Wed 16 Nov 2011
Two weeks ago, I was part of a lobbying delegation charged with telling congressional staffers the story of small technology businesses in the U.S. The “DC Fly-In” was organized by CompTIA, a trade association focused on advancing the global interests of IT professionals and companies. The goal was to influence laws that affect small businesses. The meetings took place on Capitol Hill in the various congressional office buildings. I live in Maryland so I met with the staff of my two Senators, Ben Cardin and Barbara Mikulski, and my Congressman, Chris Van Hollen. The effort was very worthwhile. Below is a picture of the delegation's motorcade just outside of the Eisenhower Office Building.
Why Small Business Lobbying Efforts are Important
CompTIA's team was extraordinarily helpful in setting up these meetings and provided background information on some of the legislative issues that are affecting small businesses. They allowed each of us to talk to the staffers about our individual stories and concerns.
Big corporations hire lobbyists to work year round to make sure legislation does not affect them adversely. In fact, Congresswoman Loretta Sanchez of California, mentioned the story of Bill Gates. Apparently, Microsoft never used to have lobbyists on Capitol Hill. Then, after the government said his company was a monopoly and tried to break it up, he hired lobbyists - lots of them. She said Microsoft now has four lobbyists for every member of Congress. Most big firms have people calling on congressional staffers all the time to discuss legislation that is important to them. Small businesses need a voice to explain their issues. The squeaky wheel gets noticed.
Meeting the Right People
Having never participated in lobbying before, I was happy to see how open staffers were to meeting with constituents. All you really have to do is call up your member’s office and get on the calendar. CompTIA’s lobbyists were able to schedule appointments for us so it made the task easier. But the process is pretty straight forward. The meetings are almost always with a Legislative Assistant, the people on the office who take pages of notes to share with the Member of Congress.
The Issues - Start Your Egg Timer
These meetings are fast, anywhere from 10-20 minutes. The staffers take lots of notes, sometimes ask questions and then talk about what the congressional member is doing about the issue. Their days are packed with similar meetings so I am not sure how clearly the information is passed along in the form we intended. Nevertheless, that is the process that most constituents and lobbyists go through unless they have a relationship with the Member of Congress that allows one-on-one meetings directly.
With such a limited amount of time, I chose the following issues to talk about:
1. Anti-spam laws
As CEO of email marketing firm MailerMailer, I pay attention to legislation that affects email. The U.S. CAN-SPAM Act provided teeth for the government and companies to crack down on unethical email activities. Canada and European Union have since passed laws that are much more stringent and allow private citizens to file suit. If we did this in the U.S., it would result in a quagmire of challenges for ethical small businesses. The EU law also covers a very large base of privacy issues that include things like tracking user behavior with “cookies” on your computer. I urged our legislators not to go down that path since it is too strict. While our law might need some refinements, the expanded coverage of the Canadian and EU laws is not something we should model.
2. Job Retraining
There is a dearth of qualified engineering talent in this country. While national jobless rates remain at unprecedented levels, there are 450,000 unfilled jobs in technology. These are high paying positions with an average salary of $81,000. Offering (re)training options for the un-/under-employed and incentives for companies to hire retrained workers will help everybody.
3. Taxes, both state and federal, from the full perspective of a small business
You might not know this, but the heavy unemployment has caused most state’s unemployment insurance funds to be depleted. In Maryland, where my business is based, the fund went from $1B to $300M in two years. As a result, the Governor had few options but to increase the unemployment tax. This meant a 2-12% increase on payroll taxes for businesses. If you take an average of 5% as the increase, that means for every $1M in payroll a business now has to pay about $55k in unemployment taxes compared to $6k just two years ago. For hard hit construction companies, that amount is over $100k. This increase amounts to one to three full-time salaries, inhibiting the small businesses’ ability to expand their workforce.
The federal payroll tax for businesses and employees is 6.2% each. Congress passed a one-year reduction for the employee to 4.2%, which expires at the end of this year. I urged Congress to extend this reduction because it offers much needed relief for many companies and employees.
4. Section 179 expensing allowances that are about to expire
The tax code allows a small business to deduct the full purchase price of equipment purchases up to $500k. In 2012, this limit will revert back to $150k unless Congress extends the tax cut. Why is this cut important? Businesses who spend a lot on new equipment typically do so to expand. That means adding more jobs. By keeping this cut in place, small businesses will have more capital on hand to hire more workers.
Is There Any Business Experience in the White House?
The next day, we met as a group with senior advisors on technology and small business to the President in the Eisenhower Office Building next door to the White House. I did not realize that the President had not appointed a single small business owner to his Council on Jobs and Competitiveness, led by GE Chairman and CEO Jeffrey Immelt. Apparently, he had the opportunity to do so - several Members of Congress had nominated a fellow CompTIA member - but it didn’t happen. This point, among others, created an energized discussion. While the advisors were very welcoming with our feedback, the meeting reinforced my impression that there is an shortage of business experience among the President’s staff. Some understand the needs of small business, many do not.
Lobbying is a Process
I was very glad to have participated in this lobbying effort. It made me feel that I was working toward solutions rather than complaining about the problems. The goal of meeting with Congress was to create more awareness of issues that are important to small technology firms. The issues are often the same across most small companies. With the lobbying landscape dominated by large firms with resources to push their interests forward, it is important that small business owners unite in a voice to shed light on legislation that affects us. After all, we employ over 50% of the U.S. workforce.
If you could tell your Member of Congress something, what would it be? Write to Congress and share it in the comments below.