The House Small Business Committee, led by Chairman Sam Graves (R-Mo.) held a hearing last week entitled “The Path to Job Creation: The State of American Small Businesses”. Although both Republican and Democratic members of the committee cited contrasting polls on the biggest worries of small business owners, the panel of witnesses came to the conclusion that many small businesses are not hiring due to uncertainty and excessive government regulation.
Among the witnesses was Mr. Peter Ferrara, an expert on entitlements and budget at the Heartland Institute, who testified that the steps the Administration has taken to help the economy recover have been the opposite of those that the Reagan Administration used. Pro-growth economic policies, Mr. Ferrara stated, will speed up the recovery, improve confidence and increase demand.
Mr. Ferrara was joined on the panel by Dr. Dennis Jacobe of Gallup, and Dr. Martin Neil Baily of The Brookings Institute, other economists who agreed that the burst housing bubble still has a profound impact on small businesses. Decreased home values, often used as collateral in taking out small business loans, have made many perspective entrepreneurs less attractive candidates for business loans. Dr. Baily stressed that the government should work with both banks and regulators to create some consistency in lending and to facilitate loans to credit-worthy small business owners as a way to create jobs and help the economy realize its potential to recover.
The hearing was summed up nicely by Mr. Michael Fredrich, a Wisconsin small business owner. When asked by Rep. Joe Walsh (R-IL) what was going wrong with the economic recovery, Mr. Fredrich explained that the government was adding programs and spending more in a time of recession and massive debt. Rep. Walsh asked again, “Too much government?” Mr. Fredrich’s firm reply: “Absolutely.”
Posted by Kevin Serafino, IFA Government Relations & Public Policy