Dem candidates share ideas on small-business issues: From the Print Issue of NHBR

Let’s slow down the horse race a bit, and look at the issues the candidates for president are riding – or at least those issues that directly affect small businesses.

New Hampshire Business Review posed eight questions to the main contenders in each party. The issues concern health care, foreign workers, sub-prime lending, taxes, labor relations, environmental regulation, federal small-business programs and corporate governance.

All of the eight Democratic contenders responded except for Congressman Dennis Kucinich of Ohio. Kucinich didn’t respond in time to the survey because of staff changes, the campaign said. (It’s hoped all of the leading Republican candidates will respond in time for the next issue.)

The following is a summary of their positions, based solely on responses. For more details, their complete 150-word responses to our questions are online at

Health Care

Q: What would you do to relieve the health-care insurance burden on business?

Among the Democrats, the watchword is universal coverage, which would theoretically lower the cost to those businesses that already contribute to their employees’ health care, though undoubtedly either through mandatory direct contributions or though taxes, which probably would raise cost for business that don’t. However, all of the Democrats claim that the savings realized through their plans, by reducing waste and emergency visits, will ease that cost or even eliminate it. The difference is in their plans and how they get to universal health care.

Of the seven Democratic respondents all want some kind of modified system involving private insurance companies, coupled with expansion of existing public programs and government subsidies and tax breaks.

All plans will still include employee-based coverage, with the exception of former Alaska Sen. Mike Gravel’s. Under his plan, the government would grant health vouchers to purchase insurance from one of six approved insurers. The insurance companies would have to bid to specifications set by the government in order be included as one of the six.

The other plans are more piecemeal. Several, like those of former North Carolina Sen. John Edwards and Connecticut Sen. Chris Dodd, would let the government or some nonprofit entity manage health insurance, so all employers have to do is send along the premium, just as they would for other payroll tax deductions. Under Edwards, all employers would either cover their workers, or help pay their premiums. Under Dodd, they would pay based on the business’s ability to pay.

Under Illinois Sen. Barack Obama’s plan, if the employer’s health-care costs exceed a certain amount, the federal government would pick up the tab, as long as the employer agreed to pass the savings on to their employees.

Obama also would allow small businesses and individuals to buy into the same plan that members of Congress enjoy, as would Delaware Sen. Joe Biden and New Mexico Gov. Bill Richardson. Biden would simply let the government handle catastrophic care, and while expanding Medicare for those under 55 and insuring all children by expanding SCHIP, the state children’s health program. Richardson would similarly expand Medicare and SCHIP and offer the congressional option.

Edwards would mandate coverage for individuals, working or not. New York Sen. Hillary Clinton would give small businesses a tax credit for job-based coverage, as well as expanding existing programs like SCHIP and Medicaid.

Foreign workers

Q: Many New Hampshire employers are dependent on foreign workers, but others say they take jobs from U.S. citizens. What do you propose to do with the immigrant visa programs specifically and immigration in general?

Don’t look for expansion of various visa work programs under a Democratic administration. Instead, several candidates said they favored tighter enforcements.

Edwards said he would require employers to demonstrate that they could not recruit American workers and pay the prevailing wage. Dodd would “close the loopholes” that allow American companies to hire lower-paid high tech workers from abroad. Biden was more vague, saying “our visa system shouldn’t be based on arbitrary numbers but the real needs of employers.”

The rest of the candidates were silent on existing visa programs, choosing instead to focus on illegal immigration, most of them favoring some sort of path to legalization, with Richardson being the most outspoken on the issue.

Several candidates, however, expressed doubts about a guest worker program that would accompany the immigration reform. Edwards said he would oppose it without a “real path to citizenship.” Gravel would also tie it to legalization. Almost all the candidates who responded also said they would step up enforcement. Obama wanted to employ a “mandatory electronic system” that enables employers to verify the legal status of the people they hire. Clinton only said she would “crack down” on employers who hire illegal workers.

Sub-prime mortgages

Q: What would you do about bailing out investors and mortgage companies and helping those facing foreclosure? How do you feel about regulating such lending to prevent similar situations in the future?

Almost all of the candidates favor some kind of relief to homeowners facing foreclosure. Clinton is proposing a $1 billion fund to expand state programs to help at-risk borrowers, and another $1 billion to support local trust funds for affordable housing. Dodd said he used his chairmanship of the Senate Banking Committee to secure $100 million to prevent foreclosure. Richardson would strengthen the Federal Housing Authority. Clinton would use state housing finance agencies to replace “unworkable” mortgages with more “stable and affordable ones.”

Edwards, Obama and Biden called for empowering bankruptcy courts to modify mortgage agreements. Gravel would extend loans, while Biden would “urge” lenders to renegotiate terms.

When it comes to dealing with predatory lending, Obama and Clinton gave the most detail responses. Obama proposes a STOP FRAUD Act, which would increase federal powers to define, investigate fraud, requiring “industry insiders to report suspicious” activity. He also would have lenders provide borrowers with another form, a “simplified standardized borrower metric similar to the APR.”

Clinton’s program – the American Home Protection Act — would require full disclosure of mortgage broker compensation, as well as increase mortgage fraud investigations and eliminate “abuse prepayment penalties.” (Biden also would eliminate such penalties.)

Edwards would increase underwriting standards so that “borrowers receive affordable loans suited to their means” as well as create a new agency whose focus will be to protect consumers from “abusive financial service products,” apparently going beyond mortgages to instruments like payday loans.

On the investment side, Richardson would create a firewall between the mortgage industry and the analysts who rate their credit worthiness. Obama also mentioned this while answering our question about securities reform.

Tax code

Q: What changes would you make that would directly affect business?

No candidate was as far-reaching as Gravel, who would eliminate the income tax, replacing it with a national sales tax he calls the “Fair Green” tax, since it would discourage consumption. Americans would receive a monthly rebate on all taxes for necessities, such as food and lodging, which would provide cash flow for the poor, he said.

The other candidates either would increase or not reduce taxes on the wealthy with some selective credits, as well as some kind of tax relief or credits for the middle class. Some mentioned that they would repeal the Bush tax cuts for those with high incomes (Edwards, for instance, at over $200,000 and Biden for those over $435,000).

Biden and Edwards also said they would eliminate estate taxes for all but the wealthiest families. Biden would exempt estates under $7 million. Edwards was not specific on the amount.

Nearly everybody chanted the mantra of closing loopholes and simplifying the tax code. Clinton was a bit more specific, eliminating tax breaks for companies that move jobs and production overseas, and using the money gained to invest in universal broadband here at home.

Richardson listed the greatest number of targeted tax breaks: an angel investor tax cut; doubling the Research and Experimentation Tax Credit; create a credit for companies that create jobs that pay above the prevailing wage; and offer a renewable energy tax incentive, a rural job tax credit, a manufacturing jobs tax credit and a rebate for businesses that hire disadvantaged youth in high school and college.

Dodd and Obama also would make the R&D tax credit permanent, and Obama would give self-employed small business owners a $500-per-worker credit to offset the payroll tax.

Edwards mentioned a Savers Credit, sort of an all-inclusive IRA that can be used for education, a down payment on a home, or to start a small business. That credit would match savings up to $500 a year, but would be phased out for families earning up to $75,000.

Clinton would provide a $3,500 college tax credit, as well as a health-care credit for businesses that contribute to insurance.


Q: What specific changes in federal policy- such as minimum wage or union recognition – would you favor or oppose?

Most candidates support increasing the minimum wage, but nearly all would go further in attempt to approach a “living” wage.

Edwards supports raising the minimum wage 75 cents a year until it reaches $9.50 an hour in 2012. Others (Dodd, Obama and Clinton) would use the Earned Income Tax Credit to supplement the wages of the working poor.

Both Clinton and Obama said they would index the minimum wage to inflation.

Nearly all of the candidates said they wanted to make it easier for unions to organize. Half of the candidates (Richardson, Dodd, Obama, Biden) specifically mentioned the Employee Free Choice Act, which would allow a union to represent a workplace by simply collecting signatures of a majority of employees on signed cards, without an election. Dodd also wanted to “modify the definition of supervisor to ensure that no employee is unjustly denied his or her right to join a labor union.”

Obama said he would “close the loophole in current tax law that encourages some employers to classify their employees as independent contractors” as well as oppose comp-time proposals that would “drive workers off their hard-earned overtime pay.”

Obama also mentioned stronger whistleblower protections and increasing OSHA funding for both safety grants and increased inspections.


Q: What policies would you implement that would directly affect business?

While everybody warned about the consequences of global warming, four candidates – Richardson, Edwards, Obama and Clinton – specifically mentioned the 80 percent reduction in greenhouse gas emissions. Edwards and Obama specifically mentioned a market-based cap-and-trade system, with the revenue used to generate renewable energy programs. Edwards would raise $13 billion a year for his New Energy Fund.

Obama also said he would expand the Low Income Home Energy Assistance Program and expand weatherization grants for low-income people. Biden touts his five-year, $50 billion fund to invest in such programs as fuel energy sources, energy efficiency and renewable energy technology, but didn’t detail how to pay for it.

Dodd would institute a $50 billion carbon tax that would fund renewable technology research. Gravel also said he backs a carbon tax, and cites his support for environmental regulation back in the 70s.

Both Clinton and Richardson said their environmental plans would lead to less dependence on foreign oil, but in their responses didn’t explain how they would work.

Small business

Q: What would your administration do about existing loan and incentive programs, such as the Small Business Administration? What, if any, new programs are needed?

Aside from lauding small business’s role in the economy, few of the candidates mentioned any specific programs aimed at the entrepreneur.

Obama was the most detailed, saying he would “implement the women-owned business contracting program that was signed into law by President Bill Clinton but has yet to be implemented by the Bush Administration,” as well as strengthen the SBA’s lending to minority-owned businesses.

He also said he would invest $250 million annually to provide incubators for start-up businesses in disadvantaged communities.

Biden would lower SBA user fees. Clinton would only say that the SBA should be “sufficiently funded,” especially its micro-loan program. Richardson would emphasize better programs to help veterans start businesses. Edwards would create an agency – the Rural Economic Advancement Challenge (REACH) — “to bring capital and management expertise to small town America.”

Gravel said that replacing an income tax with a national sales tax that would pay for health care is more important than any program, and Dodd cited again his research and development tax credit and his universal health care plan.

Corporate governance

Q: Is the Securities and Exchange Commission going too far, or does it need to be more stringent, in its oversight and enforcement of securities laws? What should be done to insure market integrity?

While nearly all of the candidates called for corporate transparency, few of them offered any details on how they would achieve it.

Again, Obama was the most detailed, proposing an investigation into credit rating agencies and their relationships to securities issuers. He also proposed that “shareholders have a right to vote on a non-binding resolution against excessive CEO pay … it’s bad for business when boards allow their executives to set the price of their stock options to guarantee that they’ll get rich regardless of how they perform.”

Biden cited his Penalty Enhancement Act in 2002, the tough penalties that Enterasys Networks executives recently escaped because the fraud they were convicted of occurred before the law was enacted. He would also repeal the Private Securities Litigation Reform Act, which he said “harmed investors’ power to bring crooked executives to justice.”

Other candidates only offered generalities.

Clinton said, “I believe in markets, but markets require rules and vigilant oversight.”

Dodd said he “will take several steps to ensure the strength and viability of our markets,” but doesn’t say what they are.

Richardson said that, to insure market integrity, “we must ensure that there are no more sweetheart deals, and we need more transparency in our corporate governance.”

Edwards said, “We need to hold corporations accountable for serving the interests of workers, shareholders and customers, not just corporate insiders, with stronger corporate transparency laws and shareholder rights around executive pay and board performance.”

And Gravel said he would “continue the Sarbanes/Oxley advances and provide more democratic power to shareholders to discipline the excesses of board members and executive officers while reining in the obscene salaries paid to management.”