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Washington Watch - July 15, 2009

NASE Asks Senators To Lower Health Costs For Small Business

The United States Senate Committee on Small Business and Entrepreneurship recently held a roundtable to discuss the impact of various health reform proposals on small businesses. Kristie Arslan, Executive Director of the Legislative Office for the National Association for the Self-Employed (NASE), participated in the roundtable along with Senator Ron Wyden (D-Ore.) and other small business owners and advocates.

Arslan spoke about how NASE Members consistently cite health care as the top issue affecting their business, and asked Congress to help the self-employed with the high health care costs that are damaging their businesses. Arslan mentioned the results of a June 2009 survey by the NASE in which approximately 60 percent of respondents chose cost containment as the most important aspect of reform for them and their business.

“Our nations’ smallest businesses not only want health reform but in fact, they need reform in order for their businesses to remain viable,” she commented. “Improving affordable and stability of premiums as well as providing for sustainable cost containment in the overall healthcare system must be a top reform priority.”

Watch archived footage of the roundtable here.

View comments submitted on behalf of the self-employed by Executive Director Kristie Arslan.

SBA Releases Report To President Obama On Small Business Economy

The Small Business Administration's Office of Advocacy recently released its latest edition of facts and figures on the effect of the recession on small businesses. The Small Business Economy report re-emphasizes challenges faced by business owners who were hit by poor sales, inflation, high health costs and more.

In a letter addressed to President Obama, Acting Chief Counsel Shawne Carter McGibbon and Chief Economist and Director of Economic Research Chad Moutray tried to stay positive, despite the grim statistics:

"Of course, even a bad economic environment can be seen as a time to look for opportunities, and entrepreneurs will, no doubt, be able to explore new markets for future growth—or make plans to do so as the economy revives," they noted. "And the economy will revive, with help from America’s entrepreneurs."

A review of their report includes the following information:

  • Average unincorporated self-employment fell from 10.4 million in 2007 to 0.1 million in 2008 and averaged 9.6 million by November and December 2008.
  • Incorporated self-employment remained steady at 5.8 million on average over the 2007-2008 period.
  • Some surveys found small firms expressing less willingness to expand, hire new workers, invest in new plant and equipment, or borrow money, at least in the near term. 
  •  Most small businesses faced a less accommodating credit market, especially in the second half of 2008.
  • Lenders exhibited widening interest rate spreads and tightening terms of lending.

A copy of The Small Business Economy: A Report to the President 2009 can be found here. Click here for the research summary.


Bill For Tech Grants Passes House

The U.S. House of Representatives has passed the “Enhancing Small Business Innovation and Research Act” (H.R. 2965) by a vote of 386 to 41. The bill would update the Small Business Innovation Research (SBIR) program’s eligibility requirements. The program allows small firms to compete for tech grants in federal, state and local governments. Simultaneously, the measure will provide government agencies with additional funding to streamline processes and conduct additional outreach to small businesses.

Ranking Member Sam Graves (R-MO), an original co-sponsor of the bill, said, “Reauthorizing and updating the SBIR program is a step in the right direction to help our small businesses struggling to find capital during this economic recession. SBIR should be designed with open competition, and allow the small business with the best idea to be granted an award. I am very pleased with our success today for small businesses.”

In 2003, the SBA reversed eligibility requirements that prohibited small businesses with more than 50% of venture capital ownership to apply for SBIR funds. Recent estimates indicate that since the restriction was instituted, applications for SBIR grants have been on the decline. The National Institutes of Health, one of the largest grantors to medical technology companies, reported application reductions of 11.9 percent in 2005, 14.6 percent in 2006, and 21 percent in 2007. H.R. 2965 would allow companies to apply for SBIR awards as long as one venture capital company does not own more than half of the small business.

With passage of the bill by the full House, the Enhancing Small Business Innovation and Research Act will now head to the Senate for further consideration and voting.

Small Biz Health Care Roundup

This week's reform debate focuses on a possible tax increase for certain small business incomes and more general health care news:

  • The Wall Street Journal, ReutersBloombergThe Atlantic and CNS News were just a few of many news outlets talking about the effects of a proposed income tax rate increase to help pay for the nation's health care overhaul. If enacted, the increase would apply to individuals earning $280,000 or more and to households earning at least $350,000.
  • President Obama has tapped Dr. Regina M. Benjamin (profile) to be the nation's surgeon general. (L.A. Times)
  • Last week, retail giant Walmart announced its support of a reform effort that includes an employer mandate. Now, business groups are speaking out against the proposal, led by the National Retail Federation. See the related segments on Reuters and BizJournals.com.
  • Members of Congress made a push to the media regarding their opinions on what a health reform package should contain. See content from Speaker Nancy Pelosi (D-Calif.), Sen. Kay Bailey Hutchison (R-Texas) and a joint editorial by House Minority Leader John Boehner (R-Ohio) and Rep. Dave Camp (R-Mich.).
  • Middle-of-the-road Democrats are working to shape health reform. (Politico)


Lawmakers and media outlets across the country rely on and regularly cite the NASE as a source of small and micro-business expertise. Help the NASE make sure the micro-business perspective is heard by taking this month’s poll.

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