Three ways small businesses can drive our economic recovery

A lot can change in 40 years. In 1981, America was making the transition from rotary phones to the newer, high-tech "push-button" phone. The Oldsmobile Cutlass was the best-selling car that year. And NASA sent the first reusable spacecraft into orbit from the Kennedy Space Center in Florida with a crew of veteran astronauts. 2022 is a different story. The vast majority of our nation’s population has a smartphone – most of which function as little computers and can be used in place of your credit cards. Americans are being launched into space for a few minutes just for fun. And there are cars on our roads that can drive themselves. But despite how far we’ve come, there is one thing the 1981 version of America has in common with the one we live in now: record high inflation levels. 

American small businesses play an outsized role in our economy, employing just under half of all workers across the country, and creating roughly two-thirds of the net new jobs since 1995. But over the past two years we have seen Democrats at every level of government enact draconian economic closures throughout the pandemic, tragically resulting in one-out-of-three small businesses across the country shutting their doors for good. The loss of these small businesses will have profound, long-term effects on employment, local tax revenues, and lost opportunities to create innovative new goods and services, with ramifications that Democrats in Congress and the White House haven’t even begun to understand. 

For the small businesses that were able to survive the pandemic, the future of the "Biden Economy" looks similarly bleak. According to recent data from the Job Creators Network, the number one concern for these entrepreneurs are higher prices, with 72 percent of them believing that the Biden Administration has failed to combat inflation. While some blame President Biden’s abdication of responsibility and inaction, it is critical to understand that his reckless spending in the form of the American Rescue Plan is responsible for catapulting the U.S. inflation rate ahead of other developed nations. 

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It is extraordinarily frustrating to watch this administration’s failure to acknowledge the problem these "spend first, ask questions later" policies have created. The second quarter GDP numbers show our nation’s economy has shrunk for the second quarter in a row – quite literally the definition of a recession – but this administration continues to live in denial. President Biden and Treasury Secretary Yellen have both refuted the possibility of a recession despite the numbers showing that’s where we’re unfortunately headed. 

Democrats in the White House have told us that inflation was a high class problem, and not to believe what our pocketbooks were so plainly telling us about the issues within the economy. But inflation just reached at a 40-year high and gas prices have been setting records for the last year. Americans are having to pay an average of $10,000 more on used cars and 33 percent more for a carton of eggs. President Biden told us a year ago that inflation was just "temporary," but at 9.1 percent, it’s projected to cost the average American household an extra $6,000 this year. That’s unacceptable, and this administration standing by hoping these rates will go down on their own is not a strategy. 

House Republicans have an actual plan. As the top Republican on the House Small Business Committee and member of the House GOP Jobs & Economy Task Force, I will ensure that the small business recovery is a cornerstone for the recovery of the broader economy.  

First, we must protect small businesses from tax increases that kill jobs and drive-up prices. To do this, Congress should double down on the vital small business provisions included in the Tax Cuts and Jobs Act, which led to the strongest economy in our nation’s history prior to the onset of COVID-19. 

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Second, not only does Congress need to cut red tape and reduce burdensome regulations, but it should be done in a way that makes it easier for smaller businesses to navigate. The smaller a company is, the more difficult and expensive it is to comply with the complex web of local, state, and federal rules. By tailoring regulations to be less burdensome for smaller companies, we can keep them competitive. To do this properly, Congress will need to elevate the voices of small business owners and operators when federal agencies go through a rulemaking process, so D.C. bureaucrats can no longer crush someone’s life’s work with the stroke of a pen. 

Finally, policymakers need to incentivize the development of a larger skilled workforce. Recent data shows that 97 percent of small businesses face labor shortages as they try to fill open jobs. To address this, Congress needs to support career and technical education, target federal funds to close the skills gap between employers and the workforce, and support the gig economy so freelance workers have greater flexibility and independence. 

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This formula to help small businesses recover isn’t complex – but it is effective. At the end of the day, it’s just about making it a little bit easier for companies on Main Street to make payroll, pay for materials, and keep their doors open for business. Republicans on the Jobs & Economy Task Force are ready to take the commonsense steps to address these issues and create a real economic recovery for small businesses in America. Small businesses are drivers of our economy. If we give them the tools to thrive, they have the power to right the ship for the American economy as a whole. 

Republican Blaine Luetkemeyer represents Missouri’s 3rd District in the U.S. House of Representatives. He is the Ranking Member of the House Small Business Committee and also serves on the House Financial Services Committee as Ranking Member of the Subcommittee on Consumer Protection and Financial Institutions.