David Stockman, who was girding for a fight, couldn't have anticipated the apathy that greeted his idea. When word leaked out last December that the Office of Management and Budget might propose abolishment of the Small Business Administration, no hasty gatherings of small businesspeople denounced the proposal, and no urgent petitions circulated among members of Congress. A number of legislators and small business lobbyists even told reporters that the idea had merit. The indifferent reaction to Stockman's proposal reflected the growing perception that the SBA is a pork-barrel agency laden with wasteful loan and assistance programs. But it was also a symptom of a political crisis among many small business lobbyists, one that may cripple their effectiveness in the 99th Congress.
The crisis is one of identity and strategy. In the eyes of policymakers in Washington, is small business simply another entry in the dreary list of special interest groups that see Uncle Sam as a source of almost unlimited largesse? Or does small business have a more expansive political identity that describes an essential and dynamic sector of the national economy that has an overriding stake in major economic issues? Perhaps only once in a generation does the opportunity come that exists today to refashion fundamentally the tax system and redefine fiscal policy. Will small business expend its limited political strength by competing for its share of the federal dole, or will it move on to issues that are at the top of the national agenda?
In mid-January, as the Administration's plan to abolish the SBA gathered strength in Washington, more than 100 small business activists met in Scottsdale, Ariz., to resolve these questions of political identity and strategy. The occasion was the fourth annual leadership conference of Small Business United (SBU), an umbrella lobbying organization made up of about a dozen regional small business groups from across the country. The purpose of the conference, which was organized much like a political convention, was to adopt a narrow platform of legislative priorities for the first session of the 99th Congress. For two days, delegates debated the issues before voting on their top priorities.
From the outset, ambivalence about the SBA dominated the strategy debate. Thomas Powers, general counsel of the House Small Business Committee, told the conference, "I think each and every one of you ought to be insulted that anyone would propose to eliminate the SBA." That drew a sharp retort from a Texas delegate. "Every time I go to these meetings and hear people from Washington, they're always talking about how much they're going to lose from their budget," said David Pinkus, a Dallas landscape contractor. "You can't sit down and let every special interest group have their own agency in Washington." Pinkus and other delegates -- many of them young and from the Southwest -- urged the conference to make tax reform and deficit reduction its top priorities in 1985.
As the conference wore on, though, the traditionalist view that the SBA is small business's most important link to power in Washington began to prevail. "If we lose the SBA, it really will cause a domino effect within the small business community," argued Allen Neece, SBU's Washington counsel. And as the debate reached the height of its passion, Robert Dotchin, staff director of the Senate Small Business Committee, proclaimed to the delegates: "One thing is sacred, and that is this agency! It's going to be maintained."
The vote on the platform perfectly captured the political schisms that threaten to drain the already limited clout of small business in Washington. Tied for first place as SBU's top legislative priorities in 1985 are two contrary objectives: saving the SBA and reducing the federal deficit. Tax simplification finished second in the conference balloting. In its presentation to Congress, scheduled for April, SBU would be in the same untenable position as hundreds of other special interest lobbies in Washington.
The long-term implications of SBU's political identity crisis were not lost on some of the conference delegates. "I worry that we don't have a tremendous number of snazzy new initiatives," reflected Jack Rennie, the immediate past-president of SBU and an active member of the Smaller Business Association of New England. "It's almost like the difference between a long-range plan in business and this year's budget. We seem to churn over many of the same kinds of issues, sometimes identical issues. . . . Maybe we need some kind of far-thinking council, or some kind of new group to look beyond the tactical or topical issues."
The leadership vacuum Rennie describes within SBU and similar lobbies has direct political costs. When small business advocates espouse a political vision that is blatantly parochial, they risk the loss of visibility and access in Washington -- and, ultimately, a loss of influence.
That lesson was painfully clear even at the Arizona conference. On the same weekend that it was taking place, 21 U.S. senators from both parties were ensconced in hotel rooms less than a 10-minute drive from the meetings. The senators were in town for what a spokesperson described as a "very relaxed" charity tennis tournament. Despite weeks of effort by SBU representatives, only Lowell P. Weicker Jr. (R-Conn.), chairman of the Senate Small Business Committee, stopped by the conference -- and only for a 10-minute breakfast talk. Gulping down a glass of orange juice before rushing out with his aides, Weicker told the small businesspeople, "I love you all, but I came out her to play tennis."
It would be wrong to lay all the blame for this disheartening state of affairs on the rank and file members of SBU. Building national political leadership, notes SBU president Brad Roller, owner of Swiger Coil Systems Inc., of Cleveland, is "just a really big undertaking for guys who happen to be working and running businesses." The first step toward that goal, however, is to establish political priorities that move such small businesspeople as Roller beyond Uncle Sam's tempting handouts. Until then, as Roller puts it, small businesspeople may continue to be perceived in Washington "as a bunch of lunatics out there who aren't capable of dealing with the political process."