Small business advocate finds middle ground

Radhika Sivadi

5 min read ·


WASHINGTON (AP) — Todd McCracken has spent much of the last quarter century listening to both sides on small business issues — company owners on one side, and policy makers on the other.

That has given the CEO of the National Small Business Association the ability to look at issues in an even-handed way as he advocates for the country's smallest companies and employers, explaining their needs to lawmakers and government agencies. His job also involves explaining how Washington works to businesses. He reports to a board of 32 small business owners and 65,000 small companies that make up the association's membership.

"I see my job as kind of a middle man and interpreter for both sides," McCracken says.

McCracken's job brings together two of his great interests — the economy and politics. He studied economics at Trinity University in San Antonio and later came to Washington as a member of the staff of then-Sen. Pete Domenici, R-N.M. But after six months, he was ready to move on, and in 1988, he took a position as a junior government affairs staffer at the NSBA. In 1997, he became CEO.

But running an organization like the NSBA has its frustrations: "There are so many potential priorities, you really can't do everything in figuring out the right thing to work on." Still, McCracken observes, that's what it's like to be a small business owner who continually must deal with a variety of issues at one time.

McCracken spoke with The Associated Press recently about some of the issues involving small business. Here are excerpts from the conversation, edited for clarity:

Q. Obama vs. Romney. Who would be better for small business?

A. It depends on what kind of business you're in. If you're very sensitive to tax policy and low tax rates, you're going to get lower rates under Mitt Romney than you will under Barack Obama. If on the other hand, you're an exporter and need some of these of these more vigorous programs like the Export-Import Bank, then I would say the president. It does depend on where you sit. On the whole, the small business community is a little bit more Republican than the nation at large, so if you did a popularity poll right now, my hunch is Mr. Romney might have the edge in the small business community. But, we'll see.

Q. What grade would give the Small Business Association and the administration for their work on small business?

A. The SBA I think really has come along the last few years. They really have tried to make their programs user friendly. They've tried to listen to what small business needs. I think their loan programs are better than they used to be. I think it's more focused and more vigorous than it has been for quite a few years. So I'd give them a pretty good grade, an A or B.

Q. How about the administration as a whole?

A. It's hard to think about the administration overall because there are so many issues — healthcare, tax policy. I think on lending and capital, I would give the SBA a pretty good grade for trying to get things moving again. Not everything they've tried has worked, but they've tried, I think, really listened to what small businesses and banks were saying and tried to make some changes.

On the regulatory front, it's a mixed bag. On the one hand, I think that the Office of Management and Budget, which runs the Office of Regulatory Affairs, has been doing a pretty good job in figuring out how to have a rational regulatory process in the agencies and hold them accountable for the regulations. On the other hand, the regulatory state has still continued to grow and that one small office hasn't really been able to contain it. And on tax policy, the administration hasn't really been able to articulate a clear vision for the kind of real tax reform that we need to create a stable high-growth economy. Most of the tax stuff has been somewhat rhetorical in nature rather than really grappling with difficult issues that really need to be grappled with.

Q. Sounds like the SBA gets a higher grade than the administration as a whole.

A. I would say that's probably true.

Q. What are you expecting Congress to do this year about small business taxes — including extending Bush-era tax cuts like lower rates on individuals? Will we see anything before the lame-duck session at the end of the year?

A. It's really hard to predict because it's almost entirely up to what happens in the election. … If for instance the Republicans roll up some big victories, maybe even win the presidency, it's hard to see that they'd be willing to compromise on extending the Bush-era tax cuts because they would want to wait it out till January, February and get something on their own rather than getting half a loaf. On the other hand, if the president gets re-elected, he would be in a very strong position to negotiate and then it comes down to, well, how big are the majorities in the House and the Senate? Can he sustain a veto if it comes to that? I do think we will get a significant tax bill in that lame-duck session but its outlines are really hard to predict at this point.

Q. If a small business owner asked you, how do I get through this year without knowing what's will happen with taxes, what advice would you give?

A. My answer is, you really for the most part try to ignore it and keep doing what you would do given the current environment. … Assume that what we have now is what we're going to have, and just keep plowing through because you can't allow yourself to be paralyzed by what's going to happen in the future.

Q. Let's talk about regulations. Can you name three or five regulations that the NSBA is most concerned about?

A. I actually don't know that I'll be able to do this and the reason is because so many regulations affect relatively narrow slices of the business community. There really aren't that many that have a huge effect on most companies. But that's kind of the insidious nature of the regulatory regime and why we've come to the conclusion that we really need to rethink how we think about regulatory requirements. All the structures we have in place for the most part look at marginal new regulations and ask, what's the effect of this new regulation that's coming online? Is it worth it, is it not worth it? What are its costs and who are the costs imposed on? Are there alternatives? … What we've missed is that it's one more piece of paper on top of a big stack. …

We've been bouncing around the idea of creating a regulatory budget. The beauty of that is you essentially say, OK, Environmental Protection Agency, what are the costs of the regulations you impose on the American business community, the economy, the American public? Let's say it's $50 billion a year. Report that to Congress and have Congress agree to that number. Then if a new need comes along and EPA says, we need to regulate X or impose a new standard here, they'll have to go back and get rid of an old regulation, streamline some of the existing regulations, do something to fit within that $50 billion limit. What that does is it gives the agencies a reason to think about their total burden, not just the brand new regulation that's being added onto the top. What it means is that they will prioritize and they'll make sure they're doing the things that they think really matter and that will get the most benefit for the American public — while probably imposing the fewest costs on the American economy. … It gets at what we really need to do, which is not to hand-wring over every individual regulation, but to give the agencies an incentive to get it right.


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Radhika Sivadi