After representing Utah in the U.S. Senate for three terms, Bob Bennett is leaving Washington. A longtime champion of entrepreneurs, Bennett took his DayPlanner business, Franklin International Institute, from a four-person operation to No. 151 on the 1990 Inc. 500, to a listing on the New York Stock Exchange. Ousted by a Tea Party challenger, the Republican recently spoke with Inc. contributor Reeves Wiedeman.

What are the overriding emotions in your final months in Congress?

Well, the competitive juices were flowing during the campaign. I clearly wanted to win. But now that I've had a chance to sit back and look at it...I'm just as happy to be moving on.

What surprised you most in transitioning in 1992 from businessman to senator?

Small business is constantly praised on both sides of the aisle, but I was surprised how little my colleagues actually knew about it. When I first got here I gave some speeches on the floor, and I'd ask, "Does anybody here know what a K-1 tax form is?" The answer was no.

Why do you think that is?

Most of my colleagues are lawyers. If you represent a big law firm, and then you are elected to the Senate, your principle view of business is General Motors or DuPont.

How can this be changed?

I like the idea of more small businessmen and people with management experience coming to Congress. Mike Enzi from Wyoming is an accountant who used to run a shoe store. Dianne Feinstein once asked what it would take to get me to co-sponsor a bill, and I said, "It's not an ideological issue; it's a management issue. The bill won't work." Her staff was grumbling, but she's a former mayor and understands how things work. "He's right," she said. "Make this work."

Anything you are most proud of from your time in the Senate?

I realized in the state of Utah that nobody was paying attention to rural business, and I could put together a business conference to help explain how to work with the government. We kicked off the first one with Meg Whitman as the keynote speaker, but it was the workshops and breakout sessions that everyone liked. We would get people from the state government to come in and show companies how to contract with the state.

What about with the federal government?

With the federal government, frankly, we didn't even try. That's one of the things I'm disappointed about. The federal apportionment system is so complicated. They say, "Yeah, we want small business to bid, and we have this set-aside, but now you have to certify to the following and do all of the following." We're terrified that you're gonna screw up.

How do you fix that problem?

The attitude of the procurement officer is, "How do I make sure that I will never be criticized for having made a wrong decision?" You never get fired for a decision you don't make. As a government employee, if I exerted any kind of initiative, and it didn't work out, I'd get fired. We've gotten too bureaucratic. We need to streamline. The attitude I had toward employees when I was running my business was, "You make the decision, and you make it in the best interest of the company, and if you're wrong, that means it's my fault for not having trained you properly."

Looking back, did the stimulus package work?

If you're going to pump in a trillion dollars, is it best to have the government decide how that trillion will be spent? If the government controls it, the money goes for a lot of research in a lot of programs that the Speaker of the House really likes. Is that a better way to stimulate the economy than to say, "We'll absorb the cost and leave the money in the hands of the businesses that create jobs?"

Can businesses look to government as a friend, or will it always be a necessary evil?

One of the things that's kept the tension going is that there are problems that are best solved by government. And today, we get the ideologues that get carried away with things that have less to do with government solving problems: The poster child of that is abortion. You've got Republicans, the party of free markets, saying government ought to get in and prevent abortion, and the Democrats are the ones saying, "No, the woman must have a choice." But that doesn't affect the economy one way or another.

There was one case, this was at the city level, with a mayor who was extremely ideological -- not a manger at all. He was a very strong left-wing liberal, and the woman I was talking to was working on housing for the poor, so I would have thought she'd get everything she wanted. But she told me that of all the administrations she'd worked with, this one was the worst. She said nothing ever gets done. It goes back to Dianne Feinstein -- government needs to do a better job of making things work.

What issue would you like to see the Senate tackle?

First, taxes. Small businesses are mostly S corporations, which means that taxes are paid on a shareholder's return. In the case of the S corporation I ran before coming to the Senate, I earned $140,000 a year, and my share of the company's earnings for tax purposes was $1 million. The administration would say, with agreement from some Republicans, that I was earning $1.14 million. No, I wasn't. I was earning $140,000. In an S corporation, the company's earnings go to receivables, inventory, and capital expenditures.

What about regulation?

The regulatory impulse is always overkill, and you never do an intelligent cost-benefit analysis. I once worked for J.C. Penney, and one day someone got very upset at the idea that baby pajamas weren't flameproof, so J.C. Penney had to change all of its pajamas. People stopped buying them because they were itchy. But Penney's had a piece-goods business that went through the roof as people started making their own pajamas. Later, they did a study to see how many babies died by pajamas catching on fire. It was two, or something like that.

Any advice for President Obama?

Hire some people in your administration who have small-business backgrounds. All of the people advising you on economics come from big schools and big financial institutions and big law firms, and this administration has a low percentage of people with business experience. I got to know him as a Senator, and I have great respect for him as an intellectual, but he and the people around him have no life experience to tell them where jobs come from.

What's next for you?

I have a business idea -- it's in the health care field. But I don't want to run it. I just want to invest, so I can replace all the money I lost while I was in the Senate.