How to Save American Business
An open letter to President George W. Bush on the state of our entrepreneurial union.
Published February 2005
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COMMENT ON THIS ARTICLEDear Mr. President,
At a time when our country is at war, when we're being challenged by new economic superpowers like China, when we face growing concerns about our ability to continue relying on foreign investment and loans to finance our debt, companies like mine -- which offer the hope of the future -- need your help.
After I wrote you in these pages a year ago, you and I talked about steps you and your administration had taken to stabilize our economy and position us to compete more effectively in the global marketplace. What was surprising, not to mention a great honor, was that you chose to talk about it in person, answering my letter by coming all the way to Springfield, Mo., to address the employee-owners of SRC.
Frankly, I think we were a good audience for you to talk to. We see our company as a business of businesspeople -- 1,200 businesspeople altogether. There's nothing particularly glamorous about what we do. We remanufacture engine and engine components for trucks, autos, and the heavy equipment used in agriculture and construction work. We make power units for irrigation. We put together engine repair kits. We're like the tens of thousands of other entrepreneurial companies that form the backbone of the American economy -- the ones who will generate the wealth required to handle the problems we face, keep the economy strong, and leave something better for our children.
That's why it's so important to bear in mind the needs of entrepreneurs whenever we pass new laws or make new rules, even if, on the surface, they appear to have little to do with business. Yes, people in growing companies care about tax policy, but that's just one way the federal government touches us. From environmental regulations to welfare reform to the call-up of National Guard units, virtually everything the government does has an impact on businesses like mine. It's all too easy for Congress and the administration to create problems inadvertently that will have ramifications throughout the entrepreneurial sector, with a potentially devastating effect on our nation's ability to meet the challenges ahead. Then again, it's also possible for you to help remove some of the biggest obstacles that stand in our way.
And that doesn't always involve passing a law. Sometimes we need leadership more than legislation. We need someone to explain how the economy works, what the real issues are, and how we ourselves can deal with them without getting the government involved. I believe explaining all that is the leader's role. Great leaders are great teachers, and you did a terrific job when you came here a year ago. The speech you gave was perfect for our community. You showed us how the tax cuts and your economic policy benefited company owners and employees alike. You got out there and sold it, and we understood it.
Encourage companies that are considering closing entire factories to keep some of the work here in the U.S.
Let's keep it going. Here are examples of issues I would encourage you to think about in your second term. They may not be the same as the economic priorities you've been hearing about from other people, but believe me, things look a lot different out here in the trenches than they do in the government buildings of Washington or the corporate suites of New York City.
The Health Care Crunch
I understand that there are a lot of health-care-related issues you have to think about as President, but the biggest one for businesses like ours is rising health care costs. Health insurance premiums jumped 11.2% between the spring of 2003 and the spring of 2004, according to a survey by the Kaiser Family Foundation and the Health Research and Educational Trust. Our company's health care costs -- we're self-insured -- will rise another 20% next year, from $2.5 million to $3 million. And yet, the consumer price index increased only 2.3% last year. We haven't seen that low a level of inflation in health care costs in a long, long time. Indeed, there have been double-digit percentage increases in premiums for four years running, forcing more and more small businesses to stop offering health insurance altogether. In 2004, only 63% of companies with fewer than 200 employees provided health benefits, down from 68% in 2001.
The fact is, every other health-care-related problem will grow worse unless we address the issue of rising costs. That means getting health care providers to think more like business owners. As you know from your own experience in business, most companies wouldn't last very long in a competitive market if we didn't keep our overhead in check and control our price increases. But because health care is a seller's market and the customers have nowhere else to go, the health care providers can pass their costs along -- and they do.
