September 10, 2004 -- President Bush's economic policies are bad news for small businesses, according to the results of a study released Thursday by Democratic members of the House Small Business Committee.
Led by Congresswoman Nydia M. Velázquez (D-N.Y), the ranking member of the committee, the Democrats announced that the party's Small Business Index (SBI), a composite of 17 key economic indicators affecting small businesses, dipped to a new seven-year low of 71.03 for the second quarter of 2004. The quarter's result is a 32 percent drop from the index's highpoint of 104.77 posted in 2000, the year before President Bush took office.
"It is clear that this nation's job creators -- small businesses -- are struggling," said Velázquez. "While [small businesses] typically create three out of every four new jobs, today's economic environment poses significant obstacles to their success. The release of today's SBI provides insight as to why our economy has failed to turn around."
The SBI has been released on a quarterly basis since 2003 after House Democrats created it to help paint a picture of the economic climate that small business owners face. Figures were calculated back through 1998 by pooling information like the federal budget deficit, national unemployment numbers, and the producer price index with the costs of running a small business like health care, energy, and employee compensation.
Although the SBI saw a slight bump in 2003 due to the president's tax cuts, Velázquez singled out the Bush administration for failing to lay the economic groundwork to sustain growth through the economic downturn that began in 2001.
"President Bush may claim time and time again that he is helping our nation's small businesses," Velázquez said. "However, the rhetoric doesn't match the action and these initiatives are only allowing our economy to maintain the status quo instead of expanding."