Curbing the SBA, Taking on China, and Other Small-Business Policies GOP Candidates Are Eyeing

Four GOP candidates for president laid out some of their small-business objectives. Not everything discussed is exactly small-business friendly.

BY MELISSA ANGELL, POLICY CORRESPONDENT @MELISSAJOURNO

The first GOP presidential debate is Wednesday, August 23rd. Entrepreneurs got a preview of where some of the candidates stand on small businesses. 

Four Republican presidential candidates--Perry Johnson, Francis Suarez, Larry Elder, and Asa Hutchinson--discussed entrepreneurship and their platforms during a forum in late July hosted by Right to Start, a nonpartisan nonprofit focusing on entrepreneurship. The Cedar Rapids, Iowa, event was moderated by Right to Start CEO Victor Hwang and Inc. editor-at-large Christine Haughney Dare-Bryan.

While some candidates advocated for expanding entrepreneurial programs within the government, not every proposal floated may be helpful to small businesses. Here are just four of the bigger issues they discussed. 

Keeping the SBA?

The Small Business Administration's days could be limited, depending on who is elected president. Or, at the very least, the agency, which is tasked with overseeing the health of America's small businesses, could see its purview change dramatically.

"The SBA needs to fulfill their core functions, but I think there are ways that you can tighten up their mission," said Hutchinson, the former governor of Arkansas who also co-founded the Little Rock-based consulting firm Hutchinson Group. 

Hutchinson is even entertaining a hiring freeze at the SBA, as he says he'd assess the agency and how to cut costs. But he did admit that everyone may be critical at the SBA, which would prompt him to look at other agencies, like the Department of Education, as he'd work to make the government more efficient. 

Larry Elder, a television show host, was more critical of the SBA. He cited skepticism over the agency's ability to nurture small and midsized businesses and expressed concern that the agency's loan guarantee programs open taxpayers up to losses if businesses default. Elder is also a co-founder of Old Glory Bank, a community bank based in Elmore City, Oklahoma.

Miami's Mayor Suarez echoed that the government tends to be bloated, but didn't directly say that he'd get rid of the SBA. Instead, he said that it's important for an administration to look at the ROI when examining federal spending. 

"I think that's the issue," Suarez said. "If the ROI is good, obviously, they should be kept."

Competing With China

Tensions with China have intensified over the past year as the U.S. looks to become more self-sufficient in the wake of the pandemic-induced supply chain turmoil.

Hutchinson said he would work to move supply lines away from China, including anything from pharmaceuticals to military component parts and anything else needed for sensitive industries. He praised incentives like the $52.7 billion Chips Act, which seeks to lure manufacturing back to the U.S., but said that incentives should also be limited by the government. 

The former Arkansas governor adds that it comes back to education.

"If we're going to compete with China, but also compete with India and our competitors across the globe, we need to have computer science education in the United States that creates that culture of entrepreneurship," Hutchinson explains. "There's no one better for entrepreneurship than somebody who's developing software for the future, or a new technology." 

Balancing the Budget

If there's one issue upon which most of the candidates could agree, it's that government spending is excessive, and much needs to be done to balance the budget and taper high interest rates. 

"They get a budget every year, and at the end of every year they go out of their way to make sure that every penny is spent," says Johnson, a serial entrepreneur. "Now I say we do just the opposite [and] start running it the way we run a business. We freeze that budget and they have to cut two cents out of every dollar of discretionary spending."

For Suarez, balancing the budget is one of the first things that he'd do if elected. 

It's easier said than done, of course. The U.S. last saw a budget surplus during fiscal year 2011, albeit the country still saw its national debt tick up, according to the Congressional Budget Office.

Other candidates also took the time to lay out their vision for balancing the federal budget.  

The way Elder sees it, "The U.S. budget is on automatic pilot." 

So he wants to add an amendment to the Constitution to fix the country's spending relative to a set percentage of gross domestic product, though he did say he'd leave exceptions for war or financial disasters. 

Leveling the Playing Field 

To prioritize small businesses, Hutchinson advises having a pro-growth tax policy, such as tax perks like accelerated depreciation. Suarez's plan would focus on spurring innovation and nurturing an economy of the future. He would, he says, help cultivate conditions for entrepreneurs to thrive in, though didn't elaborate any further.

Johnson wants the U.S. to stop catering to larger businesses and argues that the government should extend more money to entrepreneurs so founders have an opportunity to succeed. After all, access to capital remains one of the biggest hurdles for founders.

But those remarks seem to directly conflict with Elder's plan. While Elder believes that the country is overtaxed and overregulated, he thinks the government needs to take a step back.

"I don't believe that it's the government's job to level the playing field by picking winners and losers, or by imposing regulations on this business or that business or this business," he said. "I think that makes things worse."

It's questionable, though, if Elder would look to be a pioneer for women entrepreneurs given his own track record. He once said that, compared to men, women are not as knowledgeable about politics and current affairs. He also faces accusations from his ex-fiance that he physically and emotionally abused her.

When asked what Elder would do to help bolster opportunities for women, who historically face challenges in accessing funding compared with men, Elder said that he didn't know if he agreed with that.