President Obama exhorted business leaders to "get in the game" during a speech Monday before the Chamber of Commerce, but small businesses say they can't do it until the administration stops changing the rules.
While the speech drew a respectful, if muted, response from the Chamber, small-business leaders were underwhelmed, saying the administration's focus appears to be on major corporations, not them.
"It sounded like the president was talking more to big business. Our members live in a different world than big-business owners," said Brad Close, vice president for public policy at the National Federation of Independent Business, the nation's leading small-business lobby.
Close cites General Electric (NYSE:GE - News) CEO Jeff Immelt's appointment as the new chairman of the White House's Council on Jobs and Competitiveness as an example of outreach that focuses on the big leagues. William Daley, the new White House chief of staff, is a former top executive at JPMorgan Chase (NYSE:JPM - News).
Joe Olivo, a New Jersey printer, says Obama's strident defense of the health care law did nothing to allay his concerns about what businessmen like him are going through.
"There is so much concern over the unknowns. I have 45 employees. If I go over 50 employees, I may get penalized even if I offer insurance," Olivo said. "It's paralyzing. It's not that I don't want to invest, but the cushion I have to keep (against penalties) is so much larger, it is affecting my ability to invest in my business as much as I would like to."
White House outreach to small business has been minimal, Close says. The two sides don't talk much, especially after small firms opposed ObamaCare, though big companies largely opposed it too.
The NFIB on Tuesday said its small-business optimism index rose 1.5 points in January to a three-year high of 94.1, in large part on better views for earnings trends and future sales.
Nevertheless, the NFIB said the numbers should have been better. "The slight overall uptick in optimism might have been higher, but was blunted by the small business owners' skepticism about the future and continued hesitancy to spend and hire," it said in a press release.
Close: Not Enough
Close says the administration is not doing enough to soothe those concerns.
"We would really like to see some actions to follow the words we heard yesterday and at the State of the Union, especially on the regulatory front," he said. "Specifically, a basic understanding that the regulatory impacts on small businesses are significantly different that those that that hit big businesses."
In particular, small business is concerned about the impact, direct and indirect, of regulations by the Environmental Protection Agency, the Occupational Health and Safety Administration and the Labor Department.
Complying with regulation costs smaller firms a lot more as a share of sales than it costs big corporations, which can often lobby for favorable treatment. A few weeks after Immelt took his advisory post, GE benefited from an EPA waiver on its brand-new greenhouse gas regulations.
An NFIB analysis of expected new regulations that would increase costs for small businesses includes ones on lead paint removal, boiler standards, carbon emission levels, noise pollution and workplace injuries.
That's on top of complying with existing regulations. Warren Hudak, a Pennsylvania tax preparer, told the House Ways and Means Committee late last month that the tax code's complexity was hurting his small-business clients.
"My clients do not think strategically about their business, but tactically, because the tax code forces them in that direction," Hudak said. "The tax code rewards consumption and debt financing, as opposed to capital formation and saving. Savings and investments are often double-taxed, and many tax incentives are too complicated or arbitrary."
Olivo says the mission of agencies has shifted from public safety to revenue raising. "Before, they would work with you," he said. "Now, it's they want to raise as much money as possible to fund that part of the bureaucracy."
Republicans are rallying to small firms. The House Small Business Committee will hold a Wednesday hearing on the difficulties of complying with ObamaCare's requirement that all businesses document every transaction above $600. The Senate has voted to repeal the "1099 provision." The House almost certainly will follow suit.
On Thursday, a House Oversight and Government Reform hearing will let business groups vent against regulations.
"Over the next three years, (ObamaCare) will force employers to decide between absorbing rising premiums versus paying tax penalties, ultimately slowing or stalling the growth of small and mid-sized businesses," Gail Johnson, CEO of Rainbow Station, which provides early education services, said in a statement ahead of her testimony.