Quantcast
Get breaking news alerts via email

Click here to manage your alerts
Joyce M. Rosenberg: Small-business outlook for Obama’s 2nd term


< Previous Page


The economy and the federal budget

Obama may not be able to do much to get the economy growing much faster than it is now.

Join the Discussion
Post a Comment

"I think both candidates were way overselling what they can do to create jobs and help the economy," says David Primo, an associate professor of political science and business administration at the University of Rochester in New York.

The federal deficit is part of the problem. Obama has to curtail spending — but federal government spending is equal to nearly a quarter of income produced by U.S. citizens. Cut government spending, including federal contracts, and small businesses lose revenue and may cut jobs. Many have put hiring plans on hold because of uncertainty about what’s known as the fiscal cliff — the combination of severe budget cuts and the expiration of Bush administration tax cuts that takes effect with the new year.

But if the deficit isn’t dealt with soon, taxes will have to rise in the coming years. That would leave small-business owners with less money to invest in their companies.

"That is ultimately going to be a huge problem. As government grows and the size of the deficit grows, that’s when you’ll see a drag on economic growth," Primo says.

Regulation

Look for Obama to continue a mixed record on regulation — creating more rules that small businesses will need to follow, but also being vigilant that regulations won’t be too burdensome.

"On the plus side, Obama has signed a handful of executive orders directing agencies to review and ease, where possible, regulations that have an undue burden on small business," says Molly Brogan, a spokeswoman for the National Small Business Association, a group that lobbies on behalf of small companies. But she also says government agencies keep creating regulations that many small businesses find problematic, for example, proposals from the Equal Employment Opportunity Commission that prohibit employers from requiring that workers have a high school diploma or conducting background checks.


story continues below
story continues below

"I don’t think there’s going to be a massive amount of difference for small businesses," says Catherine Rudder, a public policy professor at George Mason University in Fairfax, Va. "Obama in his policies is quite moderate and quite willing to compromise."

Small-business owners who are unhappy with regulations created during Obama’s first term are likely to find ways to get around them — particularly when it comes to health care. Some owners reluctant to buy health insurance for employees will make sure their companies don’t have the equivalent of 50 full-time workers — the threshold at which they’d have to provide coverage under the health care law.

But owners will be happy with the Obama administration’s regulations that are designed to help them — lending and counseling programs at the Small Business Administration will continue to be a priority.

"They can expect continued policies to foster small business," says Caroline Daniels, a lecturer in entrepreneurship at Babson College.



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Login to the Electronic Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.