Greg's Small Business Plan

Dear Kansans,

Washington is broken, and nowhere is that more evident than in the challenging environment Congress has created for small businesses. While politicians squawk over partisan issues, healthcare costs continue to rise, the regulatory environment becomes increasingly complicated, and banks remain reluctant to help entrepreneurs who create jobs.

I have spent my professional life as a businessman and entrepreneur, and I am running for Senate because I want to fix Washington’s broken system so that small businesses have the tools they need to succeed and grow jobs in communities across Kansas.

Forcing Washington to work for small businesses isn’t complicated. In fact, some of these changes are simply sitting on a desk waiting to be implemented. But Washington is so out of touch that politicians spend their time focused on the next election rather than actually making changes to create jobs. That ends now.

As an Independent, I can hold Washington accountable to make these changes, help small businesses, and create jobs in Kansas and around the country. My plan is simple:

  1. Fix the Dodd-Frank bill to increase small business lending
  2. Review every federal regulation every 10 years so that businesses are not held back by obsolete rules.
  3. Reform student lending and bring accountability to higher education spending so that tuition money goes to education not administration
  4. Streamline federal small business programs so people can find and utilize existing resources Force regulators at the state and federal levels to work together so the regulatory environment is less complicated for business owners.

These are issues Congress should have already addressed, but when we don’t answer to either political party, we can force Washington to solve problems.

Sincerely,

Greg Orman

1. Fix Dodd-Frank to Increase Small Business Lending

Dodd-Frank was supposed to prevent “too big to fail” from ever happening again.  Instead, smaller banks and credit unions are merging into larger institutions because of the increasing cost of regulations.[1]  Rather than spreading risk and reducing asset concentration, these regulations have actually increased both. 

Banking regulation should focus on ensuring that those originating loans have skin in the game (by requiring that they keep a share of loans they originate) and maintaining proper capital requirements.  Instead of using these basic guiding principles, Dodd-Frank tried to imagine every potential scenario and come up with a rule for it.  This process has been absurdly slow, and it is ripe for special interest influence.  Four years after its passage there are still nearly 100 rules not yet finalized.[2]

Underwriting restrictions for Regional and Community Banks and Credit Unions need to be relaxed to give bankers the flexibility to serve their communities.   These institutions should be trusted to make decisions that are in the best interests of their customers and shareholders without being second-guessed or subjected to burdensome regulatory hurdles.

2. Review Every Federal Regulation at Least Once a Decade

While Congress can’t seem to get anything done, the Executive Branch still turns out thousands of rules and regulations every year.  Since 1997 there have been at least 56,569 new federal rules and regulations issued.[3]  Complying with federal regulations cost Americans $1.863 trillion last year.[4]

Even worse, these regulations have a disproportionate impact on small businesses.  The Competitive Enterprise Institute found that “Firms with fewer than 20 employees pay an average of $10,585 per employee, compared to $7,755 for those with 500 or more employees.”[5]

While regulation is important, and many are needed, there are clearly those that have outlived their purpose.  That is why I would support a Regulatory Reduction Commission, modeled off of the Base Realignment and Closure (BRAC) Commission.[6]  The groups would look at one tenth of all regulations each year and come up with a list of those that should be eliminated.  This recommendation would then go to Congress for a straight up or down vote.  This idea has been proposed by both the left-leaning Progressive Policy Institute[7] and the conservative Competitive Enterprise Institute.

3. Reform Student Lending and Bring Accountability to Higher Education Spending

To remain competitive in the global marketplace, we need to keep college education affordable for the middle class, but rising college tuition makes that harder to accomplish.

Since 1980 the inflation adjusted cost of college tuition at public universities has tripled and more than doubled at private universities.  We now have one trillion in student loan debt[8], up from $350 billion a decade ago.[9]

This massive debt load students face upon graduation is now preventing many of them from being able to start their own businesses.  That’s why the Kauffman Foundation recently noted that student loan debt was a top inhibitor to entrepreneurship and business creation.[10]

While many have argued that the solution is increasing the dollar amount of loans to students, this has actually been counterproductive.  Many colleges and universities have seen high demand and increased loans as a reason to increase their tuition and spending.  Over the last 25 years, American colleges and universities added more than 517,000 administrators and other non-teaching employees, more than doubling the previous total.[11]  During that same time student enrollment is up only 48%.[12]

As I have previously proposed, I believe that schools that benefit from government aid should be required to limit their cost increases to the inflation rate. Had we done this sooner, we wouldn't have the higher education affordability and student loan crisis that we have today.

Institutions that want to continue to raise their costs unfettered, can do so -- just without our money. Holding colleges and universities accountable for affordability should go hand in hand with the dollars we spend supporting their industry.

4. Force Small Business Regulators to Work Together

Small businesses are subject to a variety of different regulations by both the state and federal government.  These regulators don’t regularly talk to each other, and as a result small business owners have to repeatedly set up multiple visits from a variety of different agencies.  These regulators should respect small business owners’ time.  To accomplish this we should offer incentives for a state to begin a trial program that integrates state and federal regulators so that they can regulate businesses together, similar to the way state regulators work with the FDIC to regulate banks.  If these demonstration projects are successful we should eventually make such coordination mandatory.

Small business owners shouldn’t be subject to multiple government inspections every year where regulators simply look to identify violations, no matter how insignificant, as a way to justify the regulator’s existence.

5. Streamline and Evaluate Existing Small Business Programs

Small business can currently get assistance from:  “the Economic Development Administration, the Employment and Training Administration, the Small Business Administration, the Department of Housing and Urban Development, the Department of Agriculture, and a swath of other federal agencies.”[13]  There is no single website where a business owner can go to review all of the programs available.  Instead, the SBA should work with other agencies to create a one stop shop website for small business owners.

We should also apply the same rigorous standards the private sector uses to these programs.  Many of these programs have little accountability and strive to spend their entire budget at the end of the fiscal year just so that they can be fully funded the next year.  Each program should be forced to issue a standardized annual report to Congress that shows exactly how money was spent and what the taxpayer got for it.  We should end the programs that aren’t working and use the savings to reduce the deficit and invest in programs that are working.


[1] “Four years into Dodd-Frank, local banks say this is the year they’ll feel the most impact,” Washington Post, 2/7/2014

[2] “Dodd-Frank Progress Report,” Davis Polk, 9/2/2014

[3] “Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register,” Congressional Research Service, 5/1/2013

[4] “Ten Thousand Commandments 2014: An Annual Snapshot of the Federal Regulatory State,” Competitive Enterprise Institute, 2014

[5] “Ten Thousand Commandments 2014: An Annual Snapshot of the Federal Regulatory State,” Competitive Enterprise Institute, 2014

[6] “Reining in the Executive Branch Bureaucracy, Part 10: Congress Should Create an Annual Regulatory Reduction Commission,” Competitive Enterprise Institute

[7] “Regulatory Improvement Commission,” PPI, 5/2013

[8] “$1 trillion student loan debt widens US wealth gap,” Thompson, AP, 3/27/2014

[9] “Household Debt and Credit: Student Debt,” Federal Reserve Bank of New Your, 2/13/2013

[10] “Jonathan Ortmans presents testimony on the changing rate of business creation in America,” Kauffman Foundation, 9/10/2014

[11] “New Analysis Shows Problematic Boom In Higher Ed Administrators,” Marcus, Center for Investigative Reporting, 2/6/2014

[12] “Age Distribution of College Students 14 Years Old and Over, by Sex: October 1947 to 2013,” United States Census

[13] “Big Ideas for Small Business: A Common Application for Federal Programs,” Center for American Progress, 11/10/2011

"It's time we put a real plan in place to help small businesses in Kansas succeed!"

-Greg Orman

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