We are the Entrepreneurs

My thoughts these days go to the core of being a Research Entrepreneur. With the Small Business Innovation Research program (SBIR) finally secure--knock wood--for another six years, there's a little time to reflect on where I came from and where I'm going. You see, four years ago, I was just an unemployed, disillusioned, interdisciplinary PhD. My terminal degree is ostensibly in Musicology with an Emphasis in Cognitive Science, followed by a two-year post-doc in Linguistics. I had never heard of SBIR.

I was unemployed because I had shirked my underemployed status as janitor Adjunct Professor of Music at Chapman University teaching 80 students a term for a gross salary just shy of $15,000/year, with no job security beyond one term at a time, no office, and no health or retirement benefits. Frankly, I may have been better treated as a janitor. That part's the disillusionment.

Despite the common view that professors are a well-paid, secure, and sheltered bunch, that's the reality. Far more end up in adjunct servitude than land tenure-track posts. There's the satisfaction for you of society's promise to those who go through college, to expect their hard work will be rewarded with a decent job, like an apprentice paying their dues to train for a lifelong vocation. This promise is fantasy.

I laugh sadly therefore at Mitt Romney's recent response to a college student at a town hall meeting in New Hampshire that "what I can promise you is this. When you get out of college if I'm president, you'll have a job. If President Obama is reelected, you will not be able to get a job." [Story embedded: skip to 1:40]

The promise is hollow whatever end of the political spectrum it comes from, unless of course someone is proposing a nationalized workforce, and guaranteeing employment. But I haven't heard that, nor would I necessarily endorse it. Indeed, politicians these days seem to be stepping back from bold and specific promises. Our own governor here in Wisconsin once spoke of creating 250,000 new jobs in four years.

Governor Walker gave a talk at last spring's National SBIR Conference in Madison, in which I was pleased to hear a specific pledge not only of new jobs but of 10,000 new businesses in the state. A worthy goal. My proposal has been that one fourth of those new jobs should come from new businesses. According to the Kauffman Foundation, new firms these days create 4.9 jobs on average (my firm's current count is 4.3 FTE). Do the math: 1/4 x 250,000 = 62,500 / 4.9 = 12,755 new firms in the state.

But the promise of jobs as a reward for schooling and hard work is not only hollow; it's misguided. Jobs are not out there like commodities for us to choose among and purchase. Rather, each of us chooses a path to follow. The path ought be defined in part by our talents and skills, and by that which drives us beyond our limitations to make a lasting contribution, regardless of schooling or credentials. Sure, some of us will get jobs that align with our interests. But others of us will follow our passion, define our life's work, and become the job givers. We are the entrepreneurs.

In my view, the greatest value of SBIR is its ability to seed those passions and facilitate entrepreneurial risk-taking, which leads to transformative innovations and technologies, and the creation of myriad jobs along the way. The statistics bear this out. If political leaders are serious about creating new jobs, it is entrepreneurs and innovators who should be getting their attentions.

House Small Business Committee's CLOSED Mic

The majority site for the House Small Business Committee is called "Open Mic". A better name perhaps would be "Censored Mic: tell us only what we want to hear."

On September 23 I posted a couple comments. My comment on the main page, regarding SBIR reauthorization has never been posted. When I called, a staffer explained that they get many postings, and not all are open for the public to view. Huh? I thought it was called "open mic". I guess you have a different understanding of that term. Surely, they have a right and responsibility to keep discussions on topic. But to censor views that don't support their portrayal of things is a bit beyond the pale.

The other comment I posted on the "feedback" page regarding the high cost and uneven burden of health insurance for small companies, garnered the following response:

Delivery has failed to these recipients or distribution lists:
SmallBusinessPress@mail.house.gov
The recipient's mailbox is full and can't accept messages now. Microsoft Exchange will not try to redeliver this message for you. Please try resending this message later, or contact the recipient directly.

Not quite what I was hoping for. So, I resubmitted the comment on their main page. Still no posting. A week later, I resubmitted a somewhat extended and specific version of my SBIR reauthorization comments on their resources page summary of H.R. 1425, which presents an incomplete and misleading depiction of the actual bill. For your edification, despite the actions of the House Small Business Committee, I append that September 29 comment and my suggestion for dealing with small business health insurance below. You can judge for yourselves whether they warrant censorship.

SBIR Reathorization

We need long-term or permanent reauthorization of SBIR. The Senate had called for 14 years, then compromised for 8. No shorter! The three year reauthorization in HR 1425 (section 101) is woefully short. It takes more than three years for a single review and award cycle for Phase I and Phase II. Small businesses and agencies need the certainty of a long term reauthorization in order to develop crucial innovations.

We need SBIR to be retained as it was intended: to spur innovation and business creation. That means, there should be no softening of the small business definition criteria and no accommodation for businesses majority owned and controlled by any entity other than individuals or another small business(sections 106/107). No large venture capital-owned businesses (no hedge funds/no private equity); no large corporation subsidiaries. This is needed to ensure cost-effective use of taxpayer dollars to support innovations, business and job creation, while cutting out the middlemen. "Financial structure" matters!

SBIR should be expanded to reflect the value of small innovative businesses, which employ 40% of American tech workers. We currently receive a mere 4% of federal contracts and grants. The percent allocations for SBIR should be increased from 2.5%. A reasonably conservative figure would be 5% of agencies' budgets for SBIR. As a minimum the Senate (S. 493) compromise of increasing SBIR from 2.5% to 3.5% over ten years should be adapted.

There should be absolutely no loopholes created for bypassing Phase I (section 105). Period. Small dollar (~$100-150k) Phase I awards are necessary to ensure that the program continues to seed the earliest stage, high value/high risk/high reward ideas, without overextending the federal government's commitments. Phase I allows risk to be mitigated, while providing capital for early stage ideas that have nowhere else to get funding!

Thousands of businesses, tens of thousands of patents, hundreds of thousands of jobs depend on the House Small Business Committee doing what's right for SBIR and the nation. We depend on you not to cave into to special interests. SBIR needs to be maintained as a merit-based driver of innovation, problem solving, and job and business creation and growth. It has succeeded in this for over a quarter century. No more compromises.

Small Business Health Insurance

Here is a simple idea to benefit small businesses and their employees, and to simplify the burden on insurance company actuaries. Here is a new regulation that would simplify things, while providing for a more fair distribution of health care costs among the population.

Require that health insurance providers establish rates by geographic region and other broad demographic measures, rather than by the size of the employee pool at a particular company. It is absurd that the premiums charged per employee are two or three times the rates that would be charged for the exact same employee if they walked across the street to work for a company with 800. If rates were determined fairly, without regard to the size of the company pool, my rates would drop substantially, allowing me to continue providing coverage, while rates per employees at large corporations would barely nudge upward. It would be a fair distribution of rates, reflecting the actual risk factors per individual, and would even the playing field, so small businesses could compete on an equal footing with large companies for the same quality employees, without having to gouge their own bottom lines.

Patents: good for innovation or stifling?

The August 20 issue of The Economist includes an article entitled "Intellectual Property: Patent Medicine" which discusses many of the problems with the American patent system, most of which were not addressed or redressed by the latest "patent reform" legislation. Here's the alarming statistic:

In recent years, however, the patent system has been stifling innovation rather than encouraging it. A study in 2008 found that American public companies’ total profits from patents (excluding pharmaceuticals) in 1999 were about $4 billion—but that the associated litigation costs were $14 billion.

At times it seems for a small innovative business that the effort and costs involved with preparing and filing patents may not be supported by the benefits that accrue. Retaining ideas as trade secrets, or protected in other ways like via SBIR data rights, may be a better means to protecting a company's intellectual property.

Corporate Welfare America

David Kocieniewski published an article in today's New York Times entitled "Where Pay for Chiefs Outstrips U.S. Taxes," reporting on a study that found many of the highest paid chief executives lead corporations with the lowest tax burden, despite bumper profits. Now, the issue here is not principally the widening income gap between rich and middle class. Putting aside whether a corporate CEO or any employee of a firm is worth $18m/year (which by the way translates to $8,653.85 per hour for a standard year of 2080... hell, let's give them the benefit of the doubt, they work hard, let's say 80 hours per week... well then, it's only $4,326.92/hour!), the notable finding is that current United States policy is "rewarding tax avoidance rather than innovation."

“We have no evidence that C.E.O.’s are fashioning, with their executive leadership, more effective and efficient enterprises,” the study concluded. “On the other hand, ample evidence suggests that C.E.O.’s and their corporations are expending considerably more energy on avoiding taxes than perhaps ever before — at a time when the federal government desperately needs more revenue to maintain basic services for the American people.”

That's something for the policy wonks in Washington to consider as they move ahead with tax reform and deficit reduction plans.

How Not to Create Jobs

If the brinksmanship of the past few months is any indication, the last thing on politicians’ minds is actually clearing the decks for innovative entrepreneurs to create new businesses, jobs and commerce. With more than 112,000 small employers in Wisconsin accounting for more than 52% of private sector jobs and a whopping 97.9% of all state employers, you’d think our voice would be louder and clearer.

Yet efforts to support small business creation and job growth are too often silenced in the din of politics. The remarkable fact is that most state and federal plans intended to create jobs are woefully misdirected—biased toward producing profits for middlemen and investors rather than efficiently creating new businesses and jobs. Let me explain: if a contract goes to a start-up or small company, the entire amount can be spent to create jobs and innovations; If the funds rather go to supplement investment in companies, investors reasonably enough expect to skim off a profit, leaving a reduced portion of funds to support jobs and innovations.

In March of this year, U.S. Senator Mary Landrieu introduced a bill (S.493), years in the making and culminating from a herculean effort to address the concerns of multiple constituencies. The bill enjoyed bipartisan support with eight co-sponsors: three Republicans and five Democrats. It was blessed by small business organizations, federal agencies, and investor outfits as an acceptable compromise. S.493 had one simple objective: to extend the SBIR and STTR programs which direct a small percentage of federal R&D spending toward small businesses and partnerships with universities.

The costs are negligible: the nonpartisan Congressional Budget Office estimates administering the program at a mere $30m/year, to award more than $2B in contracts and grants to America’s small businesses. In effect it is budget neutral: They are not separate line items, only a percentage of whatever funds are budgeted to federal agencies.

The program has been around since 1982, has founded or expanded some 28,000 businesses, many of which became major employers like Qualcomm with 17,500 employees. America’s small businesses account for nearly 40% of patents issued, but receive a mere 4% of the federal R&D funding. For every $400k of taxpayer money, small businesses produce one patent. Universities in contrast require nearly $15m of federal subsidies for every patent issued. In terms of efficient use of funds, small businesses produce results!

Unfortunately, before a full vote in the Senate, at least 150 mostly unrelated amendments were proposed to S.493. In May Senate Majority Leader Harry Reid tabled it. The leadership of the House Small Business Committee is supporting instead H.R. 1425, a bill that would radically change SBIR/STTR for the worse. The House version as it stands would in effect destroy these programs, shifting the focus from seeding innovative job-creating research into a scheme to subsidize Wall Street hedge funds, private equity, and venture capital, concentrating our bets in a few mostly mature companies that have already been identified by investors as potential cash cows. Here are a few of the changes that are proposed:

• Current law requires a short-term, low-budget Phase I for all awardees to prove the feasibility of an innovation before a large outlay of taxpayer funds; H.R. 1425 does away with this requirement, allowing untested ideas to receive $1m or more right from the start, reducing the number of new ideas that get tested.
  
  
• Currently, SBIR/STTR contracts and grants are reserved for American small businesses, owned and controlled by individuals, permitting 100% of the funds to go directly to the company for jobs, benefits, and research; H.R. 1425 does away with the small business requirements, transforming the programs into subsidies for hedge funds, private equity, and venture capital.
  
  
• Companies with fewer than 500 employees employ about 40% of the nation’s scientists and engineers, but receive only 4% of federal funding; H.R. 1425 would further distort this situation, removing the opportunity for great ideas to be taken to market.

Why on earth would we dilute a program that has created hundreds of thousands of Main Street jobs to subsidize the profits of Wall Street money managers? Why would we radically alter a cost-effective, proven job creator? A vote on H.R. 1425 is expected September 12. The House leadership must support a better bill. At the very least, they should accept the compromises already achieved in S.493. A better bill means a stronger economy for us all.

Perhaps there's a better way?

I read the following in the NASVF NetNews dated 3/18/2011:

Angel Investor Tax Credit Produced 47 Jobs in 2010

The angel investor tax credit spurred $28 million in funding for 67 Minnesota companies in 2010—and those 67 companies collectively created 47 jobs last year, according to a report that the Minnesota Department of Employment and Economic Development (DEED) recently submitted to the Minnesota Legislature.

Angel investors collected just over $7 million in credits from the state in 2010. Because $11 million in angel investor credits was available in 2010, almost $4 million in remaining funding will roll over into 2011—bringing the total available to nearly $16 million this year.

Jeff Nelson, the angel tax credit’s program coordinator, anticipates that all of the funding available this year will be used up by the end of 2011 as the program picks up steam, adding that he was pleased with the 2010 results. The tax credit program was signed into law on April 1, 2010 but didn’t kick off until July.

Quick math: $7m / 47 new jobs translates to an astounding $148,936 in lost state revenues per job created!

Now, I am not about to argue that the state should not support small business growth and job creation. But somehow I find it hard to believe that this is the most efficient means to support small businesses and job creation? In today's climate of tight budgets, we should be seeking cost effective means to stimulating innovation, new businesses, and sustainable job growth. I find it difficult to fathom that nearly $150k in tax credits to investors per job created can be justified! There must be a better and cheaper way to offer incentives directly to entrepreneurs, or tie tax credits directly to jobs created and the value of those positions on the local, regional, and national economy.

Put it in another perspective, my firm is about to engage in a new joint development project with a local UW campus supported via the modest Wisconsin Small Company Advancement Program (WisCAP). It will create one full-time position on campus immediately, and likely 2-3 more at my firm within the next year. The cost to the state is a mere $65k per full-time job. That is more than twice as cost effective than the Minnesota program so highly praised in this article.

Hirono sponsors new SBIR/STTR bills

Quietly, Rep. Mazie Hirono (D-HI) introduced three bills in the House of Representatives, designated H.R. 447, 448, & 449, known as the SBIR Enhancement Act, the Small Business Innovation Enhancement Act, and the STTR Enhancement Act. Significantly, these bills would increase the SBIR percent allocation from 2.5% to 5% of agency's extramural R&D funding, and increase the STTR allocation from .3% to .6%; they would raise Phase I award levels to $200k, and Phase II to $1.5m (Recent SBA guidance suggested $150k & 1.5m); included as well is a stipulation that award levels be adjusted every five years.

Rep. Hirono sponsored all three bills independently, without co-sponsors on January 26, 2011. All three were referred the House Small Business Committee and the House Committee on Science, Space and Technology. Hirono serves on neither. There is no news on discussion or consideration by these committees, but on February 10, the bills were referred to Science & Technology's Subcommittee on Technology and Innovation.

There is nothing in these bills however that addresses reauthorization of the Small Business Act itself, so presumedly any debate or discussion on the duration of reauthorization would be handled separately, or would be amended to these bills.

Washington: Let's get on with SBIR reauthorization, to support small business innovation, job creation, and economic growth!

The House fails us again!

Well, folks, SBIR is still on life support. Despite the valiant efforts of the leadership of the Senate Committee on Small Businesses and Entrepreneurship (in Sens. Snowe & Landrieu), and the unanimous consent of the U.S. Senate in passing S.4053 yesterday, the House failed once again miserably to do something good for the country.

Despite apparent willingness by outgoing Speaker Nancy Pelosi and Steny Hoyer, the intervention of the House Shafting Businesses Committee, namely in the personages of outgoing Chair Nydia Velazquez (D-NY), and incoming Chair Sam Graves (R-MO), who both opposed "unanimous consent" as a mechanism for voting on the bill, the bill was never considered. It does look distinctly like, despite the musical chairs of the committee leadership, the House SBC will continue to shaft small businesses at will. Will incoming Speaker John Boehner have the courage to do what's right?

Remarkably, an unprecedented alignment of forces supported S.4053. It was endorsed not only by small business organizations, but also by both the National Venture Capital Association and the Biotechnology Industry Organization who have been heretofore the major opponents of any compromise short of redefining small business to the point of meaninglessness.

Yet, there are indications that misguided or insidious elements in the academic community (including the White House Office of Science and Technology Policy) are working to defeat any continuation or expansion of R&D involvement by the small business community. I can't say it better than Rick Shindell, so I'll let his words make the case:

Some university organizations are claiming that these greedy SBIR small businesses are trying to steal R&D funds away from them by raising the SBIR allocation from 2.5% to 3.5%. In an emergency letter (Dec 22, 2010) to the House leadership, The Federation of American Societies for Experimental Biology cried out "This bill would increase the SBIR set-aside by 40 percent…"

What these groups won't tell you is that well over 1/3 (closer to 38%) of all the scientists and engineers in the US work for, or own small high tech businesses but these businesses get only about 4.3% of the government's research dollars, and that's inclusive of the 2.5% SBIR allocation!

In actuality, universities and SBIR small businesses are helping each other more than ever before. Each entity has its strengths and they can leverage each other's assets to improve chances for success.

This is not about greed; this is not a scramble for diminishing crumbs. This is about propelling the US and the world forward, out of this mess of a recession, toward a better and brighter future. This is not a zero-sum game. The more innovation, the better our lives, all of our lives, will be.

What is the best way that we as a society can support innovation? SBIR is right there at the top. And as a boon, it creates jobs and excitement along the way. Seed funding for innovative startups; and for the startup of innovative ideas, transforming those ideas into commercial products, from start to finish. That's what SBIR is all about.

Let's get this taken care of in the new Congress, without prevarication and without delays. Is there leadership enough to get this renewed for 8 years before the current Continuing Resolution expires on January 31? Let us hope!

S. 4053: Will SBIR finally be reauthorized?

Word is that Senator Tom Coburn (R-OK) this morning released his hold on legislation, allowing the Senate to vote on and pass S. 4053, which includes a compromise reauthorization of SBIR.

• Passage of this compromise legislation is supported and urged by many innovative, job creating small businesses across the country.
• Please urge the current Speaker of the House Nancy Pelosi to take up and vote on S. 4053 in the House of Representatives.
• Please urge your Representative in Congress to vote FOR this legislation.

Another Continuing Resolution

Nydia Velazquez' continuing war against the interests of small businesses notwithstanding, we've got yet another reprieve for SBIR and other SBA programs (number nine in a long series of continuing irresolutions, for those keeping count). Why is she still chairwoman of the House Small Business Committee?

via thomas.loc.gov

S.3839
Title: A bill to provide for an additional temporary extension of programs under the Small Business Act and the Small Business Investment Act of 1958, and for other purposes.

Sponsor: Sen Landrieu, Mary L. [LA] (introduced 9/24/2010) Cosponsors (1)
Related Bills: H.R.3614, H.R.4508, H.R.5849, S.1513, S.1929, S.3253
Latest Major Action: 9/28/2010 Cleared for White House.
--------------------------------------------------------------------------------
MAJOR ACTIONS:
9/24/2010 Introduced in Senate
9/24/2010 Passed/agreed to in Senate: Introduced in the Senate, read twice, considered, read the third time, and passed without amendment by Unanimous Consent.
9/28/2010 Passed/agreed to in House: On motion to suspend the rules and pass the bill Agreed to by voice vote.
9/28/2010 Cleared for White House.

Thanks to Rick Shindell and all the SBIR advocates out there who overflowed Speaker Pelosi's voice mail, and contacted their own Representatives. Now let's get some real resolution in the form of reauthorization.

Repeal the New 1099 Requirements Now!

Embedded with the recent healthcare legislation was a misdirected effort to raise $17B in revenues over ten years by burdening small businesses with an onerous reporting requirement that according to the National Small Busines Association (NSBA) would increase the average number of required 1099s a small firm would need to file from 10 to 86! The new rules, set to go into effect for 2012 purchases, would require a 1099 report for "any purchase from a vendor of goods or services worth $600 or more during the calendar year".

The Senate recently failed to repeal this requirement. Several new efforts in both the House and Senate are directed at redressing this matter. Of particular note:

Rep. Dan Lungren (R-CA) is sponsoring the Small Business Paperwork Mandate Elimination Act (H.R. 5141), that would fully repeal the reporting requirement, but does not offset the lost revenue.

Sen. Mary Landrieu (D-LA), Chair of the Senate Committee on Small Business and Entrepreneurship, is sponsoring the Information Reporting Modernization Act of 2010 (S. 3783), which would raise the threshold for businesses to file information reports to $5,000 from its current level of $600 and would index the threshold to inflation after 2012. Unlike a similar recently failed amendment to the small business bill (S. Amdt. 4595 to H.R. 5297), offered by Sen. Bill Nelson (D-FL), Landrieu's proposal would not exempt businesses with fewer than 25 employees and does not include an offset to pay for the change.

Perhaps it's too much to ask, but it'd sure be nice if we could put aside campaign posturing for just a moment and focus on actually taking care of the business of governing! The proposals are out there. How many other politicians will step up to the plate and just swing?

Taxes & Small Businesses

Arguing that the sunset of the previous administration's tax cuts for those earning more than $250k net will hurt small businesses & job creation seems a bit of a stretch. Here's a post on the subject on Growthology. Be sure to read the comments, in particular note the following remark: "Wouldn't the fact that pass through profits are taxed at a high rate encourage reinvestment? If we want businesses to hire then pulling money OUT of the business should be discouraged."

And here is a letter to the editor of the Wall Street Journal from this morning:

Your Sept. 3 op-ed "The Small Business Tax Hike and the 97% Fallacy" by Kevin A. Hassett and Alan D. Viard makes a misleading argument about small businesses in order to justify borrowing $700 billion to finance the extension of the Bush tax cuts for the wealthiest 2% of Americans.

Messrs. Hassett and Viard concede that 97% of small businesses will pay nothing more in taxes under the president's plan to allow the Bush high-income tax cuts to expire on schedule. Yet they argue that even if only 3% of small-business owners would be affected, this small fraction reports a large amount of what they term "small business" income.

The problem with their argument, however, is that it counts any type of partnership income, sole proprietor income, or S corporation income as small-business income. Thus, they count as small-business income profits that go to a partner at a major law firm or hedge fund. Our analysis indicates that small-business owners under this definition, who would be affected by allowing the top two rates to increase as scheduled, have an average gross income of over $1 million. Keeping the Bush tax cuts in place for these taxpayers would not likely result in additional job creation, and it would add significantly to federal budget deficits and debt.

The experience of tax policy over recent decades clearly demonstrates, and the Congressional Budget Office has confirmed, that tax cuts for the highest-income Americans—regardless of whether their earnings are classified as ordinary or small-business income—are not an efficient way to stimulate the economy or create jobs.

Michael F. Mundaca
Assistant Secretary of Treasury for Tax Policy
Treasury Department
Washington

Re-election Posturing Sticks it to Small Businesses

I have difficulty understanding how some politicians consider political maneuvering that damages small businesses, which has a deleterious effect on job creation and economic growth is somehow in the best interest of getting themselves re-elected. [SIGH]

via NSBA news:
Small Business Jobs Bill Stalemate in the Senate
1099 Reporting Repeal Defeated by House Politics

Proposed Tax Credit for Investors in SBIR firms

Proposed Tax Credit for Investors via The Pursuit.

Now all we need is some tax incentives for the entrepreneurs and small businesses themselves, to reward bootstraps as much as those who take outside investment:

• Allow the self-employed to fully deduct the cost of health insurance premiums, just like the rest of the employed population.
• Provide all employers (regardless of size) with tax breaks for creating net new jobs. Let's create a level playing field that actually rewards job creation.

Support the Small Business Jobs Act

Scott Hauge's Small Business California blog posts the press release for Sen. Mary Landrieu and Sen. Max Baucus' recently released Small Business Jobs Act. I encourage you give voice to your comments and support by contacting Caroline Bruckner in Sen. Landrieu's office.

When are we going to contain health care costs?

Like most small business owners, I'd like to take care of my employees as best as I am able. In part, that means providing reasonable health care coverage. Unfortunately, reasonable is not often used in conjunction with health care and small business. Like in so many other areas, small businesses are squeezed by unreasonable forces. Why is it that the cost of insurance for an employee at a firm with a handful of employees is 2-3 times what that same employee's cost would be at a firm with 5000 employees?

It's the same individual, with the same risk factors, and the same dispositions and predelictions. No more no less than if they were employed at a larger firm. But for some reason, health insurance companies are allowed to charge substantial more of small businesses than is reasonable. It would be like offering a discount card at the coffee shop only to employees of companies of a certain size, and charging a premium to anyone from a smaller firm.

Many of you can't even begin to imagine how expensive it is for a small company like mine (six, soon-to-be-seven, employees) to provide coverage for our workers, which I would relinquish only under severe duress, because I'd like to treat them at least as well as I would like to be treated.

To give you a sense of it: current total premiums for my employees account for 26.6% over payroll. The company covers most of employee's premiums and a lesser portion of their dependents'. In real terms, that means on average for every $100 an employee earns, the insurance company receives $26.60, of which the company pays $15.35. Put another way, health insurance costs the company about twice as much as payroll taxes. Yes, I believe everyone deserves coverage. But unless we contain costs, this is as unsustainable as the housing bubble was.

When will the bickerers in Washington get it?: we don't care what party you're from, whether you're an incumbent or an outsider, what labels you assign to others or they assign to you. We care about you getting the job done. CONTAIN HEALTH CARE COSTS so we can get on with doing what small businesses do best: innovating and creating jobs!

TARP neglects small businesses. Are you surprised?

via Thomson Reuters News:

U.S. Small Firms Not Benefiting from TARP: report

WASHINGTON (Reuters) - The U.S. government's program to bail out the banking industry is not doing much to help small businesses play a part in the economic recovery, an overseer of the government's bailout program said on Thursday.

Harry Reid: Remiss of Duty

Senate Majority Leader Harry Reid circumvents the efforts of the leaders of the Finance Committee to strip the current Jobs bill of Small Business provisions. Just who does the leadership in Washington think will create jobs in this country?

Contact your Senator to do something about it!

Can Karen Mills pull it off?

SBA Administrator Karen Mills talks with NPR's Renee Montagne. It's good to hear all the recognition of the value and contribution of small businesses in creating jobs. Let's get on with it!

Listen here:

Direct Lending to Businesses

The New York Times reports on a small business owner's question posed recently to President Obama during a town hall meeting in Tampa, Florida. Steve Gordon's proposal was that if the government is to be involved in supporting loans to small businesses, why not lend directly to those small businesses? Obama's response was to explain that the SBA doesn't have the infrastructure in place to process and oversee direct loans; that local banks are better able to handle such loans more efficiently. The frustration of course is that even these local banks are still lending too little, too late.

Interestingly, this comes on the heels of the President's renewed pledge to do away with subsidies to support private lending to students, in favor of an expanded Direct Student Loan program. One difference perhaps is that the Direct Loan program already has in place the infrastructure to handle these loans. Regardless, there are still those who resist such a move toward reducing wasteful and inefficient government subsidies.

Is there any reason that the SBA and the Direct Student Loan programs couldn't team up to handle small business lending as well? With all the talk of increasing partnerships between universities and entrepreneurs, wouldn't such a pairing be an appropriate first step?

It is a valid question and worthwhile discussion to be had: what is the most efficient means for utilizing existing government revenues for the purpose of supporting and sustaining the development and growth of job-creating businesses?