Who represents the voice of small business in Washington? There is no single answer for the simple reason that the U.S. has about 25 million small businesses, defined by the government as enterprises with 500 employees or less, and no one group can represent them all.
"There are so many groups that represent small businesses because small business is very reflective of the population of this country," said Senate Small Business and Entrepreneurship Chair Mary Landrieu, D-La. "We have to be very broad in our outreach."
There is also disagreement over the definition of small business which has implications for how policy is made. While the government draws the line at 500 employees, Landrieu defines a small business as a concern that employs 50 or less. John Arensmeyer, CEO of the Small Business Majority, says it is one that employs 100 or less. The National Small Business Association follows the government, defining it as 500 or less.
"I often say when people ask me the question, what is the definition of a small business? It really depends on why you want to know," said Todd McCracken, president of the NSBA. "Because if you are talking about lending terms, then you are talking about one definition, if you are talking about record keeping burdens, then it's another definition."
Given those variations, different groups evaluate legislation through their own goggles. The Small Business Majority, for example, has been supportive of Democrats plans for health care reform, while the U.S. Chamber of Commerce, which represents big and small companies, has come out strongly in opposition. "It is almost impossible for small businesses to get on the same page, because there are so many different ways to consider" legislation, McCracken said.
Here is a rundown on a few groups that congressional aides told National Journal they turn to to hear small business voices. Two of the groups, the Small Business Majority and the Main Street Alliance, are profiled in this week's National Journal.
Employee-Owned S Corporations of America -- This group is staffed by lobbyist Stephanie Silverman, a partner at the lobbying firm Venn Strategies. The organization represents the approximately 3.5 million small businesses that file with the IRS as "S corporations," firms that pass the cost of income taxes to shareholders (usually the owner). The group is often asked to testify before Congress on small business tax issues. In the first nine months of 2009, it spent $540,000 lobbying on Capitol Hill.
National Association for the Self-Employed -- The group, based in Texas, represents 250,000 of the tiniest small businesses -- those with less than 10 employees. The group has four registered lobbyists in Washington and spent $690,000 on lobbying in the first nine months of 2009. In 2008, the organization had revenues of $5.3 million, according to IRS documents.
National Federation of Independent Business -- Founded in 1943, the NFIB is the most established small business trade group in D.C., with a foothold in almost every congressional district. The outfit's CEO is Dan Danner, a former Reagan administration aide, who has been at the helm for more than a decade. Susan Eckerly, a former director of regulatory policy for Citizens for a Sound Economy and a former George H.W. Bush administration official, currently oversees NFIB's 10-member lobbying team.
In 2008, the NFIB reported revenue of about $92 million, according to IRS documents. In the first nine months of 2009, it spent $2.3 million on lobbying. The organization's political giving leans strongly Republican, which has led to the perception in D.C. that small businesses are mostly conservative. In the 2008 election cycle, 83 percent of its donations went to GOP candidates, and for the 2010 election cycle, 100 percent has thus far gone to Republicans.
The NFIB says its currently membership stands at 350,000, after reaching a high of 600,000 in the late 1990s. However, two NFIB field representatives told National Journal that membership has slipped to about 325,000 over the past year. The NFIB has faced internal dissension this year from some of its conservative members who disliked that the association agreed to work with Democrats in Congress on health care reform. The group opposes the health care bills that passed the Senate and House.
National Small Business Association -- Founded in 1937, the NSBA is considered one of the more moderate business groups in Washington, says Jere Glover, a former Small Business Administration chief counsel, who is now a lawyer at Brand Law Group. "They have intentionally stayed in the middle throughout their 65-year history," said Glover, who is now on the board of the NSBA.
The association represents about 65,000 member-companies with 13 employees or less and had revenue of $2.9 million in 2007, according to IRS filings. "We try very, very hard to be bipartisan," said Todd McCracken, the group's president. The NSBA's political action committee hasn't been active since the 2004 election cycle, when it gave out just $3,000 to one Democrat and one Republican. "Some groups get more caught up than we do in how we can help our friends on Capitol Hill," said McCracken of their lack of political activity.
The group spent just $75,000 on lobbying in the first three quarters of 2009. In 2008, it spent $339,000 on lobbying. As of Dec. 21, the NSBA had taken no position on the health care legislation. "There are pieces that we like in the Senate bill that are considerably improved from the House bill, but there are other things that give us heartburn," McCracken said.
Small Business Council of America -- This nonpartisan think tank often testifies on Capitol Hill on tax matters affecting small businesses. The Council is led by Paula Calimafde, a lawyer at the Bethesda, Md., law firm Paley Rothman. The Council itself has just 500 members, who are mostly lawyers and insurance agents who represent multiple small businesses themselves. Calimafde says that through its 500 members, it reaches 20,000 small businesses can be tapped to communicate with Congress on a policy issues.
Small Business and Entrepreneurship Council -- This group was previously called the Small Business Survival Committee and is run by Karen Kerrigan, a well-known conservative activist in D.C. Inc. magazine reported that Kerrigan is a "seasoned player in the conservative movement," and asserts she "made a name for herself by playing a key role in derailing [the Clinton administration's] health care plan." Kerrigan's group has aggressively opposed Democratic efforts to reform health care. In the first nine months of 2009, the council spent $190,000 on lobbying.
Small Business Legislative Council -- This outfit is a one-man organization run by a veteran association lobbyist John Satagaj. It represents 61 trade associations, who themselves have multiple small business members. His group spent $120,000 on lobbying in 2009.
U.S. Chamber of Commerce Small Business Council -- The U.S. Chamber is the 800-pound gorilla among business groups in Washington, with annual revenue of $147 million in 2008. About 96 percent of the Chamber's 300,000 members are small business owners, most of whom have 100 employees are fewer. The council, which includes 100 small business owners, is run by Giovanni Coratolo, who previously owned and operated a small business himself.
Though 4 percent of the U.S. Chamber's members are big businesses, these companies pay the biggest share of chamber dues and their interests "wash out" those of small businesses when it comes to broad association policies, said Nicole Kazee, an assistant professor of political science at the University of Illinois at Chicago. Coratolo says that belief is "just not true." While big companies pay the lion's share of dues, "small businesses provide us with the grassroots and the passion and they have a seat at the table and are very involved in what we do" on Capitol Hill.
The U.S. Chamber spent $65.2 million on lobbying in the first nine months of 2009 and has given 88 percent of donations in the 2010 election cycle to Republican candidates. In 2008, 61 percent of donations went to GOP candidates, according to the Center for Responsive Politics.
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