Last week’s midterm elections have provided an emotional boost for many small businesses, according to a survey conducted by American Management Services.

About 73 percent of small business owners said they felt more optimistic about the future of their company due to the Republican gains, in a survey of more than 300 small business owners in 25 states following the Congressional elections. The participating companies all employ at least 25 employees and are considered the job-drivers most likely to hire new workers.

Still despite their optimism, just 5 percent said they were considering hiring more workers based on the election results and 64 percent were not planning on adding additional workers at this time – debunking some claims that small business would step up hiring quickly with a new and clear political direction.

Twenty-six percent did indicate they might hire, but are waiting to see if business actually improves.

One St. Louis, Missouri-area business owner stated it succinctly: “I’m from the ‘Show Me’ state and until I see real new business orders, I’m not making a $50,000 bet on a new employee.”

The prospect of potentially lower taxes, enacted job credits and payroll tax holidays does not seem to be having significant effect. Another owner from Houston, Texas stated: “If there is a payroll tax holiday and I save only $5,000 to spend $30,000 to $50,000 per employee, what’s the point of having them sit around doing little or nothing?”

Eighty percent thought small business would be better off going forward with “more Republican influence” and only 4 percent thought it would hurt. Over 70 percent thought the Bush tax cuts would be extended for at least a year based on the multitude of promises made during the Congressional campaign. The Administration’s version of healthcare was widely rejected, with 71 percent of respondents stating that the current bill should either be “repealed or dramatically altered.”

Over 70 percent of owners currently offering full healthcare benefits indicated they would be cutting back or eliminating their contributions to plans in the future, despite the bill’s mandatory fines for owners who fail to provide healthcare.

The Obama administration has countered that most small businesses don’t understand all the provisions of the new healthcare plan. If small businesses don’t understand the plan then our elected officials have clearly failed to explain it, or, as many small businesses believe, the plan is simply out of control and will be an economic monstrosity to implement.

Although these “driver” groups of small businesses are optimistic about the future under more Republican influence, they also believe there will be gridlock on the key economic issues of taxes, spending and healthcare. The large majority of respondents – 86 percent – expect some degree of gridlock and just 14 percent felt both major parties would work together in a new bipartisan effort.

Thirty-eight percent of owners thought the Tea Party impacted or “made a difference” in the election results. But only 5 percent admitted feeling “an affinity” for the Tea Party and 22 percent felt “a little” affinity for the Tea Party.

Only 20 percent thought the recent Republican gains would actually loosen credit for small and midsized companies.

Clearly these businesses are happy with the election results, but unfortunately are not willing to place real money bets on the future. They are taking a very cautious, but upbeat stance on the future of the economy.

The lack of serious small business aid proposals, empty rhetoric, and general intransigence by the Republicans has anointed the Democrats by default as “The Party of Small Business.”

The Obama bill to inject $30 billion into community banks with the primary focus of expanding small business lending, is hardly a panacea. But Republican attempts to block the bill, for a variety of political (although not practical) reasons, amounts to more stumbling and bumbling by the opposition that has produced no worthwhile alternative.

Choosing not to increase taxes is not a stimulus, but an overused bandaid designed to gain votes. Republican candidate Carly Fiorina’s proposal to have a two-year tax holiday may create jobs for her and additional money in the system, but it’s not going to induce any small business owner to add new jobs that weren’t already planned.

Proponents say this bill could produce up to $300 billion dollars in expanded lending to starving small businesses. It will likely produce substantially less, but something is always better then nothing. Before Republican senators George Voinovich and George LeMieux recently announced they would vote for the bill, this revenue-neutral bill was astonishingly blocked by the party of “no.” So far proposals to help small business, from both parties, have lacked the fundamental understanding that small businesses need working capital (aka cash). This lack of cash is the biggest blockage to expansion in the small business sector.

The proposals to expand and speed up depreciation rules, increase R&D write-offs, payroll tax reductions or holidays, and other tax reduction programs are helpful to overall demand, but are far wide of the mark of immediately helping small businesses. The majority of small businesses barely have enough cash for the next two weeks, so programs that offer some help over the next two years are laughable.

Most small businesses are not be able to take advantage of accelerated depreciation because they barely pay any taxes anyway and these proposed tax savings would not be available until the 2011 tax year ends at the earliest. In early 2012 real tax benefits would be achieved, but precious few small businesses would gain. If a business buys a new computer system now for $5,000 and could depreciate it fully in 2011, it would not receive the benefit until 2012 assuming the company is making a strong profit. If not making a profit there is no benefit. Increased R&D expense write-offs are equally unhelpful for most small businesses. If an owner wants to buy new cars or hire more workers there is simply no benefit. A payroll tax holiday for a $40,000-a-year new hire would produce $3,000 in payroll tax savings (based on a payroll tax of 8 percent). Why would a small business owner invest $40,000 in a new employee to get $3,000 back?

Eliminating or reducing the capital gains taxes would help venture capitalists currently flushed with money, but most small businesses are bootstrapped and very few receive outside funding of any significance. The current fight over paperwork reduction is helpful, but will not really produce any cash for most capital-starved small businesses. Business don’t need less paperwork, they need more cash now.

Most experts and economists who propose these marginal fixes have never faced a 50-percent decline in revenue, empty stores, or backlogs that have diminished by 20-80 percent. They have no idea what it’s like to be a contractor or excavator whose business has dried up. Perhaps the economists and politicians who have proposed these marginal aid programs should try to meet a payroll this week with nonexistent or reduced credit lines.

The current fight over tax breaks to the very top tier of small business owners is mostly irrelevant since it represents only 1-2 percent of small businesses. Frankly, although painful to some well-off owners, it’s not going to affect 99 percent of small businesses. These businesses pay almost no taxes, have little or no net worth and right now are faced with failing expectations and sales. Banks are not loaning to them since they aren’t credit worthy.

The Obama Administration issued a $1-trillion stimulus with less than one percent earmarked for small business. Unfortunately that looks good compared to the do-nothing-except-talk attitude of the Republican opposition.

The message from small business to Washington: Stop worrying about paperwork reductions, tax breaks for the few, and get some real money into the system.

For the last two months we have been inundated with photos of oil-covered pelicans and other marine animals victimized by the oil spewing forth from the ruptured BP well in the Gulf of Mexico. The spill in the Gulf is obviously disastrous, but it pales to the economic “oil spill” that has destroyed small businesses over the last two years.

Pelicans and small business owners are faced with surprisingly similar situations: they are victims of disastrous events beyond their control. They are faced with a life-threatening struggle for survival, in which many have already passed due to lack of assistance, or are facing an uncertain future with promises of government intervention.

Both groups are facing tough odds, but right now I’d rather be a pelican.

For small businesses, the Administration and Congress (both parties) have done little to mitigate the disaster; talking a lot about how much they care, but implementing only half measures and largely ineffective programs that only helped a few. Lending levels from commercial banks have seriously declined and have created a lending squeeze for small businesses at a time when they desperately need more credit.

Washington politicians passed a healthcare bill with provisions to aid small businesses in the payment of premiums, but forgot to mention, according to the Congressional Budget office, that only 11 percent of businesses with 25 or fewer employees would get some help. The eligible businesses will receive approximately a third of the total annual premiums back in the form of future tax credits. Why, as a business owner, would I add healthcare benefits for my employees when I will receive only 1/3rd of the additional costs?

The recent jobs bill allows for businesses to receive a $5,000 tax credit next year if they create a $40,000 annual job. This makes no sense. Why would a small business spend $40,000 this year to receive a possible $5,000 tax credit next year?

The Administration has provided depreciation, capital gains, and other tax credits which small businesses can only receive if they are making substantial money. They also won’t be able to receive the benefit until 2011. Such marginal bills are just another clear example of Washington’s promise-much-and-deliver-little-or-nothing approach.

Right now, the SBA (Small Business Administration) has reactivated its Recovery Loan Queue program, aka “get in line and when we have some money we might consider loaning it to you.” It’s also out of funding for its Recovery Act guaranteed loan programs. They should just put a sign up saying: “Window closed, try again tomorrow.”

Recently the House of Representatives passed a $30-billion program to increase the capital of community banks so they could make additional loans to “worthy” small businesses. This sounds good on the surface, but has not passed the Senate and probably won’t in its current form. The $30 billion allocated to community banks is supposed to encourage small business loans due to a lower interest rate on the infused capital, if the banks increase their small business lending. Unfortunately there appears to be nothing that mandates they must make loans to small business.

Another apparent jaw-dropping flaw is that the Treasury is not going to provide guarantees for small business loan defaults under this program, like they do for SBA ones. The SBA’s 90-percent guarantee program was improving banks willingness to make small business loans.

Follow the math: Community Bank Inc. takes $1 million in new capital allowing it to loan out as much as $10 million in new loans. The profit margin on these loans is in the 3-4 percent range, giving the bank an annual return of $300,000-$400,000 on its $1 million in new capital. Interest costs on the loans are as little as $10,000-$60,000, which is a small portion of the increased profitability provided by the new capital. Why would Community Bank Inc. loan to small businesses that are notoriously risky, unprofitable and have no real net worth? If the money is taken at all, much of it will simply go to less-risky loans.

President Obama states regularly small businesses have created 65 percent of all new jobs in the past decade (excluding 2008-2010). By most accounts small businesses are not creating new jobs so we pass an ineffective and patently silly jobs bill.

This year the Administration has made only 60,000 new loans, which covers just .002 percent of the 29 million small businesses. At that rate the government will save more pelicans than small businesses.

Photo credit: An oil-covered brown pelican sits in a pool of oil near Grand Isle, Louisiana June 5, 2010. REUTERS/Sean Gardner

Certainly not the Obama Administration and Congress (both Democrats and Republicans) who have repeatedly failed small business at every opportunity with soaring rhetoric, empty promises, and adopting Lilliputian aid programs.

Most of the twenty-nine million small businesses and their fifty million employees’ won’t be celebrating National Small Business Week because they’re fighting the worst economic crisis in recent history. The twenty-five thousand plus small businesses failing every week, and the owners who have lost their life savings and depleted their 401k’s, will not be celebrating either.

There will be no joy in Mudville for 90 percent of the nation’s small businesses who have received no economic stimulus funding or have been denied credit, additional or otherwise, as well as those who have received no benefit from the stimulus or bailout programs. To be fair, some 60,000 small businesses (that’s .0002 of the total) received loans from the SBA last year, leaving only 28,940,000 who have received nothing but platitudes.

The Administration’s record of failure speaks for itself:

• Small businesses received only one percent of the bailout. ($800 million. Wow, when by recent accounts the automotive industry received $100 billion and only employs two million people.)
• Guaranteed loans from the SBA have only reached the levels of 2006 in the face of the worst economic crisis for small business since the Depression.
• The SBA runs out of loan guarantee authority periodically because of the Administration and Congress’s outright stinginess, while authorizing billions for their big donors on Wall Street and Big Business.
• The recent job bill is a joke, as to assisting small businesses. Small business can receive up to $5,000 over a year for hiring an un-necessary new worker at $40,000 annually. Spending $40,000 to receive a meager $5,000 won’t motivate most owners to hire a useless non-productive employee.
• The recently passed healthcare bill is loaded with provisions that will cost small businesses tens of thousands of dollars depending on their size. If a small business under twenty-five employees pays for insurance, it will receive back as tax credits one third of the actual cost. Unfortunately, according to the highly-touted Congressional Budget office only 11 percent of all small businesses will qualify for the program. An additional problem is small businesses which do qualify will not actually receive the tax credit until next year, while the remaining 89 percent of this category can go pound sand.

Once again the logic fails us. Why would a cash-strapped employee spend $10,000 to receive only $3,000 next year as a reimbursement a year later?

Allegedly businesses with more than 50 employees do have mandatory insurance, but the Administration’s deception here is if one employee signs up for the newly created healthcare exchanges, the employer will have to pay a penalty of $2,000 per employee. If an employer has 80 employees they will pay a penalty tax of $160,000, which apparently is Congress’s definition of free choice?

In Massachusetts, a highly touted good predecessor of the government’s program, insurers recently raised their rates thirty percent in the third year of the program. The Administration and its Congressional cronies should end the charade that this healthcare bill will save small businesses money.

In usual Washington fashion, since the small business program with big banks is failing, the Administration has proposed $30 billion in loan guarantees through community banks … more of the same failing policy.

This bill shores up the capital of small community banks but has no teeth to mandate increased lending to small businesses and few economic incentives to stimulate loans … and of course its two years after the economic depression started.

It’s always easy to criticize, but here are some implementable steps to re-establish small business as the main force in an economic recovery:

1. Forget the current proposed loan guarantee program and allocate $50 billion for a Direct Lending Program run by a Patton-like 24/7 personality who has a directive to it running in 60-days.
2. Loosen the current stringent loan standards to broaden the assistance to the tens of thousands of small businesses that deserve it and need it.
3. Establish a “Get-A-Loan Today” program within the nation’s city halls working with the United States Conference of Mayors to deploy the credit. The SBA should be placed on a crisis mode with regular after-hours and Saturday work schedules to better accommodate small businesses with weekly accountability to the public.
4. Beef up the SBA’s paltry administrative budget to deliver a real economic program instead of a shadow one.
5. Make the SBA Director a cabinet level position, so that small business has a vocal advocate at the White House table. With 60 million employees, the nation’s small businesses deserve at least that much.

You can make all the excuses you want for failed policy, but does this administration have the will to implement a new policy to help the largest segment of our economy?