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NFIB: Bush Is Better for Small Biz

For much of the 2004 Presidential campaign, George Bush and John Kerry have tried to woo small businesses. Kerry is quick to point out that Bush will be the first President since Herbert Hoover to see a net loss of jobs over his term, while Bush claims his tax cuts helped stave off recession and have created 1.5 million jobs since last August.

BusinessWeek Online did its own analysis of how each candidate measures up on economic issues, noting charges by some economists that Bush's policies have boosted corporate profits but not payrolls (see BW Online, 10/25/04, "Bush or Kerry? A Pocketbook Rating"). The conservative National Federation of Independent Business, however, contends that Kerry would raise taxes and the minimum wage, impeding employment growth among small businesses, the economy's primary job creators.

Andrew M. Langer, the NFIB's regulatory-policy manager, contends that President Bush's continued focus on tax cuts and health-care plans will result in more hiring over the next four years. Langer recently spoke with BusinessWeek Online reporter Erin Chambers. Edited excerpts of their conversation follow:

Q: Which candidate do you think will be better for job creation?

A: After analyzing it, I would have to say President Bush. His record on jobs has been very good. Small businesses, which create two-thirds of the new jobs in the new economy, are very optimistic and are starting to hire. Bush's regulatory record, his record on taxes, his record on health-care issues all speak to a climate in which more jobs will be created.

Q: Why do you think payroll growth has lagged under Bush?

A: The economy had changed. It's not that new jobs aren't being created, it's that they're not being recognized. We have many more people who are self-employed in this economy than we did when the payroll surveys started. It may be that the businesses are hiring more independent contractors that aren't listed on the payroll, or subcontractors, or contracting out services within the company like janitorial services.

The household survey is a much more accurate reflection of that. Household survey numbers have been up. Over a million new jobs have been created under Bush according to the household surveys.

Q: You claim Kerry's plans won't prevent manufacturing and other jobs from going overseas, but how would you characterize Bush's position on outsourcing?

A: Bush is doing what he can to improve the business climate here at home so that business can compete with companies abroad. It's not just the tax structure. It's also the regulatory climate [and] the wages climate.

We've had the manufacturing sector flee because of 30 years of a regulatory climate that has onerously affected small manufacturers. We want our workers to be paid well here, but also those [other] countries don't have regulatory requirements that do cost these businesses a great deal. John Kerry, on the other hand, thinks it's only a tax issue.

Q: Which Kerry policies do you think would drive up costs for small businesses?

A: His call for increasing the minimum wage certainly is going to raise small-business costs. When you drive up that cost, it discourages them from hiring new employees and training them. Small-business owners file [taxes] as individuals and will be hit with Kerry's call to "tax the rich." Kerry doesn't support the repeal of the inheritance tax, which is important for small business.

Most important, Kerry wants to increase regulations. Regulatory costs are highest for businesses with fewer than 20 employees, and the Kerry agenda is one which calls for increasing those [costs]. That will have a negative impact on jobs.

Q: What should the next President do to create more jobs?

A: No. 1, carry through on the tax cuts that have been initiated under President Bush.

No. 2, health care is the single most important nontax issue facing small business, so the President has got to address that in a way that doesn't drive up health-care costs. Medical liability is a key issue there, and there's got to be a way for small business to benefit in the way large businesses do -- and that means pooling risk and increasing competition through health savings accounts.

No. 3, the President has got to recognize that there's a regulatory climate that hurts small business in America. Small businesses are being buried under paperwork.

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