President Obama and I share a deep concern about America's middle class, a demographic that has been particularly hard hit in this economy. But as the president prepares to make his case for reelection in earnest, I urge him to recalibrate some of the rhetoric that is coming off as adversarial to small businesses.
The president suggested earlier this month that government plays a bigger role in the success of businesses than the entrepreneurs who built them. That statement was deeply offensive to many small businesses who have never had anything handed to them .
The statement came just weeks after he insisted "the private sector is doing fine." Small businesses know that by any objective standard, it is not.
Progressive economic populism may be ginning up enthusiasm among my Party's base, but statements like those will not make inroads with Independents.
Instead, they feed into the narrative that the president believes government, rather than small businesses, will lead the recovery effort.
Historically, two-thirds of new jobs have been created by small businesses. In 2001, for example, firms with 20-500 employees led the country out of recession, adding over a million new jobs, even as large employers cut back.
Government has an important role to play in helping to create an environment in which small businesses can grow. This certainly requires policy reforms, but for the president, it begins with the power of words.
Few, if any, American presidents came to office with the unique ability to inspire a nation in the way this president has. He has an opportunity now to use those considerable talents to restore faith and optimism among job creators and to convince small businesses that government is committed to policies that will help them lead the recovery.
Only the president can provide that kind of reassurance, and reassurance is what entrepreneurs need in order to take the kinds of calculated risks that lead to investment and expansion.
Small businesses need predictability on taxes. A just-released Ernst & Young study found that 2.1 million business operators would be adversely affected if tax cuts are allowed to expire on households making more than $250,000 per year. An estimated $200 billion would be transferred from the private sector to Washington, resulting in fewer jobs and lower wages.
Equally important, they need sensible reforms brought to the regulatory process. More than 4100 new federal regulations are currently under consideration by this administration. Collectively, these regulations represent a half-trillion dollars in potential new costs on the economy. Many small businesses are convinced a tidal wave of costly new rules will be unleashed on them should Obama win reelection.
That's an obstacle to investment and a barrier to growth.
Rather than passing new regulations, government can and should do a better job of enforcing existing regulations. The regulatory process itself must be streamlined and be made more transparent so that it's clear not only what the regulation is trying to achieve in terms of benefits, but also what the true costs will be. And government has to do a better job of being a partner with our job creators, rather than an adversary.
The president has a rare opportunity to lead this economy into a period of sustained growth. He can do it by sending a message to small businesses that, rather than making scapegoats of job creators, Washington will be a reliable partner.
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more