Small business leaders offer mixed reviews of State of the Union


President Obama called for increased support for entrepreneurs during his State of the Union address on Tuesday. (Saul Loeb/AP)

“We should support everyone who’s willing to work and every risk-taker and entrepreneur who aspires to become the next Steve Jobs,” Obama said midway through his speech. “After all, innovation is what America has always been about. Most new jobs are created in start-ups and small businesses. So let’s pass an agenda that helps them succeed.”

The president called on lawmakers to draft legislation expanding tax relief for small businesses that raise wages and eliminating regulations that prevent entrepreneurs from accessing capital, though as many in the small business world pointed out, he neglected to specify which regulations were impeding access to funding and what type of tax changes would best suit employers and entrepreneurs.

Nor, according to National Small Business Association chief executive Todd McCracken, did he propose adequate solutions to reform the country’s broader tax code.

“The President’s call to address the deficit was a welcome one,” McCracken said in a statement following the address. “However, he failed to tell us how he would get there and he missed a critical opportunity to call for broad tax reform which could kick-start the economy.”

Obama did outline a few proposals meant to promote enterprise and chip away at unemployment, though, asking for a national commitment to train workers in the areas of science and technology, fields in which employers say they still struggle to find qualified workers. He also announced plans to open more than 75 percent of the nation’s potential offshore oil and gas resources, touting the move as both a potential job creator and a step toward energy independence.

He also spent a large chunk of his speech presenting a “blueprint” for an economy “that begins with American manufacturing.” Conceding that the country will never recover every job already sent overseas, he proposed mitigating the recent trend by increasing tax responsibilities and enforcement for companies that create jobs in other countries and using that money to cover moving expenses for companies that elect to bring jobs back to the United States. He also called for increased commitment from policy makers to promote manufacturing training programs at community colleges around the country.

The prolonged emphasis on manufacturing was well received by Jay Timmons, president of the National Association of Manufacturers, of which nine out of 10 members represent small and medium-sized businesses. However, he too faulted the president for not further addressing tax code problems and energy deficiencies, which he said have left American manufacturers at a significant disadvantage against their foreign competitors.

“Manufacturers across the country were pleased that the president focused on their role in the economy, but kind words do not create jobs,” Timmons said in an interview, later adding that the president should have addressed his stance against the Keystone Pipeline project, which Timmons said would have created thousands of jobs in manufacturing and other industries. “We need projects like that to create jobs for Americans, and the president missed that opportunity and didn’t explain why last night.”

Nevertheless, the president’s larger message — that the future of the middle class must be protected by closing the country’s widening wealth gap — did resonate with some small business owners. For instance, Jim Houser, owner of Hawthorne Auto Clinic in Portland, Ore., applauded the president’s demand for a “fair shot” economy, which he says would directly address one of business owners’ top priorities right now: finding new customers.

“If small businesses are going to grow and create jobs, we need a healthy customer base,” he said in a statement released by the Main Street Alliance. “Who makes up that customer base? The 99 percent. When the 99 percent have jobs, we have customers. When they don’t, we don’t. It’s as simple as that.”

Follow On Small Business and J.D. Harrison .

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he runs the On Small Business blog.

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