'Isn't Anybody Back There Listening?'

Sen. Robert Bennet (R-Utah) chastises his colleagues for the damage they have done to small business in U.S.

Visit the Inc. 500 site, which includes a fully searchable database of winners from 1983 to the present

Republican senator Robert Bennett of Utah is one of the few people in Congress who can speak from personal experience on the subject of growth companies and job generation. We first met Bennett in 1991 at our annual Inc. 500 conference. At the time, he was chief executive of Franklin International Institute (now called Franklin Quest), a Salt Lake City- based company that publishes day planners and holds time-management seminars. Bennett had taken charge of the business in 1984, while it was still in its infancy. When he left in 1991, it was doing about $82 million in sales and employing roughly 700 people.

I ran into him last fall in Salt Lake City, where he was engaged in a hotly contested Republican primary for the Senate seat vacated by former astronaut Jake Garn. Bennett won and went on to defeat Democratic nominee Wayne Owens. I recently had lunch with Bennett in Washington, D.C. When I asked him how his first months in office were going, he gave me a copy of a speech he had delivered to the Senate.

* * *

The only former Inc. 500 CEO in the U.S. Senate tells Congress what it is doing wrong
By Senator Robert Bennett (R-Utah)

* * *

Excerpts from a speech delivered on the floor of the U.S. Senate, as recorded in the Congressional Record of Wednesday, July 14, 1993 (edited).

* * *

Senator Bennett: Madam President, I rise today for several reasons. One, it's an anniversary; I've been in the Senate roughly six months, and I think that perhaps at this time I might make a review of the first six months of my career here. Two, because during the recess I had a question asked me that I think summarizes the first six months, and the two come together, and I'd like to talk about that for a bit.

I was with a small-business man who was telling me about his various problems, asking if there was any relief for some of them, and then he summarized it, after we'd had our conversation, with this question. He said, "Senator, isn't there anybody back there that listens? Isn't there anybody back there that pays any attention to what we're trying to say?"...I ask his question rhetorically as I give my review of what I've seen this body do in the six months I've been here.

I came here as a small-business man. My career has been in business. I ran as a small-business man, and I promised the people of Utah I would represent small business; so that's the perspective I have. And this is what I've seen in the last six months:

Small business has received the highest possible rhetorical praise in the six months that I've been here. Starting with President Clinton and going through virtually every member of this body, everybody is in love with small business, if you listen to what people have to say. At the same time, legislatively, small business has received a serious beating, and the net result, in my view, has been the slowing of job growth just as we are going into the time when job growth is just what we need....

There are three areas in my view where small business has received the legislative beating I'm talking about....

The first one: regulation. Excessive regulation destroys jobs. And in the six months I've been here, I've seen this body pass excessive regulation on small business. Very specifically, the Family Leave Act, which puts a regulatory burden on small business. We all know the arguments and the details. I want to put a face on it.

A few weeks ago I was at a breakfast, seated next to a small-business woman, and we got talking, and I said, "What kind of business are you in?" And she told me. And I said, "How big is it?"

She looked at me and said, "Senator, we are at 49 and holding." In other words, "We have 49 employees, and we will not hire the 50th, because as soon as we have that extra employee, the 50th, we qualify for the regulation that you people passed in the Family Leave Act. If we didn't have the regulatory overhang that comes with 50 employees, I could hire an additional 5, 7, or 10 people. I could do it tomorrow. But I'm not going to. We are 49 and holding. I know a lot of businesses in the same circumstance."

The question I ask here: Do we know how many businesses are in the category of "49 and holding," that is, deliberately restricting their growth in order to avoid the kind of regulatory overburden this body has passed? The answer is, No, we don't have the statistics. But I suggest, I firmly believe, that there are a number of jobs not being created by people like this woman who says, "Forty-nine and holding." The real cost of excessive regulation is the loss of potential jobs....

The second area where I think small business has taken a beating is excessive taxation. Excessive taxation destroys jobs. We're talking now again about what's been done in this body in the last six months, when we have seen adoption of the president's proposal with respect to what he calls the "millionaire surtax." Well, the surtax, we're told, will hit only the rich. It will hit only those who earn $250,000. Those people who made money in the excess of the '80s now have to pay it back. I've heard that kind of rhetoric here on the floor. Well, who are the rich? Who are these people who made all this money in the 1980s? Donald Trump? Michael Jordan? Bill Gates? Well, undoubtedly those people will have to pay more. But the fact is that of those tax returns filed in the bracket that qualifies as the rich under the definition of this administration, 80% are filed by S corporations, sole proprietorships, or partnerships -- in other words, small business. Two hundred fifty thousand dollars a year is a lot of money for an individual. Two hundred fifty thousand dollars a year is not a lot of money for a business. It is a business on the edge. And yet, 80% of those people who will see their taxes increased in that circumstance are filing as businesses, not as individuals. This is one of the areas...of greatest misunderstanding....I had a fellow senator say to me, "Well, if they're S corporations and they want to get out of it, why don't they just incorporate?" Many don't realize S corporations are corporations. They have already incorporated, and they've made the S selection rather than the C selection because they need the money to grow, and the S selection makes it possible for them not to pay taxes twice on their dividends and their earnings, the way General Motors stockholders pay taxes twice. Partnerships, sole proprietors, S corporations -- they file 80% of the tax returns in the bracket the government considers rich....