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Ryan blames Obama for small-business woes -- but who is to blame?

August 17, 2012|By Alana Semuels
(Mark Wilson/Getty Images )

GLEN ALLEN, Va. — Small businesses may not be thriving in this economy, but just why is up for debate. Republicans blame President Obama, while some say small-business owners are hesitant to hire or do much of anything else until they see who wins the White House in November.

Rep. Paul D. Ryan focused the blame on the Obama administration Friday as he visited a Virginia town that is home to two fellow Republicans, Rep. Eric Cantor and Virginia Gov. Bob McDonnell.

“We should not have a government that stands in the way, that erects barriers to small business,” Ryan said at a rally at Deep Run High School, just outside of Richmond. “We should have policies that help small businesses grow and create jobs.”

“What is the president doing?” Ryan said to a full auditorium. “More regulations, more uncertainty, more borrowing, more spending, more taxing ... and more teleprompters.” (He added that last line after being prompted by a man in the crowd.)

It’s true that small-business optimism has dipped in recent months as uncertainty about the Supreme Court’s healthcare ruling and the outcome of the November elections motivated businesses to put off hiring and spending. An index that measures small-business confidence dipped for the second month in July, according to the National Federation of Independent Businesses.

Small businesses employ about half of all workers, so sluggishness overall in hiring could be partly attributed to this lack of confidence.

But it is uncertainty about the election — rather than any specific policies about small businesses — that will likely keep growth slow leading up to the election, said Gregory Daco, U.S. economist with I.H.S. Global Insight.

“I don’t know that the actual burden of policy or different regulations are that much of a concern for businesses,” Daco said.

“The uncertainty is still a major factor in terms of the uncertainty for fiscal policy — who will win the elections, how policy will shift,” he said.

Whether Mitt Romney or Obama wins, he said, that uncertainty will likely disperse after Nov. 6.

“Its not necessarily the outcome that counts, it’s the uncertainty part of the outcome,” Daco said.

In Ryan’s speech Friday, the Wisconsin congressman and Romney running mate also hit the president on tax increases for businesses, and got more mileage out of a previous Obama remark that included the words “You didn’t build that,” when referring to businesses.

Romney “is living proof that If you have a small business, you built that small businesses,” Ryan said.

But Ryan might find it challenging to criticize the president on high taxes and small-business regulations. He voted against the Small Business Jobs Act, passed and signed into law in 2010. It implemented tax deductions for small businesses and established higher loan limits and a lending fund for small businesses. It was a vote mostly along party lines, but the National Federation of Independent Businesses, a trade group, complimented the bill.

“The Small Business Jobs Act will help some small businesses during these difficult economic times,” said Susan Eckerly, senior vice president of the National Federation of Independent Business, in a statement. “The tax provisions will make it easier for entrepreneurs to start a new business and invest in their business property.”

Still, Roy Robbins, a small-business owner who attended the Ryan rally, said he didn’t notice any difference in lending practices after the jobs act. Robbins is an independent contractor who travels around the country building power plants. Five years ago, he had two employees but had to lay them off during the economic downturn.

“The biggest thing is uncertainty,” said Robbins, whose business is going well but isn’t going to be hiring until after the election. “A lot of small businesses are holding out to the election.”

Robbins, who lives in Glen Allen, was wearing a dark blue shirt that read “Government didn’t build my business, I did.” He said that the poor economy was also a factor in his lack of hiring.

But the economy is stronger in Virginia than it is in most states. Unemployment is just 5.7% in the state now, and only reached a high of 7.3% in January 2010. The U.S. economy also showed signs of life in July, adding 163,000 jobs, more than double the average of the previous three months.

Ryan was campaigning in Henrico County, a suburb of Richmond that went for Obama in 2008, 56% to 44%. Obama won the state, becoming the first Democrat to carry it since 1964. But there is also strong Republican support in the county — the gym was so full that the fire marshal cut off admission, gathering overflow voters in a separate auditorium in the school. Ryan addressed them briefly after his speech.

“It's great to see everybody, and again, when the gym gets full, the fire marshal says no, so we're here in the auditorium. Thank you so much for coming out,” Ryan told the attendees.

Now, polls show Romney and Obama neck-and-neck in Virginia.

alana.semuels@latimes.com

@alanasemuels

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