At the start of his State of the Union speech last night, President Obama promised to put forth a “set of concrete, practical proposals to speed up growth, strengthen the middle class, and build new ladders of opportunity into the middle class,” and threatened to “take steps without legislation to expand opportunity for more American families,” if Congress would not join him.
His not-exactly-concrete proposals included:
- Closing tax loopholes that reward companies that send jobs and profits overseas
- Reducing tax rates for businesses that create jobs in the U.S.
- Spending money saved through aforementioned tax reforms on “rebuilding our roads, upgrading our ports, and unclogging our commutes”
- Streamlining the permitting process for key infrastructure projects to create more construction jobs faster
- Launching six more high-tech manufacturing hubs like those this administration has funded in Raleigh, NC, and Youngstown, Ohio
- Establishing new trade partnerships with Europe and the Asia-Pacific region, and working together on tools such as bipartisan trade promotion authority to … open new markets to US-made goods
- Reforming the immigration system
- Updating job training programs, apprenticeships, and on-the-job training to provide workers with the skills businesses need most
- Asking US businesses to follow the lead of a Minneapolis pizza parlor owner and raise employees’ wages
- Requiring federal contractors to pay their federally funded employees at least $10.10 an hour
- Creating MyRA accounts that would let individuals invest in retirement savings bonds without losing their initial investment
Mixed reviews released in statements from various industry organizations today show that most in the small business community were underwhelmed by the speech and the President's plans.
Keith Hall, CEO of the National Association for the Self-Employed, praised the President’s speech as a “robust vision for the country that included growing the middle class"—a group Hall says includes America’s 23 million smallest businesses.
But the National Federation of Independent Businesses said the President’s speech demonstrated that “he does not understand, or simply disregards, the segment of the economy that historically has generated two-thirds of net new jobs.” In a statement, NFIB Chief Economist William Dunkelberg accused Obama of championing big business, special interests, and partisan causes. A “corporate-only” tax reform scheme, he said, would not impact 2/3 of small businesses, and raising the minimum wage would “escalate unemployment.”
The National Small Business Association, meanwhile, called small business a “very small component of the speech," and said it “held good and bad implications for America’s small businesses,” yet "few specifics." On the upside, NSBA pointed to the President’s “support for enhancing exports” and “sensible immigration reform.” But NSBA was critical of him for proposing a “drastic increase to the minimum wage” and for offering “no serious path forward on the very serious fiscal issues facing the country.”
NSBA called the hike in the federal contractors’ minimum wage a “competitive disadvantage for small contracting firms who also operate in the private marketplace,” but said Congress should take seriously the call to reform immigration.
NSBA CEO Todd McCracken said, “The President’s address largely ignored the giant elephant in the room—our looming long-term fiscal crisis.” McCracken added that, although NSBA agrees that the tax code is too complex and wasteful, “addressing just corporate tax rates and closing business loopholes will actually result in higher taxes for the majority of small businesses, 83 percent of which pay taxes for their business at the personal income level.”
NSBA Chair Jeff Van Winkle concluded that, “The President’s call to ‘make this a year of action’ echoes what small businesses have been demanding for some time.”