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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Small Business Voters: An Opening for Dems?

Stacy Mitchell has an article of interest for Dems who want to get a larger share of small business voters, up at Bloomberg Businessweek. Mitchell removes the facade of two organizations which purport to serve small business men and women, but throw them under the bus when big corporations give the nod.
Mitchell cites the examples of the Pennsylvania Chamber of Business and Industry and the PA chapter of the National Federation of independent Businesses, both of which opposed Gov. Rendell’s plan to cut the business income tax rate for small businesses. The plan would also close a loophole allowing multi-sate retail chains and banks avoid PA taxes, and big biz just wasn’t having it.
But it’s not just the PA affiliates, as Mitchell explains:

The U.S. Chamber of Commerce and the NFIB, together with their state-level affiliates, are among the country’s most powerful lobbying forces. While they claim to speak for small business, a look at their lobbying record suggests their primary allegiance lies elsewhere. The U.S. Chamber has fought to preserve offshore tax havens that only multinationals can use, leaving small businesses at a disadvantage. Both the NFIB and affiliates of the Chamber have lobbied in various states to maintain loopholes like Pennsylvania’s. And neither group has contested the multi-million-dollar tax breaks cities routinely bestow on big-box retailers to the detriment of their independent rivals.
Although the Chamber says it represents 3 million small businesses, that’s misleading. The figure includes members of local and state chambers, which have no say over the national group’s activities. The U.S. Chamber’s direct membership includes some 300,000 small businesses, or about 1 percent of the total nationwide. While small businesses are prominent in its press releases, they’re scarce in its boardroom; the vast majority of the Chamber’s 125 board members represent large corporations. “Our policy priorities are closely aligned with our small-business members,” and the Chamber has a committee that focuses on them, says Giovanni Coratolo, the Chamber’s vice-president for small-business policy.

And with the NFIB, the same priorities are reflected in political contributions:

All 300,000-plus members of the NFIB are small businesses. Yet their politics are out of sync with the broader small-business community. While an American Express poll shows that 32 percent of small-business owners are registered as Democrats and 33 percent are Republicans, 85 percent of the NFIB’s campaign contributions went to Republicans in 2008, according to the Center for Responsive Politics…

And both groups have provided limp support for the kind of credit reform small business people desperately need, according to Mitchell:

The NFIB’s close ties to Republicans may explain its effort to downplay the effect of the credit crisis on small businesses. Ever since President Barack Obama proposed the small-business lending bill now stalled in the Senate, the NFIB has said access to credit is a low priority. An NFIB survey, though, showed that 55 percent of small employers sought loans in 2009, and over half of those couldn’t meet all of their borrowing needs. While the NFIB and the Chamber say they don’t oppose the lending bill, neither has done much to persuade Congress to vote for it. Compare that with the full-court press both groups waged against the financial reform bill. Small businesses paid dearly for Wall Street’s excesses and, as frequent users of credit cards and home equity loans to finance their growth, have much to gain from stronger consumer protections. Yet the U.S. Chamber and NFIB repeatedly cited the interests of small business as a reason to oppose the bill.

Mitchell reports that some local affiliates of both groups have decided to pursue their goals without the support of the national organizations. In addition, new groups like American Independent Business Alliance and the National Small Business Assn. are filling the void left by the chamber and NFIB in representing the interest of small business people, many of whom like the health care reform legislation passed by the Obama administration.
Democrats have a lot to gain by standing tall for the interests of small businesses and by supporting the truly independent organizations which genuinely represent their interests. In so doing, Dems can increase their share of a key constituency — one which also is instrumental in launching the economic recovery America so urgently needs.

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