Although not framed that way, a hearing by the House Small Business Committee yesterday turned into a referendum on Trump administration policies, with business owners indirectly delivering mixed reviews for the president's agenda. Participants, who rarely referred to the president directly, spoke warmly of plans to simplify the tax code. But they worried about the effect of his budget proposals on some favored programs and testified that his immigration agenda was sowing fear among their work forces.

The hearing was unusual in that--rather than focus on a single subject--the chairman, Steve Chabot, posed the broad question: How can Washington help America's small businesses? Answers predictably focused on taxes, regulations, and access to capital. The four company owners who testified spoke from their own experiences but also represented national organizations, including the U.S. Chamber of Commerce, Women Impacting Public Policy, and the Main Street Alliance.

Concerns about capital dominated the early part of the hearing. Maxine Turner, founder of Cuisine Unlimited, a catering business in Salt Lake City, bemoaned Dodd Frank's "unintended consequences" of restricting lending to small business. (Trump has pledged to dismantle Dodd Frank.) She told of being turned down by several banks for the money she needed to equip on-site kitchens for an important contract. "We have had four very successful loans with SBA, all repaid ahead of schedule," said Turner. "It should not be this hard."

The entrepreneurs were more protective of other Trump targets. Anne Chambers, who owns a content strategy agency called Red212, in Cincinnati, proposed strengthening the SBA's microloan program, which would take a hit under the president's budget. The program "has proven to be an important source of capital for women-owned businesses," she said. And David Borris, owner of Hell's Kitchen Catering, in Northbrook, Illinois, defended the Community Development Financial Institutions Fund, which would disappear under the administration's budget. CDFI loans are particularly important in low-income communities.

Most witnesses expressed approval of the President's promise to rein in regulations. Rutland "Skip" Paal, owner of the fourth-generation Rutland Beard Floral Group, in Baltimore, described the havoc wreaked by the overtime rule on his business, where salaried staff may pitch in to satisfy skyrocketing demand on Valentine's Day, and then take compensatory time off later. "We had to redesign our whole compensation package when those regulations came out," said Paal of the Obama-era executive order, whose execution was suspended last year by a Texas court. "We don't know where it's going to land."

The Affordable Care Act plays out differently across companies, belying political claims that it is a universal bane on small businesses. Paal blamed ACA for doubling monthly premiums and tripling deductibles. He said the law made hiring difficult because smaller competitors who don't need to comply can offer higher salaries. Borris, by contrast, credited ACA with helping to stabilize costs after a volatile series of premium spikes, at least one caused by a single dishwasher who required dialysis.

The business owners all opposed a too-restrictive immigration policy, with Paal citing the upstream pressures on flower-growers who depend on immigrant labor and Chambers concerned about a drying up of technical expertise. Borris and Turner said that while their workers are all legal, they experience chronic stress about potential deportations of family members. "They worry about this every single day," said Turner.

While the other entrepreneurs waxed Reagan-esque on regulations and taxes, Borris proposed another role model: Henry Ford. Repeatedly, he argued that the best thing government could do for business was to create upward pressure on wages. "The single most important thing I need to be successful and to create more jobs is more customers," he said.

Published on: Mar 23, 2017