Who truly speaks for small businesses?

By John Stoehr
May 22, 2012

Everyone knows that small businesses hate President Obama’s historic healthcare reform law, right? At least that’s what the nation’s leading small-business advocacy group would have you believe.

Joining 26 states, the National Federation of Independent Business challenged the law all the way to the U.S. Supreme Court in March. It claimed the “individual mandate” is unconstitutional and would bankrupt small businesses with unnecessary costs.

Yet while the NFIB claims its multimillion-dollar lawsuit is on behalf of job creators and small businesses everywhere, it’s unclear whether small businesses genuinely support the NFIB position. A close look at its record suggests that the NFIB uses the politically valuable mantle of small business to pursue an agenda that may take its cues from elsewhere.

For one thing, many of its 340,000 members, most of whom employ 20 or fewer workers, have already benefited from the law. According to a March report in the Wall Street Journal, members have seen costs go down thanks to tax credits that were built into the law. Small firms in industries like advertising have also been able to compete with large national companies for talented employees. As one member told the WSJ: “[The NFIB is] doing a very big disservice to their members” by opposing the healthcare law.

For another, the NFIB has a record of lobbying for issues that benefit big businesses, not necessarily small ones. Consider a widespread state tax loophole that lets big-box retailers like Wal-Mart and Home Depot transfer income to out-of-state subsidiaries. This loophole often allows the chain retailers to pay no state income tax, while small businesses do. Yet the NFIB has fought against closing such loopholes.

Moreover, small businesses generally favor some kind of regulation, because such standards often make them more competitive with big companies. The NFIB is opposed to regulation on principle, but it also claims, as many Republicans do, that the threat of regulation on entrepreneurs and job creators – they have a habit of calling it “regulatory uncertainty” – has kept businesses from hiring and thus from stimulating the economy. But observers across the political spectrum say this is a canard. Regulation isn’t preventing businesses from hiring. Poor sales are.

Perhaps it is no surprise that the NFIB fights for issues that the Republican Party as well as big corporations also fight for: deregulation, lower taxes and tort reform. According to the Center for Responsive Politics, the NFIB’s political action committee has raised over $20 million since 1998. In 2010, nearly 94 percent of contributions went to Republicans. This year it’s 98 percent. It spent $9.5 million lobbying against the healthcare reform bill in 2010. And last year, the NFIB received $3.7 million from Crossroads GPS, according to Bloomberg. Crossroads GPS is a non-profit with close ties to Karl Rove, the political adviser of George W. Bush.

Given the partisan affiliations and positions, it’s unsurprising that other groups who claim to speak for small business, such as Family Values at Work, cast a gimlet-eye at the NFIB. So do small-business owners and small-business advocacy groups. Frank Knapp, president of the South Carolina Small Business Chamber of Commerce, called the NFIB a “small-business pretender” and “lapdog” of the U.S. Chamber of Commerce. In April, J. Kelly Conklin, a New Jersey cabinetmaker, wrote in the Hill: “Whether we’re talking about health care or taxes (or both at the same time), NFIB always seems to side with the big fellas – big insurance, big banking, big business – not little guys like me. Why? I don’t know.”

Perhaps few do.

What’s more certain is that calling yourself a small-business group while serving the interests of big business has political advantages.

A Gallup poll showed most Americans trust small business to create jobs, more than they do large corporations or the U.S. Congress. That kind of public opinion explains why the major parties can’t agree on anything unless it has something to do with small business.

And it explains why the NFIB, in speaking for small business, hopes to be seen as speaking for the American people – even though, if the Supreme Court overturns the healthcare law, it’s the American people and their trusted small business who may suffer most.

PHOTO: Buttons reading “Repeal Obamacare” are displayed at the American Conservative Union’s annual Conservative Political Action Conference (CPAC) in Washington, February 9, 2012. REUTERS/Jonathan Ernst

13 comments

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Muddling the line between big business and small business has been a specialty of the GOP for over 40 years now. They just call it all ‘business.’

Problem is, small businesses generally are in direct competition with big business for capital, customers and employees. Small business really has very little in common with big business. If I’m a guy selling hot dogs on the street in front of a Burger King (a chain now owned by a Brazilian private equity firm), they want me gone and I want them gone. It’s really that simple.

Posted by AlkalineState | Report as abusive

Someone just had to put their hate and jealousy of the GOP. Could not still with the facts and issues.

Posted by ALLSOLUTIONS | Report as abusive

[...] And at Reuters, John Stoehr is asking, in light of a challenge to the health care law: Who truly speaks for Small Businesses? [...]

For a long time, I’ve thought we really need a new definition of what a small business is. The Republican and far too many Democrats don’t represent their constituents, they represent only the monied interests. With the monied interests controlling 2/3 of US assets, we have a long road to hoe to put us back on the right course. My own effort consists of not buying in any of the big stores if possible and doing my best to buy only American made products. It may not be much, but it’s what I can do. Outfits like the NFIB don’t care about what happens in this country, but I do.

Posted by palmer1619 | Report as abusive

[...] Who truly speaks for small businesses? – Reuters Blogs (blog) [...]

Allsolutions, why would anyone be jealous of the GOP? No offense, but most of the republicans I know are on hillbilly-welfare or disability of some sort. Take a drive through the trailer ghettos of Oklahoma some time. Or the meth dirt roads of Tennessee. foxnews is helping to breed an entire generation of brain dead tweekers in middle America. Jealousy is not the term that comes to mind when thinking about today’s GOP.

Posted by AlkalineState | Report as abusive

Gosh, I’m glad I ran across this article! Small Mom&Pops need sales to improve. My customers are middle class who use HELOC or get signature loans at community banks & credit unions. My customers are struggling so I’m whittling the overhead, so the other mom&pops I do biz with have to whittle – vicious circle. Trying to stay healthy til 2014 when the state insurance exchange starts. Regards, mom

Posted by Egladys | Report as abusive

[...] for the NFIB, said the cost of …What Owners Are Really Saying at Small Business WeekInc.comWho truly speaks for small businesses?Reuters Blogs (blog)all 179 news [...]

We’re all different, there is no such thing as a “typical small business” or any one or two or three trade groups that can claim to represent or control us…not unless there is unity in cacophony.

My business is a 35 year NFIB member, but they don’t represent us in totality anymore than the NRA represents my personal feelings on guns, and that’s with a benefactor membership.

We’re all different. Gun loving Republican small businessmen can believe that there are lot of good things in Obamacare and that what isn’t good can be choked out like the 1099 reporting provision that was recently rescinded.

We have jabbered about universal health care coverage for 2 generations and nothing got done. Obamacare is a start
and with everyone swimming together in the risk pool, there’s a pretty good chance it will work…or at least work better than our current dysfunctional system.

I don’t regret our NFIB membership though, there are some issues they stand up for small business on.

Posted by CaptnCrunch | Report as abusive

As a small business owner my health insurance rates have gone up annually without abating. It’s at least thirty percent higher versus two years ago, and only a few of our employee’s that are in general labor positions can afford the co-pay charges. Every penny counts for most folks, and people shouldn’t have to choose between health insurance and food on-the-table. This is waaaaaay past due, and an afront to our fundamental rights for affordable care. I welcome the much needed changes to the helathcare system that Obama has championed, and would say the way he got this to pass was the only way. The Republicans will squander every last penny of our hard-earned money for Wars, and jobs for cronies. They don’t give a damn about you and I and Mitt Romney is the Queen Bee of what’s wrong with Republicans. They represent a class of folks i have no desire to associate with, and will stab you in the back in a heartbeat. It’s time they got the heck out of politics, or better yet, time for another party that’s less radical.

Posted by schmetterling | Report as abusive

For another, the NFIB has a record of lobbying for issues that benefit big businesses, not necessarily small ones. Consider a widespread state tax loophole that lets big-box retailers like Wal-Mart and Home Depot transfer income to out-of-state subsidiaries. This loophole often allows the chain retailers to pay no state income tax, while small businesses do. Yet the NFIB has fought against closing such loopholes.”

I needed to read no further. This says it all.

Posted by LBK2 | Report as abusive

[...] a competitive business decision on whether to offer coverage or not. Individuals ought to …Who truly speaks for small businesses?Reuters Blogs [...]

“Small business” should not include organizations that have a gross revenue over $10 million or more than 100 employees and contractors combined.

Generally, most small business people, using the above definition, do not think the Republican Party operates in their interests. General Electric is not a “small business” and neither is Bain Capital.

Posted by usagadfly | Report as abusive

Speaking for “small business” is, in fact, a big business.

Posted by Bob9999 | Report as abusive

As a former small business owner of two separate businesses, I believe the anti-Obamacare rhetoric is political and not in the service of small business.

I tried to hire as many part time employees as possible to avoid paying health insurance premiums. And when I had to hire full time, I prayed they’d never use the insurance. I am not kidding or being cute here. If they did, I knew my rates would go through the roof and I might have to drop the policy altogether. Then how would I insure MY family?

I would LOVE a 35% tax credit on premium $ I spent. And, I’d be counting the days until the small business marketplaces, SHOP, came in 2014. Small business will have the clout of large businesses in buying power with insurance companies. And no more pre-existing condition torture.

If small business are against Obamacare, they are listening to talk radio hate speech. The law brings RELIEF!

Posted by ArtAsInquiry | Report as abusive

As a former small business owner of two separate businesses, I believe the anti-Obamacare rhetoric is political and not in the service of small business.

I tried to hire as many part time employees as possible to avoid paying health insurance premiums. And when I had to hire full time, I prayed they’d never use the insurance. I am not kidding or being cute here. If they did, I knew my rates would go through the roof and I might have to drop the policy altogether. Then how would I insure MY family?

I would LOVE a 35% tax credit on premium $ I spent. And, I’d be counting the days until the small business marketplaces, SHOP, came in 2014. Small business will have the clout of large businesses in buying power with insurance companies. And no more pre-existing condition torture.

If small business are against Obamacare, they are listening to talk radio hate speech. The law brings RELIEF!

Posted by ArtAsInquiry | Report as abusive

As a former small business owner of two separate businesses, I believe the anti-Obamacare rhetoric is political and not in the service of small business.

I tried to hire as many part time employees as possible to avoid paying health insurance premiums. And when I had to hire full time, I prayed they’d never use the insurance. I am not kidding or being cute here. If they did, I knew my rates would go through the roof and I might have to drop the policy altogether. Then how would I insure MY family?

I would LOVE a 35% tax credit on premium $ I spent. And, I’d be counting the days until the small business marketplaces, SHOP, came in 2014. Small business will have the clout of large businesses in buying power with insurance companies. And no more pre-existing condition torture.

If small business are against Obamacare, they are listening to talk radio hate speech. The law brings RELIEF!

Posted by ArtAsInquiry | Report as abusive

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