The National Federation of Independent Business is the nation’s largest small-business advocacy group, representing 600,000 members in all 50 states. Its voice in Washington, D.C., is Dan Danner, an Ohio native and Purdue University graduate, who is the organization’s lead lobbyist.
During a recent visit to the NFIB’s Indiana office, Danner sat down with IBJ to address issues critical to the state’s smallbusiness owners.
IBJ: As chief lobbyist for the NFIB, how do you get the organization’s message to federal lawmakers?
Danner: We are all about grass roots. I think the most effective lobbying tool we have, as an organization, is our members. We have lots and lots of individual, momand-pop and family businesses in every state and in every congressional district.
Because their business is so important to them, because their business is their retirement and their kids’ legacy, they’re pretty passionate about things that impact their business. So they’re very good at sending letters and making phone calls and letting legislators know that what they’re doing has an impact on their business and their livelihood.
IBJ: During your visit to Indianapolis, you met with Gov. Mitch Daniels. What did you discuss?
Danner: The top issue for our members is the cost and availability of health care. It really has been since the mid ’80s. In every poll that we do, it still comes back that they are struggling to find, and be able to afford, health care for their employees. We’re working very hard in Washington to try and look for potential legislative solutions to that. We’re here to talk to the governor about that problem and things he might be able to do.
IBJ: In Indiana, the Legislature is considering a bill that would allow business owners to strip some mandates from their insurance plans in an attempt to offer more affordable coverage. Would business owners really see that much of a savings?
Danner: [Mandates] can have a significant impact in driving up the costs, depending on what mandates you’re talking about. There clearly are people who want to make sure that whatever mandate they favor is in a health care package. On the other side of the scale, there are 45 million people who are uninsured today.
A significant amount of the uninsured are people who have a job, but their employer doesn’t provide health care. And a lot of that is in the small-business arena. For them, it seems they would much rather have some coverage than none. Maybe the policy they have doesn’t include hair transplants or acupuncture. But a basic policy that would provide health screenings and doctor visits, we think that’s a place to start. If it gets more people who are uninsured to have some insurance, that’s a good thing.
IBJ: Nationally, small-business health plans that would enable companies to band together to purchase health insurance are getting consideration from Congress. Do you think it’s important that this legislation pass?
Danner: It’s one mechanism. When it comes to health care, there is no silver bullet. There is no one solution that’s going to fix everyone’s health care problems.
But we believe this is a significant piece that would give small businesses the same economies of scale, purchasing power and lower administrative costs by being able to be a part of a nationwide purchasing pool that would provide more choices and lower costs for small businesses. It is a step in the right direction and would allow small-business owners to have the kind of clout and purchasing power that [a corporation such as] General Motors does.
IBJ: How would you rate the Bush administration and Congress in terms of their support for the small-business community?
Danner: Certainly, the president is a great friend of small business, and has been. Years ago, before he was governor [of Texas] and before he was involved with the [Texas Rangers] baseball team, he was an NFIB member. We had a great relationship with [former] Gov. Bush in Texas. He reached out to our members regularly and did a lot of things targeted toward small business. We’ve had a great relationship since he’s been president, I think more than any other president that I can remember, and I worked for President Reagan. He speaks constantly about small business. That really flows down through the rest of the cabinet. They understand what small business is about.
I think Congress is much more aware, generally, of small business than they were five, 10 years ago. All that having been said, it’s still tough to get things done in Washington because the atmosphere is very partisan and very difficult.
IBJ: The NFIB opposes a measure to hike the minimum wage from $5.15 to $7.25. How would the raise hurt small businesses, and what is driving the opposition?
Danner: If the minimum wage is about low-income, single mothers, there are a lot of federal programs that are much more targeted, like the Work Opportunity Tax Credit and others, that are more effective to help the individuals that the minimum wage is supposed to help. A lot of the people earning minimum wage are kids for whom that’s their first job.
For a lot of the small businesses that are hiring and training those kids, a significant increase would be difficult. The result would be that they would hire less of them. We think that it would have an impact across a lot of our entry-level wage base, and it would be difficult for small businesses.
IBJ: Are small-business owners encouraged that the economy will rebound this year, and are they prepared to begin spending?
Danner: Our members are very optimistic. Optimism is not exactly at the alltime high, but just down a notch. They have plans to expand and hire. They see a pretty robust business environment coming up. We believe there will be expansion and job growth significantly among the small-business sector.
Two of the things that usually have a big impact are prices and sales. They begin to have some price flexibility. Can they begin to nudge their prices up a little bit, which therefore means their revenues are able to go up a little bit? If your sales are better and you have some price flexibility, then you start to get pretty optimistic. They’re going to start to build some inventories. They’re going to look to hire some people.
IBJ: A new NFIB survey details states’ climates toward small business. The results from Indiana show it “has room for improvement.” What led to the sub-par rating?
Danner: This is pure speculation, but I would guess from my position at 30,000 feet, from Washington, that all of the publicity that you have out there about the current state deficit and the issues surrounding the deficit … I would think, would lead people to come to the conclusion that everything isn’t rosy. We’ve got some challenges. We have to get rid of this deficit. To me, without being here every day, that would sort of be logical, that a lot of people would say there probably is room for improvement.
I would not read this with huge concern, other than a probable natural reaction to what they’re seeing and reading and hearing in the news.
IBJ: The estate tax will be fully repealed in 2010 but is set to resume the following year. Does an estate tax affect many small-business owners?
Danner: It does affect a lot. The numbers that talk about the amount of businesses that end up paying a significant death tax are misleading, because what you have to do is look at the businesses that are paying $1,000, $2,000, $5,000 a month in insurance, and/or to estate planners to avoid paying the tax when the principal passes away.
There’s millions and millions of dollars being spent every month, every year to avoid the tax. So to just look at the amount, the 1 percent or 2 percent or 3 percent of businesses that end up paying a significant tax when the principal passes away, that’s the tip of the iceberg. It does have a big impact, far beyond the reported amount of businesses that pay.