Providing For Consideration Of H.R. 2352, Job Creation Through Entrepreneurship Act Of 2009
Floor Speech
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Ms. FOXX. Mr. Speaker, I thank my colleague for yielding time, and I will yield myself such time as I may consume.
Mr. Speaker, I have read this bill very, very carefully. It's a bipartisan bill supported by some of my colleagues on this side. I think that the intent of the bill is very positive. I know the folks who are interested in this bill and know that they have the best intentions.
But I want to say that I think that, as a former small business person, and someone who has administered programs such as these through my work as a former community college president, a university administrator, and having been on a school board and dealt with agencies that operate these kinds of programs, I want to say that I have some concerns about this bill and about the rule.
I am concerned that because this was a bipartisan bill, that we have a closed rule on this. I think that it would have been a great opportunity for the majority to have given an opportunity for us to offer a lot of amendments to the bill, have a great deal of discussion on it. And I'm very concerned about the process, again, because we haven't gone through a process that I think would have been fair to our side of the aisle.
However, I also want to say that I think that, while this bill has a great title, and the intent is a good intent, that what small businesses, the engine of our economy, need are things that are different from this bill.
We're going to have many different programs in here. As I said, I went through the bill very, very carefully. I looked for ways that it's really going to create jobs, and I can't see the kind of accountability that I was hoping to see in the bill and as we talked about yesterday in the Rules Committee.
We're going to be creating, I think, a lot of jobs for bureaucrats; but it's very difficult, again, to see how we're going to create jobs in the small business arena. And I think that we come from two different world views in terms of how we approach this kind of an issue.
We know that people are hurting in this country. We know that many jobs have been lost, and we'd like to see those jobs recovered. And we know that at least half of the jobs in this country are in small businesses. And I talk to those people every day, and they tell me they're struggling, they're spending down their savings, the individuals are spending down their savings. They're doing everything they can to stay in business.
I talked to a gentleman this morning who had geared up in anticipation of receiving stimulus money to repair roads and bridges in North Carolina, and he doesn't understand why none of that money is coming down the pike.
So, again, people in small business are struggling, and they want to do something to keep their people employed. I just don't believe that this bill is going to do it.
I also don't understand, again, why this bill has been scheduled in a getaway week, when, again, with a process that is not as open as it could have been, in a noncontroversial bill, where we could have discussed it and perhaps amended it and come up with a way to really help small businesses.
So, Mr. Speaker, I'm going to urge my side of the aisle to vote ``no'' on the rule, and we'll discuss more reasons why as we go along during this debate.
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Ms. FOXX. Mr. Speaker, I thank my colleague for correcting my misstatement about the rule. And I'm curious about the number of new jobs that the Small Business Administration is said to have created in the past. I'm very curious to know how much each of those 73,000 new jobs cost us, because we know that in much of the legislation that has been passed this year, there has been a great cost to the jobs. And, yesterday, in the debate in the Rules Committee, everybody agreed that there has been very little accountability and evaluation on the part of the Small Business Administration in terms of the effect of the Small Business Administration in terms of pinning down numbers.
We know, by the Small Business Administration, that small businesses employ about half of U.S. workers. Of 116.3 million nonfarm private sectors in 2005, small firms with fewer than 500 workers employed 58.6 million, and large firms employed 57.7 million. Firms with fewer than 20 employees employed 21.3 million. And what we know, from talking to these people, is that what concerns them is not so much that we have the government out there saying, we're from Washington and we're here to help you, but there are very specific things that small businesses tell us that they would like.
Let me talk a minute about the death tax, for example. We all know that the voice of small business on Capitol Hill is NFIB, and NFIB has been talking for a long time about the permanent death tax repeal. They did a member ballot recently, and 89 percent of small business owners said they want full repeal of the death tax.
Opponents of permanently repealing the death tax claim eliminating this tax will do nothing to stimulate economic growth. But we know that the studies that have been done tell a very, very different story.
Yet, our colleagues across the aisle are adamantly opposed to eliminating the death tax. Yesterday, in the Rules Committee, my colleague, Mr. Sessions, talked about this, and he was corrected by our colleagues on the other side of the aisle, saying, no, this is not an important issue to small businesses; that it's not one of their top issues. But we know that it is. And there's a lot of research to show that.
I will talk some more again about the facts that we have about what small businesses would like to see us do.
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Ms. FOXX. Thank you, Mr. Speaker.
I appreciate very much the comments by my colleague, but I want to say again, going back to my comments that my colleague from Illinois made about the title of this bill, Job Creation Through Entrepreneurship Act, if what we really are about here is job creation, then we would be embracing Mr. Roskam's amendment because we know, from a study done by Dr. Douglas Holtz-Eakin and Cameron Smith, these numbers: Repealing the Federal estate tax would increase small business capital by over $1.6 trillion. We would increase the probability of hiring by 8.6 percent. We would increase payrolls by 2.6 percent. We would expand investments by 3 percent. We would create 1.5 million additional small business jobs. We would slash the current jobless rate by almost 1 percent--0.9 percent.
So, again, there is a different world view here. The world view of the majority is the government is going to do this. The world view of our side is allow the people to keep more of their money. They will create the jobs. It will be a minuscule number of people who would ever use the resources that are going to be created with this bill.
Again, the intent is good. Nobody is discounting the good intentions of the authors of this bill. However, we could do a lot more by not creating more bureaucracy, by not taking more money from the people of this country and then having the government deciding how to spend it.
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Ms. FOXX. I yield myself such time as I may consume. Again, I want to say that I know that the motivation behind this bill is good, but we know not how many jobs are going to be created. We know not how many people are going to be assisted by this bill, because there is nothing in the bill that directs that. It's only after 8 years that there will be any accountability for the money being spent in this bill.
I was encouraged yesterday when my colleagues acknowledged the fact that we've had no accountability by the Small Business Administration for how they spend the money. And I thought, Well, we're going to have some great accountability in this bill. But when I read the bill very carefully, I saw that it's only after 8 years that performance standards are going to be established for the projects to get this money.
We have no idea how much money is going to be spent in administration. We don't know how many people are actually going to be served. But, as my colleague from Illinois, Mr. Roskam, said, we know how much would be accomplished by eliminating the estate tax. And let me talk a little bit more about that.
We know that if the owner of a small business with assets of $3 million passed away this year, the heirs of the estate would have to pay Federal estate taxes of about $460,000. Why? They've have already paid taxes on that money twice--and they're going to be paying again. Why? Just because the Federal Government says so.
Now the May, 2006, Joint Economic Committee Study has told us that a primary reason why small businesses fail to survive beyond one generation is the estate tax. Close to two-thirds of respondents--64 percent--in one survey reported that the estate tax makes survival of the business more difficult.
Eighty-seven percent of black-owned firms and 93 percent of manufacturing firms responded that the estate tax was an impediment to survival.
A survey of family business owners by Prince and Associates found that 98 percent of heirs cited a need to raise funds to pay estate taxes, when asked why family businesses fail.
If only a small percentage of the 550,000 small businesses that fail annually are attributable to the estate taxes, the cumulative number affected over time could be substantial.
In the context of the survey and tax data described here, it's easy to see how the estate tax has contributed to the failure of thousands of small and family-run businesses.
A 2004 survey of Hispanic business owners by the Impacto Group, 66 percent of respondents said the estate tax affects their ability to meet company goals by distracting their attention and wasting resources. Half of all respondents in that survey report knowing of a Hispanic small business that has experienced hardship because of the estate tax liability, including selling off equipment or the business. One-quarter of respondents said they themselves would sell part of the business to pay the tax, and 10 percent would delay expansion of the business.
So we know, again, that by getting rid of the estate tax, we would be saving thousands of small businesses, creating millions of jobs. And it is germane to this bill.
Another issue that is of great concern to small businesses--and I talked to a lady this week about it. She had read about the required paid sick leave bill that is before the Congress right now. And she said, I'm struggling. She said, I have been paying my salaries of my employees out of my savings. If this bill goes through, we will have to shut down because we can't afford this--we already give some sick leave. And we're certainly very good to our employees. They can use their vacation for sick leave. But if we're mandated to do 7 days of paid sick leave, and we know that, in many cases, people will simply take those days whether they're sick or not, then we will shut down our business.
So this Congress is acting over and over and over again to kill small businesses, and they offer us a very small bill here, as my colleague again said, that sounds wonderful. However, what it's going to do is be out there as an idea that will help small businesses, but they're going to ignore all of the things that prove they will help small businesses.
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Ms. FOXX. I yield myself such time as I may consume. I want to just mention one more issue that comes to me all the time, and I know it has to be coming to other Members of Congress as they talk to small business owners and even large business owners, and that has to do with the issue of regulations
There's a study entitled: ``Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State,'' which is issued by the Competitive Enterprise Institute. And just a few statistics about it because, again, we could be dealing with some issues that would reduce the role of regulations in the lives of small business owners.
I want to bring that up because this is a third point I think that hurts our small businesses tremendously. Given that in 2007 government spending stood at $2.73 trillion, the hidden tax of regulation now approaches half the level of Federal spending itself. Regulatory costs rival estimated 2007 individual income taxes of $1.17 trillion.
Of the 3,882 regulations now in the works, 757 affect small businesses. Regulatory costs of $1.16 trillion absorb 8.5 percent of U.S. gross domestic product.
Regulations dwarf the $150 billion economic stimulus package passed in 2008, and rolling back these would constitute a deregulatory stimulus.
So I would like to urge my colleagues on the other side to let us look at this issue of regulatory costs and look at ways that we can do this.
I've introduced a bill that would require more transparency in the cost of regulations, both to government and to the private sector. If we really want to help small businesses, then I think that that's something that we should be doing. It's H.R. 2255, Unfunded Mandates Information and Transparency Act. I'd like to work with my colleagues on this and other issues where we really could help small businesses.
Again, I know the intent of the underlying bill to this rule today is well-intentioned, but I believe that we have many other ways that don't cost any money to help small businesses.
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Providing For Consideration Of H.R. 2352, Job Creation Through Entrepreneurship Act Of 2009
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Ms. FOXX. Thank you, Mr. Speaker.
The main point of the amendment is to give SBA loans to the dealers to help them buy their own inventory since they're on the hook for the cost of their inventory since the manufacturers are going under. It is short and sweet. It's a take it or leave it or build on it. It would waive PAYGO. They waived PAYGO to bail out the manufacturers, but they don't want to waive PAYGO to help out the dealers when the manufacturing plan fails.
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