Raja Krishnamoorthi, Democratic candidate for the 8th congressional district, has released a plan to help strengthen small businesses and create jobs. Here's more on his plan, courtesy of a press announcement from his campaign:
As president of a small business, I firmly believe that small businesses are the engines of innovation and job growth. Indeed, the facts bear this out. Small businesses have generated 64% of net new jobs in the past 15 years, hire 40% of high-tech workers, and produce 14 times as many patents per employee as large businesses. Today, however, small businesses have borne the brunt of the recession and have seen demand for their goods and services drop dramatically. In addition, they are confronting a severe shortage of capital to invest and hire employees. In order to grow our economy, we must create the conditions for small businesses to once again prosper and create jobs.
I applaud the “Startup America” initiative put forth by the Obama Administration that stands to promote entrepreneurship and expand access to capital for start-up businesses. However, we should do even more to promote small businesses:
- Increase the Demand for Goods and Services
- Support Innovation and Research
- Increase Access to Capital
- Reform Job Training Programs
- Level the Playing Field
Increase the Demand for Goods and Services: The federal government must do whatever it can to put more money into the pockets of consumers and businesses to increase their purchasing power and enable all Americans, including the unemployed, to continue participating in the economy. This is crucial for increasing demand for the goods and services that small businesses create. As President Obama has proposed, Congress should, among other things, extend a payroll tax cut not only for employees, but also for employers. In addition, Congress should extend and reform unemployment insurance to enable fully and partially unemployed workers a chance to rejoin the job force, while maintaining their spending power.
Support Innovation and Research: The Small Business Innovation Research (SBIR) program currently directs a modest 2.5% of extramural research budgets of federal agencies for small businesses to perform government R&D. Given the program's success so far, we should increase funding to SBIR. I have seen SBIR at work in the growth of our own business. It’s a win-win for the government and small businesses since the government benefits from high-quality research and development, while small businesses get to perform ground-breaking research into innovative products and services. In addition to expanding the SBIR program, we should also increase the R&D tax credit from 14% to 20% and adopt other programs to reward innovative R&D in America.
Increase Access to Capital: Lending by small community banks is crucial to the health of small businesses; however, community banks have cut back their lending, in part because stringent new regulations on big banks have also impacted small banks. Congress must find ways to retain protections to avoid a repeat of the 2008 financial crisis, but it should also avoid penalizing small lenders that did not make the risky bets that caused the financial crisis. In addition, the Small Business Administration, a crucial partner to small banks, is seeing large cuts to its budget in the Republican Congress. Small banks need a strong SBA to partner with them to lend to small businesses; therefore, I’d oppose large, indiscriminate cuts to the SBA.
Reform Job Training Programs: Today, the federal government spends almost $20 billion across at least 47 different job training programs; unfortunately, however, many workers and employers do not benefit from these programs. Congress should examine ways to consolidate these programs and direct at least a portion of their funding to small businesses for on-the-job training of unemployed workers. Today, the cruel irony is that there are 3 million job vacancies, even though 14 million Americans remain unemployed. The challenge is to place more of our unemployed workers in these job vacancies, and on-the-job training programs can help make progress toward this goal.
Level the Playing Field: Small businesses need to have a strong voice in Congress for measures to ensure a level playing field when they compete with other businesses, large and small, foreign and domestic. As a small businessman, I will be among those that advocate for tax policies, regulations, and laws treat small businesses fairly, instead of favoring businesses which hire the most powerful lobbyists and tax attorneys. For instance, I will advocate for laws that fight anti-competitive practices that hurt small businesses. One example is the Small Business Franchise Rights Act, which is a bipartisan bill that fights anti-competitive practices directed at small business franchises by large franchisors. In short, I will do whatever I can to help small businesses survive and thrive in America.
Krishnamoorthi is going up against former Assistant Secretary for the Department of Veteran's Affairs Tammy Duckworth for the 8th congressional district Democratic nomination.