Why Washington's Worth Watching

Thursday, May 27, 2010; 12:00 AM

It's National Small Business Week in Washington, D.C., time to celebrate the entrepreneurs and businesses that, according to President Barack Obama, form "the backbone of the nation's economy." But the roster of sponsors for the 47th annual observance of the occasion reads more like a Who's Who of corporate behemoths, dominated by names like Sam's Club, Visa, Ford, Raytheon and AT&T.

Dichotomies like that are feeding an undercurrent of concern in some quarters of the small-business community. The worry is that in Washington, policy-makers are continuing to let big business crash the small-business party, just as they did when George W. Bush ran things--despite a host of new pro-entrepreneur initiatives and the Obama administration voicing steadfast support for small business.

The tension isn't new. Indeed, Lesa Mitchell, vice president at the Kauffman Foundation, calls the dynamic between entrepreneurial interests and the Washington, D.C., policy-making machine "very schizophrenic."

Even so, Mitchell and other voices in the entrepreneurship movement laud the Obama administration's work in furthering the small-business cause, pointing to recent developments such as implementation of the American Recovery and Reinvestment Act, plus the administration's move to address government small-business contracting practices, to create an Office of Innovation and Entrepreneurship, and to push legislation to establish a new small-business lending fund.

"Historically, this is by far the greatest level of interest [in entrepreneurship and small business] we have seen from any administration," says Mitchell. "And that is a bipartisan comment."

The Obama administration is backing up that interest with action, asserts Karen G. Mills, who heads the U.S. Small Business Administration, pointing to "a very comprehensive and exciting agenda about small business all across the administration, but particularly here at this agency."

Yet other small-business advocates, along with business owners such as Mike Mitternight, wonder whether they have a true ally in the White House, and whether policy-makers inside the Beltway are inclined to do anything substantial to help small businesses.

"They all seem to be talking about small business as the backbone of the economy," says Mitternight, owner of Factory Service Agency, Inc., a family-owned commercial air conditioning and construction company in Metairie, La. "But they don't seem to be backing that up with policies that help us. Politicians are giving us their ear. They're giving [small businesses] a chance to speak--not that they necessarily listen to what we say. Really, it seems like they're putting a bigger burden on our backs."

"I think [small-business owners] are frustrated [with Washington policies], quite frankly," says Molly Brogan, vice president of public affairs for the National Small Business Association. "[There have been] so many things Congress had an opportunity to pass, and they haven't done it. Butat least they are talking about small-business issues a lot more than they had been."

Yet talk hasn't always translated into action, Brogan contends, listing last year's overhaul of credit card regulation among many missed policy opportunities to help small business.

That inaction also extends to issues such as the SBA's failure to meet its target for awarding government contracts to small business, says longtime SBA critic Lloyd Chapman, head of the American Small Business League. The Obama administration's small-business policy is more "smoke and mirrors" than substance, he says, while Obama and Mills themselves "are what I would characterize as anti-small business."

Nonetheless, U.S. entrepreneurial activity is growing. According to the Kauffman Index of Entrepreneurial Activity, business startups reached their highest level in 15 years after a 4 percent increase in 2009. However, existing small businesses continue to struggle. According to a January NSBA report, the number of small businesses citing decreases in revenue over the past 12 months rose to its highest point since 1993. Meanwhile, 39 percent of small businesses report they are unable to get adequate financing for their business.

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