It’s that experience that lured Chabot onto the House Small Business Committee when he first arrived in Washington 1995. After 19 years on the panel (he lost a reelection bid in 2008 only to win back the seat two years later), Chabot last month took over as chairman. He replaces Rep. Sam Graves (R-Mo.), who stepped down in keeping with self-imposed term limits.
In his new role, Chabot will manage the congressional coalition charged with ensuring that small companies have sufficient access to capital and federal contracts and that they aren’t overburdened by regulations. His committee also has oversight responsibilities over the Small Business Administration’s lending and counseling programs.
During our conversation, Chabot talked about the current climate for small businesses, his legislative goals, and why the recent power shift in Washington may make a difference for entrepreneurs. What follows is a transcript of our interview, edited for length and clarity.
Harrison: For starters, how would you describe the current state of small business across the country?
Chabot: I would say in the overall economy there has been some improvement, but in the small business community, not nearly enough. I think there are still the same challenges faced by small businesses that have been there for years: being over regulated by the federal government, having to deal with a far too complex tax system, access to capital. So those areas that make it challenging to be a small business person today in America, and those are the types of things I intend to address on this committee.
Harrison: On which issues in particular do you plan to focus the committee’s time and attention?
Chabot: There are really four areas. One is doing something to reduce the amount of regulations on small businesses. Reforming the tax code as it pertains to small businesses, that would be another one, though that would probably be as part of a larger tax reform package.
I mentioned access to capital, that’s another one. We need to streamline the process small businesses have to go through to work with the Small Business Administration. I have talked to a lot of folks in my district and heard testimony to this committee about how daunting it can be to deal with the SBA and go through the loan process. The paperwork alone is very challenging, and there has to be a way to reduce that.
Increasing trade is the fourth area, and that fits quite well with my role on the foreign affairs committee (Chabot has served on that committee for 19 years, too).
Harrison: Where do you start? What are the first items of business?
Chabot: Most timely would be the Regulatory Flexibility Improvements Act, which we have passed a couple times in this committee before. That would be the most immediate possible activity. In general, what it does is require federal agencies to take into consideration the effects that regulations have on small businesses (the bill has since passed the House and awaits action in the Senate).
I would argue over-regulation is one the greatest challenges small businesses face right now. So we’re going to deal with a whole range of things related to the so-called Affordable Care Act – which I tend to refer to as the Unaffordable Care Act – as well as Dodd Frank, which has made it tougher for small businesses to obtain access to capital, because you now have a whole new regime of regulators looking over the shoulders of the banking industry and the credit unions. Those are the types of things where we can actually have an impact.
Harrison: Now that your party has seized control of both chambers, how does that change the game?
Chabot: I think that we have a greater opportunity now with the new leadership in the Senate than we did previously. Hundreds and hundreds of bills passed out of the House in recent years but never saw the light of day in the Senate, and a lot of those were small business bills. So, that should be different. However, assuming that you have all the Republicans agreeing on a particular piece of legislation, it’s going to need to be bipartisan, because we still need six Democrats. So they’re still going to need to work on cooperation in the Senate.
Harrison: Some of the topics you have mentioned have been politically polarizing. Are there areas where you think you can find that bipartisan support?
Chabot: Trade is probably our best opportunity to actually get something through this committee, through Congress and to the president’s desk that he may ultimately sign. I think his attitude about trade is somewhat like Bill Clinton’s and Al Gore’s, so I think we have a shot at TPP [the Trans-Pacific Partnership the administration is currently working on] and maybe even a deal with Europe, too.
Harrison: In addition to mom-and-pop small businesses, will fast-growing, tech-driven start-ups be a focus of the committee?
Chabot: That is one of the things that we’re going to explore and hold hearings on. We’re actually going to focus some of that attention on my district. There have been a lot of incubators and venture capitalists and angel investors coming into Cincinnati. It’s really on the cutting edge. So, yes, we’re going to focus some attention on that, try to find out what’s working, what challenges those entrepreneurs are facing and try to see if there’s room to expand what’s working across the country.
Harrison: What’s your most lofty, pie-in-the-sky goal during your tenure as small business chairman?
Chabot: Ninety-six percent of the world’s consumers live outside the United States, yet only one percent of small businesses actually trade sell their products outside the country. We need to improve upon that. A very small increase in that one percent would have a huge impact. That’s an area where I’m hoping we can make some real headway in the next two years, four years or six years, depending on how long I have the opportunity to do this. There’s a huge amount of potential in trade if we do it right.