5 Minutes With...Karen Kerrigan

There is a lot of chatter about what’s best for small business in relation to the recession and job creation. Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, has access to the decision makers at the center of all that chatter. The council advocates for entrepreneurship by establishing policy initiatives in Washington, DC. As a long-time advocate, Kerrigan has been especially busy keeping on top of relevant legislation this year and she recently spoke with executive editor Daria Meoli to discuss the legislative outlook for small businesses in 2010.

Daria Meoli: What are the federal legislative issues most likely to affect small businesses in 2010?

Karen Kerrigan: There are several bread and butter issues for business owners and entrepreneurs. We’ll be focused on the various policy initiatives that impact business owners’ access to credit and capital because that continues to be a major issue. Tax policy is going to be a major issue. There are tax initiatives that were proposed in the President’s budget that are being debated on the Hill and some will be helpful for small business in terms of expensing provisions, giving them more incentives to invest in equipment and being able to write off those investments more quickly. The President has proposed zeroing out capital gains at tax rates for investments in small business owners and we think that could be good, depending on how Congress structures it. There are also a variety of different tax proposals that will hurt businesses.

For example, the tax rate increases for individuals making over $200,000, if you’re an individual, $250,000 if you’re a couple. Since 90% of small businesses file taxes at the individual level, that’s going to really hit small businesses and its going to hurt. I think another big issue for small business will be regulatory issues and to what extent the Administration continues to move more regulations through agencies. For example, the EPA is looking at regulating carbon emissions, which will impact energy costs in almost every business in this country. So we’re trying to continue to have an impact on that regulatory proposal and encouraging the EPA to say, first look at the impact on small business owners and what it’s going to mean for them as both emitters of carbon, but also from an energy cost perspective.

There could also be Internet regulations coming out of the FCC this year. Congress and the Administration are still supporting banking and financial service sector regulations, and certainly those can have an impact on the costs and availability of credit and capital for small businesses. We think it’s still going to be a very active year for regulations, and new proposed regulations, coming out of the agencies. And our role is to make sure that they are looking at these from a small business perspective.

DM: There is a lot of talk, both in Washington and in media, about small business’s role in helping the country out of the recession and creating jobs. Has that given small business a louder voice in Congress and in the Administration over the past year?

KK: I think so, particularly over the last several months. It first started with the health care debate, and unfortunately that started too late in the game in my estimation. The Administration called in groups that represent small business owners to get our take on the health care bills that were moving through Congress and how they could make those bills better. But at that point I think the dye was already cast on this legislation. It was still a good sign that the Administration cared and I know we have such a strong voice on that issue.

I also think the Administration and Congress are getting the message that it’s not going to be government that creates all these new jobs and it’s not going to be big businesses. As a result, they have been asking us for our input on what needs to be done. That didn’t culminate until recently with a meeting right before the State of the Union address in late January. But I think the Administration has to focus. There not only has to be focus, but there also has to be action on these proposals. You’ve got to move beyond the listening and the taking of the ideas and move to action. I think that’s what small business owners are looking for.