way. "If the government hadn't gotten involved in the first place, we wouldn't be depending on it to 'save' us."

Save you from what? Onerous taxes and regulations, primarily. Before you do anything, President Clinton, "please evaluate the effects even a small tax increase would have on, or what one additional regulation would mean to, small business." Many of you feel that businesses are being asked to shoulder the burden for the entire country. "America will never prosper until the government stops treating business like a tax machine." That overdependency on business taxation is, you said, shortsighted. "No country ever taxed its way into prosperity." And it inhibits growth. "Give small business a tax break so we can invest money back into R&D and thereby create products and jobs." The government, you said, also seems to think it has the luxury to do what no small business, if it intends to survive, can afford to do: waste. "The government can't run in the black. Why should it put tight control on my success when I see no sign of its own control?"

Another major impediment to business growth, and by extension economic growth, is overregulation. "I spend too much time filling out forms, time that would be better spent finding new customers." "I want to spend my energies producing products, jobs, and profit, not jumping through governmental hoops." With regard to both taxes and regulations, one of you put it quite succinctly: "A small-business person is just a government employee without the benefits." Granted, a certain amount of regulation is necessary. But things, you said, are out of hand, in terms of both the amount of regulation and how it is enforced. "Overzealous regulators at all levels of government have created a situation where the government is our worst enemy." We need to foster an air of cooperation. "Government and business should be working together both domestically and globally, rather than adversarially."

Other than merely getting out of the way, is there anything the government can do to help your business? Well, money would be nice, in the form of increased access to capital. "It is nearly impossible for a responsible person to obtain money from any source, even in small amounts." "There is only one thing that stops a business from growing -- lack of cash." And then there's the specter of dramatically increasing health-care costs. "My employees are wondering where the hell their raises are. I just gave them to the insurance companies." "How many businesses must be lost before workers' comp and health insurance are brought under control?" It would also be nice to curb the rising tide of litigation. "Businesses are afraid to hire, to fire, or to invent or try anything new because of liability; there is no room for error, and errors are necessary to find what works."

Many admitted that it isn't going to be easy for any of us, but pleaded with the president to "get tough. America will take the medicine." It looks as if some of that "shared sacrifice" stuff has sunk in. "We need to get away from selfish questions like 'What do I need?' and make decisions about what is best for the common good." There's so much to do. And there are a lot of ideas on the table. Small businesses have much to offer to the debate, in terms of both the ideas and the means to bring them to fruition. One respondent filled the margins with pleas and suggestions, then ended his response with "I'd go on, but is anyone listening?" How about it, Bill? n

-- Christopher Caggiano

* * *

Note: Multiple responses account for total percentages above 100%

Last updated: Apr 1, 1993




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