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ADVOCATEVolume 18, Number 6 October/November/December 2004

The Race to the White House Draws to an EndNSBA examines issues key to the 2004 presidential electionBy Rob YunichDirector of Communications

President George W. Bush (R) andSen. John F. Kerry (D-Mass.)have discussed many issues

throughout the presidential cam-paign. But only a handful of issues—health care, taxes, small business

stance on each issue. This is vitalinformation for small business own-ers heading into a very crucial elec-tion. (The description of the issuesbegins on p. 6.)

The Advocate also presents infor-mation about election-related eventsaround the country (see p. 10).

assistance/economic development,and regulatory reform—are para-mount to small business owners, andmore specifically, NSBA members.

In this issue of the NSBAAdvocate, each issue is described ingreat detail—including proposals byBush and Kerry as well as NSBA’s

Inside the AdvocateA Call to Action (p. 4).Stepping Up to Bat (p. 10).NSBA to Visit New Orleans (p. 14).

NSBA FILE PHOTONSBA FILE PHOTO COURTESY KERRY-EDWARDS 2004

President George W. Bush (left) and Sen. John F. Kerry will be debating many issues that are extremely pertinent to the small businesscommunity as the election nears. The winner of the presidential election will reside in the White House (center) for the next four years.

NSBA to Present Advocate Awards This SpringBy Rob YunichDirector of Communications

Each spring, NSBA gives its mem-bers an opportunity to meet withelected officials and discuss the

same type of essential issues that arethe focus for small business ownersthroughout the year.

During next year’s event, appro-priately called the WashingtonPresentation, NSBA will be present-ing the 2005 Small BusinessAdvocate of the Year Award. The

process will yield five final nominees.A section of the NBSA Web site

(www.nsba.biz) is devoted to theaward. It contains an applicationform as well as the schedule of thenomination process. Please checkthere for updates.

Potential award winners willshow a commitment to small busi-ness advocacy; a proven history ofvoluntary efforts and endeavors toadvance small business and improvethe conditions for small businessowners; success and growth as asmall business owner; or any otheraccomplishments demonstratingmerit as an effective advocate forsmall business interests.

nomination process began in mid-September, seeking nominees wholive in Illinois, Indiana, Iowa,Kansas, Michigan, Minnesota,Nebraska, North Dakota, Ohio,Oklahoma, South Dakota, andWisconsin.

The next round of nominees willhail from Connecticut, Maine,Massachusetts, New Hampshire,New Jersey, New York,Pennsylvania, Rhode Island, andVermont. Nominees must send theirmaterials to NSBA by Friday, Nov.19.

Nominations from other stateswill be sought over the comingmonths. When it is completed, the

ChairRaymond Arth

First Vice ChairMalcolm Outlaw

SecretaryPhyllis Shearer Jones

TreasurerGrafton Willey

Immediate Past ChairWilliam Lindsay

PresidentTodd McCracken

EditorRob Yunich

WritersMolly BroganDavid Mack

PrintingMcArdle Printing Company

HOW TO REACH US

National Small Business Association

1156 15th Street NW Suite 1100Washington, DC 20005Phone: 202-293-8830

Fax: 202-872-8543Internet: www.nsba.biz

The NSBA Advocate, published bimonthly by the National Small

Business Assocation, is one of thebenefits of a membership to

NSBA. Notification of addresschanges should be sent to NSBA,1156 15th Street NW, Suite 1100,

Washington, DC 20005.

MISSION STATEMENTNSBA is a volunteer-led associa-tion. Our primary mission is toadvocate state and federal policiesthat are beneficial to small busi-ness, the state, and the nation —and promote the growth of freeenterprise.

ADVOCATEOctober/November/December 2004

Volume 18, Number 6

©© 22000044 NNaattiioonnaall SSmmaallll BBuussiinneessss AAssssoocciiaattiioonn

2 October/November/December 2004

In This IssueA CALL TO ACTION

NSBA Chairman Raymond Arthimplores members to remaininvolved in the political process andaid NSBA along the way.

BUSH AND KERRY: THE

ISSUES IN DETAIL

Healthcare, taxes, small businessassistance/economic development,and regulatory issues are featuredtopic in this November’s presidential election.

STEPPING UP TO BAT

Find out about activities organizedby different groups to help votersremain active and educated.

MORE NSBA NEWS

12 New Orleans meetingplanned… 13 Small BusinessCongress approaches… 15 NSBAcalendar… and more.

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PHOTO BY RON CALAMIA/GNOTCC

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Chairman’s MessageA Call to ActionBy Raymond ArthNSBA Chairman

As my term as NSBA’s chairmanand the 108th Congress simulta-neously draw to a close, I want to

use this last column as a call to actionby our members and other small busi-ness owners. In many ways, 2004 hasbeen a fallow year as the legislativeand executive branches have shiftedtheir focus from policy to politics. Thegood news is that they did not hurt usthis year; the bad news that they willbe back, well-rested and ready to rollin January. Now is the time to startour final preparations for a newCongress and an administration withfour new years in the White House.

I will repeat myearlier suggestionthat you becomeengaged in the polit-ical process in yourcommunity andyour workplacebetween now andthe November elec-tions. Support a candidate or twowith your time and money. Study theissues and the candidates and useyour position in your business toresponsibly promote participation byyour employees. Encourage your co-workers to vote and help them under-stand the impact that politicians andpolicy can have on your business andtheir livelihood.

To achieve that goal, masteringthe issues and understanding theimplications of legislation and regu-lation are especially important. Thatnot only aids your own political judg-ment, but allows you to present fac-tual arguments to support your posi-tions. As business owners, we have aunique opportunity to present ourviewpoints to our employees and arebound by a special obligation toknow the issues inside and out.

The NSBA Web site(www.nsba.biz) includes a “getinformed” library of issue briefs on

topics from health care to taxation;global warming to paperwork reduc-tion. These issue briefs and our poli-cy positions are formulated by volun-teers from the small businesses thatcomprise our membership. You willfind the briefs to be clearly written,non-partisan, and as objective as wecan be in dealing with the issues thataffect our businesses on a daily basis.

We also need informed volun-teers to represent NSBA in the smallbusiness community, before themedia, and in the political process inWashington. As NSBA’s reputationhas grown, we have enjoyed a sub-stantial increase in contacts from thepress and television media seekingour position on issues and often look-ing for a small business spokesman topresent them.

In the next Congress, old issueswill be resurrected and new issueswill emerge that will require ourinvolvement. This includes establish-ing and communicating our policy

positions, providing testimony atCongressional hearings, and meetingwith legislators and their staffs toexplain our position.

The bottom line is that we are asmall business advocacy organiza-tion. Our most effective advocates arereal, live small-business owners. Weneed your help; please get involved. Ithink you’ll find it very stimulatingand rewarding.

Speaking of rewarding, NSBA iscurrently seeking nominations for the2005 Small Business Advocate of theYear. This is a new program to recog-nize those entrepreneurs who candemonstrate a commitment to smallbusiness advocacy; a proven history

of voluntary effortsto advance smallbusiness; successand growth as asmall businessowner; or any otheraccomplishmentsdemonstrating merit

as an effective advocate for smallbusiness interests. Further detailsappear elsewhere in this newsletterand on the Web site, which also hasan application.

In closing, let me again requestfeedback from you, our members,about the job NSBA is doing. NSBAis unique among the small businessorganizations in that we are governedby a volunteer board of small busi-ness owners; not by staff. Our goal isto represent the best interests ofsmall business. Let us know how weare doing.

NSBA FILE PHOTO

“As NSBA’s reputation has grown, we haveenjoyed a substantial increase in contacts fromthe press and television media seeking our posi-tion on issues and often looking for a smallbusiness spokesman to present them.”

— Raymond Arth

DID YOU KNOW?From Thursday to Saturday, Feb. 10-12,2005, NSBA members will convene atthe Colony Beach and Tennis Resort inLongboat Key, Fla., to set the organiza-tion’s priority issues for the 109thCongress. This biennial event also willinclude a Health Care Summit, and achance to learn about many issuesimportant to small business owners. Youcan find more information on p. 13.

October/November/December 2004 5

NSBA Announces ‘Get a Member’ CampaignMembers can recieve free trip by enlisting 10 new members

NSBA always is looking for newmembers—and the best recruitersare you, NSBA’s current members.Now, you’ll be rewarded for

bringing new members to NSBA. Ifyou sign up five new members, youwill be inducted into NSBA’sMembership Honor Roll and be rec-ognized for your accomplishment.

And, if you enroll 10 new mem-bers, you will receive a free all-expense paid trip to NSBA’s event ofyour choice (e.g. Small BusinessCongress, Board of Trustees meeting,annual membership meeting,Washington Presentation).

Information about NSBA’s nexttwo events (the annual meeting andboard of trustees meeting in NewOrleans as well as the Small BusinessCongress in Longboat Key, Fla.) canbe found on p. 12-13 of this issue ofthe Advocate.

To take part in this exciting andeasy-to-do program, simply ask your

friends, neighbors, relatives, or any-body else who you can recruit to joinNSBA via the secure server on theWeb site, www.nsba.biz, or ask them tocomplete a membership application.Make sure they write your name(there is a field on the Web site for thispurpose) as the referring member soyou can get credit for signing them up.

Membership in NSBA is nowmore important than ever. With thecritical election in November, smallbusiness advocacy is more vital toensuring the long-term future of yourbusiness. NSBA maintains a constantpresence on Capitol Hill with mem-bers of Congress. Organizationalmembers take part in grassroots

efforts to affect positive change onthe federal, state, and local level. TheNSBA government affairs teamworks every day to advocate onmembers’ behalf—helping changethe tax code, healthcare system, andregulatory environment.

Additionally, NSBA membersreap the benefits of the organization’spartnership with Assurant Healthand Mutual of Omaha, receive freepayroll set-up and discounted officesupplies through NEBS, shipping dis-counts from DHL, and a 10 percentdiscount on the Magnet Mail e-mailand fax marketing program.

If you haven’t already, joinNSBA today and urge everybody youknow to do the same. And thenenjoy a free trip courtesy of NSBA.

For more information about thisexciting program, please call NSBAat 202-293-8830 or 800-345-6728 andask for the membership department.

Or visit www.NSBA.biz.

ISSUE DATE DEADLINE ANTICIPATEDDELIVERY

Jan./Feb. Dec. 1 Dec. 24

March/April Feb. 17 March 11

May/June April 14 May 11

July/August June 16 July 13

Sept./Oct. Aug. 15 Sept. 8

Nov./Dec. Oct. 17 Nov. 15

The Advocate Wants to Hear from You

You may have noticed new fea-tures in this issue of the NSBAAdvocate. In response to NSBA

member feedback, the staff hasbegun to increase the member-relatedcontent in the newsletter.

Therefore, NSBA will rely on youto provide content for future issues.Stories should focus on a member ofthe Council of Regional Executives(CORE), such as COSE, SBAM, andSMC; a success story from your smallbusiness; or an event for our calendarthat might be of interest to all NSBAmembers. There are many opportuni-ties out there, so please contact uswith your ideas, suggestions, feed-back, and information.

Please e-mail stories and pictures,as well as any questions or concerns,to NSBA Director ofCommunications Rob Yunich [email protected]. You also can call Robat 202-293-8830 ext. 224.

Although e-mail is preferable,you can send materials to:

Rob YunichDirector of Communications

NSBA1156 15th Street NW

Suite 1100Washington, DC 20005

Articles should be no more than600 words and focus on an NSBA-

related event, activity, or member.They should be created in MicrosoftWord and should include full contactinformation for the author.

Meanwhile, photos should be300 dots per inch (DPI) and shouldbe in JPG or TIFF format. If you aresending a hard copy of a story, pleasesend a CD or disk along with it.

Our production schedule is below.


Health CareBy Molly BroganGovernment Affairs Manager

The constant barrage of small busi-ness complaints about the risingcost of health care has not fallen

upon deaf ears. Taking its place asone of the top campaign issues,health care could be a deciding factorfor many voters this election.

Outlined below is a comprehen-sive comparison between the twocandidates and what it means tosmall business owners.

ASSOCIATION HEALTH PLANSPerhaps the most talked-about

small business health care issue,Association Helath Plans (AHPs)would allow national associations tosell insurance to their members out-side of their respective states’ man-dates and rating rules. PresidentGeorge W. Bush has been an ardentsupporter of AHPs, calling repeated-ly for the Senate to move on theHouse-passed bill. Sen. John F. Kerryhas opposed AHPs for several years,pointing to problems with the billthat would weaken consumer protec-tions, increase gaming of the system,and increase both the ranks of theuninsured and the cost overall tosmall businesses.

NSBA strongly opposes AHPs due totheir proclivity to select the healthiest indi-viduals and leave those sicker individualsin the state markets.

HEALTH SAVINGS ACCOUNTSBush lobbied for and signed leg-

islation that makes Health SavingsAccounts (HSAs) available to mil-lions of Americans. HSAs are pre-tax accounts that allow employeesand employers to contribute up to$1,000 annually in conjunction witha high-deductible, low-premiumhealth insurance plan. Funds with-drawn from savings accounts must beused for qualified medical expenses.The Bush plan uses HSAs to provideassistance to low income citizensthrough a federal contribution of

$300 to the individual’s HSA in con-junction with a $700 tax credit.

Bush proposed allowing individ-uals with HSAs to deduct 100 per-cent of the premium for their HSA.He also has endorsed legislation thatwould allow people with a healthFlexible Spending Account (FSA) toroll over up to $500 per year ofunused funds into their HSA.

Kerry voted against the develop-ment of Medical Savings Accounts,the predecessor to HSAs. Andthough he was not present to vote onthe HSAs themselves, Kerryexpressed his opposition citingincreased out-of-pocket expenses andlack of help to low-income people.

NSBA supports HSAs as an excellentoption for small businesses and supportsfurther expansion in the deductibility ofHSA premiums.

TAX CREDITSBush’s proposal includes a refund-

able tax credit that will make healthinsurance more affordable to millionsof Americans who do not have accessto employer-provided or public insur-ance (Medicaid/Medicare).

Bush’s estimated budget for thiscredit is $89 billion over 10 years and,according to the Treasury Department,would provide insurance coverage to4.5 million more Americans. Eligiblefamilies with two or more children andincomes under $25,000 could receiveup to $3,000 in credits to cover asmuch as 90 percent of their insurancecosts. The maximum income for thecredit is $60,000 for families.

Eligible individuals earning up to$15,000 annually would receive a$1,000 maximum tax credit. For indi-viduals, the credit tops at an incomeof $30,000. The credits are refund-able, and are available only for thosewithout access to employer-sponsoredcoverage. In his first term, Bush sup-ported health insurance tax credits tohelp workers (who lost their jobs dueto international trade) obtain health

insurance coverage. The tax credit hashelped thousands of these displacedworkers obtain insurance coverage.

The Kerry-Edwards plan is broad-er and would cover more people, but italso comes at a much higher cost totaxpayers. The plan offers a tax creditfor small businesses that covers low-to-moderate income workers. The taxcredit will cover up to 50 percent of thecost of the employers’ share of the pre-miums. This tax credit only would beavailable to an employer who purchas-es through the new Kerry-EdwardsCongressional Health Plan.

This method would allow smallbusinesses to purchase through theFederal Employees Health BenefitsPlan (FEHBP). Additionally, thosesmall businesses buying into theFEHBP would have to pay at least50 percent of the health insurancepremium.

Kerry is proposing tax credits forlow-income citizens at or below 300percent of poverty; a 25 percent cred-it for seniors aged 55 to 64; and a 75percent credit for people betweenjobs and whose salaries fall below300 percent of poverty.

Finally, Kerry proposed a taxcredit for workers not eligible forother provisions of his plan. Thiscredit would limit premiums to lessthan six percent of income for work-ers below poverty to 12 percent ofincome for workers at 300 percent ofpoverty.

A signature piece of Kerry’shealth insurance proposal is his“reinsurance” concept that aims atpreventing financial ruin over cata-strophic health problems. This planwould reimburse businesses for up to75 percent of the cost of catastrophiccare above $50,000.

To qualify for the credit, employ-ers will be required to provide afford-able health coverage to all their work-ers, distribute savings to all employees,and encourage disease management.

NSBA supports refundable tax credits

Issues 2004


for health insurance for all purchasers, notjust those in a government-run program.The organization also is concerned aboutthe long-term affects of allowing buy-into the FEHBP, focusing on adverse selec-tion and the eventual move to mandatingall insurance through the federal plan.

MEDICAL LIABILITYBush has been outspoken on his

desire to curb frivolous lawsuits, par-ticularly in the medical arena. He pro-posed placing limits on recoveries fornon-economic damages to $250,000,and would only allow for limitedpunitive damages in cases where theyare reasonably justified. Bush supportspayments of judgments over timerather than in a single lump sum,ensuring that appropriate paymentsare available when patients needthem. He would place a statute oflimitations for medical malpracticeand reduce the amount that doctorsmust pay if a plaintiff has receivedother payments from an insurer tocompensate for their losses. Bush alsoproposes that defendants pay judg-ments in proportion to their fault.

Kerry doesn’t support monetarycaps, but believes punitive damageawards should be doled out only incases where intentional misconduct,gross negligence, or reckless indiffer-ence to life can be established. Kerryproposes that all medical malpracticecases be required to go through amerit certification process by anindependent body before they areallowed to move forward into thecourts. His proposal aims to helpstates ensure the availability of non-binding mediation in all malpracticeclaims before cases proceed to trial.

Kerry also backs a policy statingthat lawyers who file frivolous caseswould face tough, mandatory sanc-tions, including a “three strikes andyou’re out” provision that forbidslawyers who file three frivolous cases

from bringing another suit for thenext 10 years.

In an effort to solve the problemwith doctors being “priced out” ofpractice, Kerry proposes tighter regu-lation on insurance companies toprevent the gaming of medical mal-practice insurance.

NSBA supports measures aimed atreducing frivolous lawsuits, and backsproposals to place limits on punitive med-ical malpractice awards.

MENTAL HEALTH PARITYBush supports mental health par-

ity in treatment and insurance cover-age as well as extending the deadlineof the 1996 Mental Health ParityAct. He does not, however, supportany additional benefits, and hasvowed to oppose legislation thatwould cause insurance rates toincrease.

Kerry has voted for the expan-sion of the Mental Health Parity Actof 1996 and also co-sponsored S. 486,which would extend “sunsets” aswell as include additional benefitcoverage for mental illness.

NSBA did not support the 1996Mental Health Parity Act, and would con-tinue to oppose significant expansion ofbenefits offered due to the potential hard-ships it would cause small business owners.

PATIENT’S BILL OF RIGHTSBush stated his support for legis-

lation that would protect patientsagainst insurance companies, butwith limits on lawsuits and establish-ing authority in federal courts vs.state courts.

He threatened to veto theMcCain-Edwards-Kennedy bill point-ing to the inflationary effects itwould have in the insurance market.

Kerry supports the McCain-Edwards-Kennedy bill, and proposesthat all people should have the rightto see the specialists they need, be

provided with emergency-room pro-tections, take part in an externalappeals process that allows patients toappeal a HMO decision, and be givenwhistleblower protections that allowhealth care workers to report qualityproblems without fear of retaliation.

NSBA has historically opposed aPatient’s Bill of Rights due to the likelyincrease in insurance costs if such legisla-tion was passed.

TECHNOLOGY IMPROVEMENTSBush supports the use of modern

health information technology, andproposed doubling the amount offunding for demonstration projectsfor broader adoption of health ITsystems. The president called for per-sonal electronic health records withinthe next 10 years.

Kerry also supports personalelectronic medical records but hasproposes an effective-date of 2008.He also proposes giving technologybonuses to health providers to simpli-fy and streamline their paperwork.Kerry would require insurers doingbusiness with the federal governmentto use simplified technology.

NSBA supports personal electronicmedical records to be enacted as early aspossible.

THE BOTTOM LINEAccording to an analysis by

Emory University health economistKenneth E. Thorpe, the Bush plan oflimited tax credits for the purchase ofhealth insurance would cost about$90 billion over 10 years, providingcoverage to about 2.5 million moreAmericans.

Kerry’s proposal would insure 27million additional Americans at a 10-year net cost of about $650 billion.Kerry would pay for his health planby rescinding the Bush tax cuts forthose with incomes in excess of$200,000 annually.

Are you yearning for the latest information from NSBA? Do you want to read about the latest issues,see NSBA’s name in the press, and learn how you can take action? It’s easy!

www.nsba.biz


TaxesBy David MackGovernment Affairs Manager

As is often the case, small businessowners are receiving a lot of atten-tion leading up to November’s

presidential elections. Both candidatesfrequently note the important roleentrepreneurs play in economic recov-ery and job growth.

From the birth of a business to theday a business ownerthinks of retirement plansand perhaps selling thebusiness, tax policy playsa role in the success anddecisions of small busi-ness owners.Acknowledging this fact,President George W.Bush and Sen. John F.Kerry have included pro-posals in their economic plans that areintended to appeal to business owners.Major ideas impacting entrepreneursfrom both candidates’ proposals arehighlighted below.

Bush, as the incumbent, is moreof a known entity on tax issues thanhis rival and his proposals are prima-rily a continuation from his first term.

At the center of Bush’s economicagenda is the permanent enactmentof the three tax cuts that were passedduring his first term. These bills low-ered income tax rates, allowed smallbusinesses greater expensing limits,and will phase out the estate tax untilits full repeal in 2010. Senate budgetrules, however, require that the taxcuts expire in 2011. Bush vows that ifhe is re-elected, he would seek tomake all of the tax cuts permanent.

In addition to tax relief, Bushmade other interesting tax propos-als—including a sweeping simplifica-tion for pre-tax retirement savingsthat could help increase small busi-ness’ participation in pension plans.The Employer Retirement SavingsAccounts (ERSAs) would functionmuch like a traditional 401(k) plan,but would be easier to set up and

administer for small enterprises.Business owners currently have

the option of opening SIMPLE401(k) accounts, which were createdby Congress as an acknowledgementthat traditional 401(k)s are too bur-densome for small enterprises.However, SIMPLE 401(k) plan par-ticipants can contribute less in pre-tax funds than traditional 401(k)

users. Bush’s ERSAs would eliminatethat inequity in the tax code.

Bush also has shown an inclina-tion towards fundamental tax reformand has mentioned replacing the taxcode with a consumption tax as onepossible option. As a first step, Bushwill form a commission to study theissue. The Fair Tax would scrap theentire tax code and replace it with a23-percent national sales tax.

Kerry also offers a fascinatingarray of small business attentiongrabbers. He proposes restoring thetop two marginal income rates to pre-Bush levels, while maintaining theother income tax cuts. Kerry has notindicated whether he would allow thehigher expensing levels to expire.

Kerry differs from Bush on theestate tax. The senator would notpermanently repeal the estate tax, butwould raise the exemption to $10million for family businesses.

Included in Kerry’s proposals is a

plan to reform the international taxsystem. His plan has many similaritiesto legislation (H.R. 4520) currentlyunder negotiation between the Houseand Senate. Under the plan, Kerrywould require American companies topay U.S. tax on goods manufacturedabroad and sold in a different countrythan where they were produced.

The change is intended to dis-courage manu-facturers frommoving facilitiesoverseas—tak-ing advantage ofcheaper inputcosts—and sub-sequentlyimporting thegoods back tothe U.S. Kerry

would use these revenues to reducethe corporate income tax from 35 to33.25 percent.

In an effort to encourage job cre-ation, Kerry advocates a two-yearNew Jobs Tax Credit that would offeremployers a credit equal to their shareof payroll taxes for new employees.Small business investment also wouldbe encouraged by eliminating capitalgains taxes for long-term investmentsin small businesses.

NSBA congratulates both candidatesfor continuing to think of small business.Bush fits well with NSBA’s top tax priori-ties on the issues of tax cut permanency,estate tax repeal, fundamental tax reform,and pension reform. NSBA also supportsthe Fair Tax.

Kerry’s new jobs tax credit and invest-ment tax breaks would undoubtedly be use-ful for many small businesses. However, hisoutright rejection of fundamental taxreform and mischaracterization of the FairTax is particularly troubling.

“From the birth of a business to the day abusiness owner thinks of retirement plans andperhaps selling the business, tax policy plays arole in the success and decisions of small busi-ness owners. Acknowledging this fact,President Bush and Sen. Kerry have includedproposals in their economic plans that areintended to appeal to business owners.”

DID YOU KNOW?NSBA hosts an annual Washington Presentation in the Nation’s Capital everyspring. Organization members have an opportunity to converge in Washington,D.C., and meet elected officials who make the decisions that directly affect yourbusiness. This is part of NSBA’s larger interaction with Congressional members, aprogram in which the Washington Presentation plays an integral part.

Issues 2004


Small Business Assistance/Economic Development

By Molly BroganGovernment Affairs Manager

The Small Business Administration(SBA) has seen better days. Froma complete shutdown of their

flagship 7(a) loan guarantee programto a year-overdue reauthorization,both industry and end users are eagerfor a long-term fix.

President George W. Bush hascourted the small business votethrough a series of tax benefits andhealth care proposals, rather thanthrough small business assistance pro-grams. Bush, at the beginning of histerm, removed the SBA Administratorfrom a Cabinet-level position. Theadministratoin also has proposed azero budget for the popular 7(a) loanguarantee program, a controversialmove opposed by many in industry.

Since taking office, Bush’s SBAbudget has been reduced by 25 per-cent with additional cuts expected infiscal year 2006. A series of staff buy-outs (when SBA employees were

given a week to make the choice ofrelocating or leaving the agency with aseverance package), coupled with thecentralization of the 7(a) processingand asset sales department, left manyinside the agency concerned. SBAactually has made a record number ofloans—expanding on the SBAExpress program—but the averagedollar amount has declined signifi-cantly during the last five years.

Bush favors permanent tax cuts tohelp small business owners financetheir operations independently. Heproposed changes to the SmallBusiness Development Centers withincreased user fees and proposed com-pletely abolishing the Microloan pro-gram that caters to very small busi-nesses (who are generally low-incomeentrepreneurs) through small loansand technical assistance. Bush alsoproposed budget reductions in theManufacturing Extension Partnershipand United States Export AssistanceCenters, both of which provide coun-seling and technical assistance.

Sen. John F. Kerry remains astrong supporter of the 7(a) loan pro-gram in its current form. He opposedprogram shutdowns and the proposalto gut the funding from the 7(a) pro-gram. Kerry supports the expansionof small business loans, access tocapital for microenterprises, and plac-ing the SBA Administrator back intothe Cabinet.

Kerry also proposed the creationof a Small Business OpportunityFund, using an additional $170 mil-lion that would make billions in long-term capital and equity available tosmall businesses. He is striving toincrease the federal government’s ven-ture-capital investments, which wouldcreate more opportunities for funding.

NSBA supports full funding of theSBA 7(a) program and the various techni-cal assistance programs. While the organ-ization opposes the reversal of tax cutsbenefiting small businesses, NSBAbelieves the various SBA programs pro-vide an important economic growth toolto small businesses.

Regulatory ReformBy Molly BroganGovernment Affairs Manager

Compliance isn’t cheap. Small busi-nesses are facing costs of nearly$7,000 per employee just to keep

up with regulatory and paperworkburdens. Their cost is more than 60percent higher than what large busi-nesses pay, equaling an estimatedeight billion hours in paperwork andregulatory burden. As small businesshas jumped to the forefront of thisyear’s election, regulatory policy isan important one to consider.

Consistently hailed as one of thefederal government’s most effectiveoffices, the SBA’s Office of Advocacyacts as small business watch-dog with-in the government to ensure regulatorsconsider the impacts of their rulemak-ing on small business.

President Bush has been an

ardent supporter of the Office ofAdvocacy. In fact, Bush gave theoffice increased authority to reviewand comment on proposed regula-tions via Executive Order 13272.Through the efforts of the office,Bush effectively repealed the Clintonergonomics rule that would have costsmall businesses an estimated $21 bil-lion in 2002. According to the CatoInstitute, regulations impacting smallbusiness decreased four percent inthe last year and 11 percent in thelast five years. Though the presidenthas certainly made strides towardsregulatory reduction, there was anincrease in the number of pages inthe Federal Register dedicated tofinal rules.

Sen. Kerry, who served as chairand ranking member of the SenateSmall Business Committee, also has

a keen understanding of burdensomeregulations on small businesses. Hesupported the Office of Advocacy,and sponsored legislation to furtherincrease their budgetary autonomy.Kerry did, however, support theClinton ergonomics regulation. Hewould likely support an ergonomicsrule with more industry-specific vol-untary guidelines as well as increasedsmall business education.

NSBA is an avid supporter of theOffice of Advocacy and worked withBush and Kerry in that goal. The organi-zation opposed the ergonomics rule andmaintains serious concern over any moveto implement a similar regulation.

DID YOU KNOW?NSBA, which was founded in 1937, isthe nation’s oldest small business advo-cacy organization.

Issues 2004


By Rob YunichDirector of Communications

Independence, Ohio, might be themost perfectly-named city to hostan election-related event. But it cer-

tainly is not the only one.Events planned for Churchill,

Pa., and Longboat Key, Fla., also areon the calendar—and reflect the dif-ferent approaches taken by NSBAmembers in conjunction withNovember’s presidential election.

The Council of SmallerEnterprises (COSE), the small busi-ness division of the GreaterCleveland Partnership, will host“Election 2004: The Outlook forSmall Business” at the EmbassySuites in Independence on Tuesday,Nov. 16 at 3:30 p.m. The event, partof COSE’s Caucus series, will pro-vide an in-depth look at the electionoutcomes and how they will affectNortheast Ohio’s businesses. COSEplans to provide their members witha list of area legislators that can pro-vide analysis on the election resultsas well as creating expectations forthe upcoming term.

“It is important that our membersnot only understand the process butconnect to it,” COSE Senior Managerof Government Advocacy ClaireWalker says. “They are the best advo-cates on small business issues becauseit directly affects their lives and thelivelihood of their business.”

The Caucus aims to educateCOSE members, support their inter-ests, and help them gain a betterunderstanding of the group’s advoca-cy efforts.

“It provides an opportunity fordirect involvement [by] our membersin [COSE’s] efforts to improve thesmall business climate in NortheastOhio,” Walker says. “The forum isdesigned to provide regular briefingson pending local, state, and nationallegislative and regulatory issues thatare of importance to small business.”

The group also developed an

Internet-based Candidate InformationCenter to help its members learnabout the political candidates andissues in this year’s election.

“Advocating on behalf of thesmall business community is a corefocus of COSE,” says Nick York,chair of the COSE AdvocacyCommittee. “The CandidateInformation Center is one way we aremaking it easier for our members andtheir employees to get involved in thepolitical process. Their votes can reallyimpact the future of their businesses.”

The Candidate InformationCenter is designed to provide mem-bers with balanced information tohelp them make informed choices atthe voting booth. The site featuresvoter registration and absentee ballotinformation, legislator and issueinformation, a presidential voterguide, a 2004 election calendar, elec-tion fact sheet, and tips to help com-panies get involved. The free site canbe accessed at www.cose.org/election.

COSE, the small business divi-sion of the Greater ClevelandPartnership, serves as a one-stopresource for its nearly 16,400 mem-bers by providing many services vitalto small businesses.

PITTSBURGH POLITICSSMC Business Councils is provid-

ing the opportunity for Pittsburgh-arearesidents to meet federal and state offi-cials before voting. The group willhost a “Meet Your Elected OfficialsReception” on Thursday, Oct. 21 atthe Westinghouse Research andTechnology Park in Churchill.

The event will provide attendeesan opportunity to discuss the issuesface-to-face with those who representthem, and glean information perti-nent to small business. SMC hostsseveral of these events throughoutthe year and remains active in advo-cacy by publicizing voting records onsmall business issues.

The group’s 30-member govern-ment relations committee meets reg-ularly to discuss SMC’s interest onthe federal and state level. The groupwill be meeting again after the elec-tion to plan for the coming year.

“Currently, we plan to concen-trate on legislation affecting the costand availability of health care foremployers and their employees,”SMC Vice President Lee Taddoniosays. “This has been our number oneissue for some time.”

The group also sent out question-naires to the area’s elected officesabout their position on SMC-sup-ported issues. SMC will publish theresults in their magazine, DynamicBusiness.

The organization serves smallerbusinesses of all kinds and boastsmore than 5,000 members, includingsome of Pennsylvania’s leadingsmaller businesses. For more infor-mation, visit www.smc.org.

LANSING LAUNCHThe Small Business Association of

Michigan (SBAM) is taking a differentapproach to election preparation. Thegroup will launch a new monthlymagazine, Focus on Small Business, withan issue devoted entirely to the elec-tion. The premiere will include a list oflegislative candidates endorsed bySBAM’s Political Action Committee(PAC), a description of key small busi-ness issues from the 2003-04 legislativesession, and the voting records of law-makers on those issues.

SBAM is a trade associationorganized especially for small busi-ness in Michigan. The group providesleadership in the promotion of freeenterprise and other common inter-ests of small businesses in the state.

For more information on thegroup, visit www.sbam.org.

Mary Heindl, Michael Rogers, LeeTaddonio, and Claire Walker contributedto this story.

Stepping Up to BatNSBA members prepare for November election, 109th Congress


IRS Makes EZ Changes

Who says the IRS can do no good? On Friday, Sept. 23, the Internal Revenue Service(IRS) announced its intension to increase the number of small business ownerswho can file a form 1040, schedule C-EZ. For business owners who file Form

1040, the schedule C is used to report profits and losses from a business. Schedule C-EZwas created in 1992 as an easier way to prepare documents, therefore saving the small-est filers time and paperwork costs.

Currently, only filers with $2,500 or less in business expenses can use the simplifiedform. Under the new IRS rule, filers with up to $5,000 in expenses can use the time-sav-ing method. According to IRS estimates, the change will allow 500,000 more small busi-nesses to use the C-EZ form, therefore saving those filers an estimated five million hoursin paperwork burden.

NSBA encourages tax simplification and paperwork reduction wherever it can befound and encourages the IRS to seek out more ways to simplify tax filing for small busi-ness owners.

— David Mack

NSBA At WorkHighlights of NSBA staff activities from the past two months

Every day, NSBA works toensure that small businessowners are represented on

Capitol Hill. NSBA staff and vol-unteers meet with Congressionalleaders and other organizations toaccomplish this goal.

Over the past two months,even during the quiet summermonths, NSBA has attended myr-iad events, including:

Aug. 23Industry Roundtable on AcquisitionExcellence

NSBA participated in anongoing roundtable, held by theOffice of Federal ProcurementPolicies and General ServicesAdministration, to garner inputfrom industry on best practices forgovernment contracting.

Sept. 2Meeting with Senate Small BusinessCommittee Chief of Staff

NSBA met with Wes Coulam,Senate Small Business CommitteeChief of Staff, to discuss pendinglegislation and plan for various issuesin the 109th Congress.

Sept. 10SBA Regulatory Agenda Review

Staff participated in the Small

Business Administration Office ofAdvocacy’s semiannual regulatoryagenda review. During the round-table, staff reviewed all regulatorychanges proposed by the Departmentof the Treasury for the remainder of2004 and early 2005. Proposed regu-

lations with small business impactwere flagged for the SBA Office ofAdvocacy attention.

Sept. 15National Economists Club Lunch

Staff attended a lunch forum atthe National Economists Club.Barry Bosworth spoke about “AJobless Recovery: Off-shoring ofJobs vs. Productivity Growth atHome.”

Sept. 22H.R. 1873 Event

Staff attended an event to thanklegislative sponsors of H.R. 1873, the“Equity for our Nation’s Self-employed Act.”

Staff from many of the 67 con-gressional offices supporting H.R.1873 attended the event.

Sept. 23House Small Business CommitteeBreakfast and SBA Luncheon

NSBA staff attended a HouseSmall Business Committee Breakfastto discuss legislation and small busi-

ness issues with committee membersas well as House leadership.

NSBA also participated in aluncheon hosted by the SBA to dis-cuss the Office of Advocacy and the7(a) loan guarantee program.

NSBA FILE PHOTO

On Sept. 2, NSBA met with Wes Coulam, chief ofstaff for the Senate Small Business Committee, ofwhich Sen. Olympia J. Snowe (above) is chair.

NSBA to Visit New Orleans in November

NSBA members are heading to theBig Easy. New Orleans will hostNSBA’s fourth and final Board of

Trustees meeting of 2004 and theevent, to be held Nov. 11-12, also willinclude the organization’s annualmembership meeting.

Accommodations will be provid-ed by the Royal Sonesta Hotel, locat-ed at 300 Bourbon Street in the city’sfamed French Quarter.

During the membership meeting,attendees will elect one-third of theorganization’s 30-member, all-volun-teer board, which subsequently willelect the 2005 officers. The nomina-tion committee is currently votingupon a slate of officers. NSBAChairman Raymond Arth is slated tobecome NSBA’s immediate pastchair, a post currently held byWilliam Lindsay.

The “Class of 2004” board mem-bers include Mark Deion, JonathanHall, William Largent, Scott Hauge,Paul Hense, Malcolm Outlaw,Thomas Pitrone, Edward Saxon, andDee Smith. Board members servethree-year terms, while officers serveone-year terms.

Additionally, members will hearupdates on the status and health ofthe organization. They also will final-ize the dates for future board meet-ings and special events, such as theannual Washington Presentationscheduled for this spring.

For more information about themeeting or to register, please callRosa Wright at 202-293-8830 ext.207 or e-mail [email protected].

NEW ENGLAND SUMMERNSBA’s most recent board meet-

ing was held in Boston, where theorganization launched a healthcarereform plan focusing on issues thatwill affect small business. The planwill be unveiled during the SmallBusiness Congress, to be held Feb. 10-

12, 2005 in Longboat Key, Fla. (Formore on the event, please see p. 13.)

During the Bostonmeeting, theSmaller Business Association of NewEngland (SBANE) presented anupdate on its activities and intro-duced its new president, Robert(Bob) Baker. SBANE, based inWaltham, Mass., was founded in

1938 to promote and protect smallbusinesses. Its 1,000-member compa-nies in six states range from sole-pro-prietorship service businesses andgrowing high technology firms to200-employee manufacturing plants.

For more information aboutSBANE, call its office at 781-890-9070 or visit www.sbane.org.


PHOTOS COURTESY NEW ORLEANS ONLINE

By Rob YunichDirector of Communications

New Orleans, site of the next NSBA board of trustees meeting, is most known for itsriverboats (below) and the Louisiana Superdome, home to the New Orleans Saints.

Small Business Congress ApproachesEvent gives NSBA members an opportunity to establish priority issuesBy Rob YunichDirector of Communications

NSBA’s biennial Small BusinessCongress is approaching. It willbe held Thursday-Saturday, Feb.

10-12 at the luxurious Colony Beachand Tennis Resort in Longboat Key,Fla. The three-day event will featurethe opportunity for attendees to setNSBA’s priority issues for the 109thUnited States Congress.

It also will include an innovativeHealth Care Summit (where NSBAwill unveil a groundbreaking health-care reform plan); sessions focusingon taxes, regulatory affairs, and eco-nomic development; time to meetyour fellow NSBA members; andmuch more.

Members will finalize the priorityissues Saturday, Feb. 12. The issueswill be split into five categories: taxpolicy, information and technology;economic development; health andhuman resources; and environmentand regulatory affairs.

The Colony features tennis on 21courts (10 are soft), a state-of-the-art

fitness center, full-service health spaswith whirlpool, a beachside freshwa-ter swimming pool, and access toplenty of water sports.

Be part of this landmark event.


NSBA Government Affairs Manager David Mack (above) discussed information and tech-nology issues during the 2003 Small Business Congress. This year’s event, scheduled forFeb. 10-12, will be held in Longboat Key, Fla., where members will finalize the organiza-tion’s priority issues for 109th Congress. When members are not hard at work, plenty ofwater sports and poolside activities are available at the Colony Beach and Tennis Resort.

NSBA FILE PHOTO

And enjoy a breathtaking setting inthe process.

The rate for a one-bedroom con-dominium is $210 per night, while atwo-bedroom condominium costs$285 per night. The registration feeshad not been finalized at press time.

For more information or to regis-ter, please call Rosa Wright at 202-293-8830 ext. 207 or [email protected].

COURTESY THE COLONY BEACH AND TENNIS RESORT

DID YOU KNOW?DeWitt Emery, a small business ownerfrom the Midwest, founded NSBA in1937. At the time, Emery’s group wascalled the National Small BusinessMen’s Association. The organizationsubsequently changed its name toNational Small Business United beforeswitching to the National SmallBusiness Association in 2003. Thegroup originally was comprised of 160small businesses. Today, NSBA repre-sents more than 150,000 in the UnitedStates, British Virgin Islands, Guam,Puerto Rico, and U.S. Virgin Islands.The organization’s Website,www.nsba.biz, remains the best way tostay updated on NSBA events.

‘Deciding To Sell Your Business’ Aids OwnersBook one of many resources available to NSBA members

Asuccessful business owner finallydecides that the time has arrivedto sell the company. A buyer is

found and the price is negotiated.And the gleeful seller—strapped to agolden parachute—glides to a gentlelanding on an island of golf courses,tennis courts and a stack of books bya lounge chair.

That’s Hollywood’s version,anyway.

“It’s rarely that easy,” said NedMinor, author of “Deciding to SellYour Business: The Key to Wealthand Freedom” (Business EnterpriseInstitute, 2003, $24.95 Hardcover,$17.95 Paperback).

Minor is a Denver lawyer who,for 30 years, has guided hundreds ofbusiness owners through the saleprocess. He decided to write about theexperience, including first-hand clientstories, because selling ones’ life workis anything but a stroll on the beach.

The emotional stress that comeswith selling can be overwhelming.Minor points out that selling one’sbusiness is like coming to grips withone’s own mortality—certainly one’smortality as a business owner.

Business owners (whether chiefof a $5 million or $500 million-a-yearrevenue enterprise) are so driven,Minor said, that their companiesbecome their lives, their identitiesand their platforms in the communityand their industry.

“Deciding to Sell” is a self-help

book for entrepreneurs thatguides readers through thisemotional mine field, pre-pares them for the sales trans-action, and gives the readerconfidence that there is a“life after the sale.” The bookasks and answers virtuallyevery question an ownerneeds to know.

It also is filled withhumorous anecdotes fromMinor’s actual transactions.As one spouse of a soon to beseller responded when shelearned of the sale: “I took avow to marry you for better offor worse. I didn’t take a vow to havelunch with you every day!”

Minor states that the most diffi-cult questions owners face are:

What will I do after I havesold my business?

When should I sell my business?Why should I sell my business?Should I sell my business to a

key employee or a group of keyemployees, or a family member?

Should I feel guilty about myemployees after the sale takes place?

How do I keep the saleprocess confidential?

Can I sell the business myself ?In addition to emotional counsel-

ing and discussing a business’s “valuedrivers,” the book educates ownersabout assembling your advisory dreamteam, valuation and deal stature, the

sales process, andcritical legal issues.

“Deciding toSell” encouragesevery businessowner to adopt anexit strategy andremember thatbusinesses arestarted primarily tocreate wealth. Formost owners, thebusiness is theirlargest single asset.

Minor advisesthe reader to treatit that way and

not as your first-born child. Minorbelieves that every business ownerwill someday leave his or her busi-ness. Minor recommends that sippingchampagne at the closing table is farpreferable to being carried out, feetfirst, on a stretcher.

He supports this argumentthrough the stories of 12 successfulentrepreneurs who sold their compa-nies and are now living their lives ofwealth and freedom.

NSBA members can purchase“Deciding to Sell” at a 40 percent dis-count. For more information or to pur-chase the book, call Melissa Cooney at303-376-6030 or [email protected]. Please men-tion NSBA to receive the discount.

Thanks to Melissa Cooney and NedMinor.


More ResourcesNSBA offers many ways for its members to learn about the issues important to the small business community.

Procurement Opportunities GuideThis book, labeled "an entrepre-neur's guide to selling to govern-ments and corporations," is availablefree of charge to NSBA members.

International Marketing Resource Guide

This guide for 2004 provides themost up-to-date information ondirect marketing and is availablefree of charge to NSBA members.

The Safety Incentives Answer BookThis book helps business ownersreward employees for being safeon the job, doing the best possiblejob, and creating a safety incentives program.

OSHA Answer Book“America’s best-selling guide toworkplace safety and health stan-dards” includes all the latestchanges in OSHA standards.

OSHA Recordkeeping Answer BookContains all the forms needed to administer a safety incentives program.

OSHA 501 CDThe user-friendly guide to record-keeping, training, and compliance.

Note:: More information about all of the resource books are available on the NSBA Web site, www.nsba.biz.

DATE SPONSOR EVENT TIME/LOCATION REGISTRATION INFO

Thursday,Oct. 21

SMC BusinessCouncils

Reception for ElectedOfficials

WestinghouseResearch and

Technology Park,Churchill, PA

5:30-7:30 p.m., $10 per person, RSVP to Kim Flowers,412-371-1500 ext. 224, e-mail

[email protected], or register atwww.smc.org.

Thursday andFriday, Nov.

11-12

Natinonal SmallBusiness Association

Annual MembershipMeeting

Royal SonestaHotel, 300 Bourbon

Street,New Orleans

RSVP to Rosa Wright, 202-293-8830 ext. 207 or

[email protected].

Tuesday,Nov. 16

Council of SmallerEnterprises (COSE)

COSE Caucus,“Election 2004: TheOutlook for Small

Business”

Embassy Suites,5800 RocksideWoods Blvd.,

Independance,Ohio

3:30-5, followed by networkingreception, register online

(www.cose.org) or call COSEcustomer service, 216-592-2222. Register by Nov. 8.

Thursday-Saturday,

Feb. 10-12,2005

National Small Business Association

Small BusinessCongress

The Colony Beachand Tennis Resort,

1620 Gulf of MexicoDrive, Longboat

Key, Fla.

RSVP to Rosa Wright, 202-293-8830 ext. 207 or

[email protected].

NSBA Calendar


Do you want to see your events appear on the calendar? Please send the information to Rob Yunich, 202-293-8830 ext. 224, fax to 202-872-8543, or e-mail [email protected].

Top 12 Features of www.NSBA.biz

1. Read NSBA news as it happens.2. Take action!

3. Read all of NSBA’s issue briefs.4. Stay updated on the organization’s press releases.

5. See when NSBA appears in newspapers and on television and the radio.

6. Sign up for our eNewsletter (left) or join our e-mail list.7. Find out about all of the benefits available to NSBA members.

8. Read about NSBA’s storied history.9. Take advantage of the many resources on the Web site.

10. Join NSBA, if you have not already.11. Nominate yourself or a friend for the 2005 Small Business Advocate of the Year Award.

12. Join a Meetup near you.

1156 15th Street NWSuite 1100Washington, DC 20005

www.nsba.biz

advocate - national small business associationnational small business association 1156 15th street...

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