Nov. 11, 2004--With any pre-election uncertainty now safely in the past, small businesses are looking ahead and wondering what a second Bush administration will mean for them.
A key concern is whether the policies of the first Bush administration will simply carry over into the next four years, or if Bush will use his perceived new mandate and a larger Republican majority in Congress to pursue a more aggressive agenda in his final term in office. In the first week since the election, Bush has given indications that he will go after new initiatives that expand on his familiar core principles. But he will be challenged to pay for any new initiatives amid a ballooning federal deficit.
These budget pressures may lead the Bush Administration to shape its economic agenda with a key focus on nurturing the entrepreneurial economy, according to the National Dialogue on Entrepreneurship, part of the Washington, D.C.-based Public Forum Institute.
Because of tight budget conditions, the NDE said, domestic agencies may be unable to pursue major new initiatives without major new investments.
Bush's first term was marked by a succession of tax cuts designed to stimulate the economy and aid small business. His first term produced mixed results in the area of health care, with premiums going up significantly during the past four years. Bush has also had a mixed relationship with the Small Business Administration, cutting the SBA's budget and scaling back 7(a) loans at one point. The Bush Administration's 2005 budget calls for further cuts to the SBA and other means for small businesses to access capital.
According to the NDE, these are among several areas that small business can expect the second Bush administration to target for more aggressive policymaking. Over the short term, it expects an initial focus on making permanent the various temporary tax cuts that were enacted in 2001 and 2003, with a longer-term focus on eliminating the estate tax, keeping the top tax rate for dividends at 15%, and maintaining the top personal income tax rate at 35%.
Bush supports capping medical liability lawsuit damages in his second term, aiming to lower the cost of liability insurance and reduce health care costs across the board. Since the election Bush has also indicated that he will aggressively try to fix Social Security through means that may include some element of privatization.