Needs are big for small-business growth and competitiveness

From the Industrial Revolution to the iPod, our country’s economy has been built on great ideas and individuals with the courage to bring them to life. Small businesses are the backbone of the American economy — they create jobs, grow the economy, and develop the innovative technologies that will help us tackle our biggest challenges. But small businesses do need a champion in government to make sure that their voices are heard in Washington.

The Senate Committee on Small Business and Entrepreneurship’s job is to promote fair competition and help create new opportunities for America’s 26 million small businesses. These entrepreneurs may start out small, but the contribution they make to our economy is huge — and particularly important in underserved communities. In the 110th Congress, we’re in a position to get some things done for America’s entrepreneurs.

Small businesses’ worries are America’s worries, and it’s no surprise that many of the same concerns that face American families today — issues like healthcare costs, global warming, taxes, and access to capital — are especially applicable to our small businesses.

We must help relieve small businesses of the crippling burden of skyrocketing healthcare costs. The current system penalizes owners and employees alike: Premiums for a family of four are 87 percent higher today than they were in 2000, and at least 27 million Americans working for small businesses don’t have health insurance today.

Many small businesses lack the resources, time, and bargaining power to deal with these rising costs. And fewer and fewer businesses are offering benefits as a result.

I have introduced three proposals that will give small businesses access to functioning insurance markets, ensure that they and their employees have adequate health coverage, and make insurance more affordable for everyone. Specifically, we must insure the 11 million uninsured children in this country. Many are the children of small-business owners or the self-employed who are likely to be eligible for Medicaid and SCHIP, but are not yet enrolled. Second, it’s time to enact a 50 percent refundable tax credit to small firms that provide coverage to their low- and moderate-income employees. And finally, we must strike a new partnership with employers, workers, and government to share the financial burden of the most expensive medical cases.

Energy costs have also risen at a staggering pace and that correlates with the catastrophic effects of global warming. While small businesses are developing the clean energy technologies of the future, they also can be part of the solution.

In my home state, Cambridge-based Metabolix is using biotechnology to produce environmentally friendly plastics. They used a Small Business Innovation Research grant to finance their groundbreaking project. That kind of funding not only helps small businesses develop exciting and essential new products — it also helps us to create a cleaner, greener America.

We can do more to help small businesses increase their energy efficiency and ease the burden of high energy costs. I’m currently looking at ways for the government to assist small businesses with energy audits that have yielded savings of 30 percent for businesses in Pennsylvania. And we should extend loans to small businesses harmed by high energy costs.

Finally, we must focus on expanding access to capital, including to minorities, women and veterans — making sure that our nation’s best business ideas have enough seed money behind them to become full-blown success stories. That is why Sen. Olympia Snowe (R-Maine) and I introduced the Invest in Small Business Act last week and will be introducing the Small Business Lending Reauthorization and Improvements Act this week to help entrepreneurs get the financing they need.

Tax incentives are a great way to encourage investments in small businesses to give them working capital. For individual taxpayers, our bill increases the partial exclusion for gain from certain small-business stock from 50 to 75 percent and decreases the period for which they are required to hold the stock. Corporations will be eligible for the exclusion and individuals will have an effective capital gains tax rate of 3.75 percent for small-business stock. The result will be new small-business investors eager to fund a greater number of small businesses that will in turn see greater profit.

Small businesses create more than two-thirds of all new jobs in America, employ more than half of the private sector workforce, and pump over $900 billion into the economy annually.

As small businesses are creating and living the American dream, they should be able to count on the government to help create an environment where they can do what they do best: innovate, compete, and create good jobs for Americans.

Kerry is the chairman of the Committee on Small Business and Entrepreneurship.

SPECIAL SECTION: FINANCE

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Needs are big for small-business growth and competitiveness

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