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    "title": "1975/12/11 - Economic Policy Board",
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        "James M. Cannon Files (Ford Administration)",
        "James Cannon's Meetings Files"
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        "Small business"
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    "ocrText": "The original documents are located in Box 54, folder \"1975/12/11 - Economic Policy Board\"\nof the James M. Cannon Files at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 54 of the James M. Cannon Files at the Gerald R. Ford Presidential Library\nECONOMIC POLICY BOARD\nEXECUTIVE COMMITTEE MEETING\nAGENDA\nDecember 11, 1975\n8:30 a.m.\nRoosevelt Room\n1. State of the Union Preparation:\nSmall Business Initiatives\nGorog\n2. Review of Common Situs Picketing Legislation\nDunlop\n3.\nEconomic Assumptions for 1977 Budget\nTroika II\nMEMORANDUM FOR THE ECONOMIC POLICY BOARD\nFROM:\nWilliam F. Gorog\nSUBJECT:\nProgress Report, Small Business Initiatives\nThe working panel on Small Business has met twice and has under\nreview the following proposals:\n(1)\nTo assure that small business is fully and formally represented\nat the White House level and has a greater voice in the\nAdministration's economic policy:\na.\nCreate a new position of Assistant to the President for\nSmall Business Affairs; or\nb.\nCreate a new position of Deputy or Special Assistant to\nthe President for Small Business Affairs; or\nC. Designate an existing member of the White House staff\nas Special Assistant or Deputy Assistant to the\nPresident for Small Business Affairs (\"double-hatting\") or\nd.\nDesignate an existing member of the White House staff as\nchairman of an EPB Interagency Task Group on Small Business\nAffairs. The Task Group would have responsibility for reviewing\nEPB actions and their effect on Small Business; or\ne.\nAppoint the SBA Administrator to the Economic Policy Board\nand/or the Domestic Council\nDiscussion\n9.4 million small businesses provide 55% of private sector, non-\nagricultural employment; 48% of the gross business product;\nand 43% of the total gross national product. Unlike agriculture,\nsmall business does not have Cabinet-level representation, nor\ndoes it, like minority, Spanish-speaking, and consumer groups,\nhave White House representation. The Department of Commerce\nand Small Business Administration are responsible for advancing\nits interests. Small business, however, feels that in\nrelation to its contribution to the national economy and its\nhistorical cohesiveness and identity as a major group in\nAmerican life, it lacks adequate voice and influence in Federal\npolicy making. Cost implications would be minimal.\n- 2 -\n(2)\nTo expand the availability of investment and working capital\ngenerally for the creation, growth and expansion of small business\nand resulting job opportunities:\na.\nPledge renewed efforts for enactment of legislation to\nextend and make permanent the $50,000 corporate tax\nsurcharge exemption together with other business tax cuts\ntied to overall reductions in Federal spending.\nb.\nDirect that the Secretary of the Treasury undertake a special\nreview of tax policies as they affect the survival and growth\nof small business, including the feasibility of a graduated\ncorporate income tax, and report his findings to the President\nin 90 days.\nc.\nDirect that the EPB, within the next 90 days, undertake a\nreview of the effectiveness and efficiency of SBA's loan\nguarantee and financial assistance programs and recommend\nways to expand the availability of capital for small business\nand at the same time cut loan processing time and costs.\nd.\nEmphasize that the most effective overall solution to the\ncapital formation needs of businesses of all sizes is creation\nof a stable economic evironment for investment through\npolicies to control inflation by curbing government spending\nand returning to a balanced budget.\nDiscussion\nCurrent national economic problems have made it more difficult\nfor small business to finance working capital and growth needs from\nretained earnings and from the capital markets. Small businessmen\nfeel that Federal tax policies and policies of the banking community\ndiscriminate in favor of large corporate enterprises. Although the\nultimate solution to the capital problem for both large and small\nbusinesses is a balanced Federal budget, selective remedial actions\nof the type outlined above appear justified. Cost implications for\nFY '77 are negligible, however, subsequent Fiscal Years would be\nimpacted by net losses on guaranteed loans (4% over life of the loan)\nand any changes in tax policies.\n- 3 -\n(3)\nTo improve the environment for development of new, technologically\ninnovative enterprises with their attendant job opportunities:\na.\nDirect that the Economic Policy Board, within the next 90 days,\nmake recommendations to improve the environment and the\nprocess for stimulating the development of small, risk-\noriented enterprises dedicated to advanced technology; includ-\ning needed changes in:\n- Tax laws to provide adequate incentives for direct invest-\nment in small technical enterprises and for attraction and\nand retention of capable managers and key employees\n- Securities regulations that disproportionately increase\ncosts of administration for small business and reduce in-\ncentives for investment in these enterprises.\n- Government R&D policies as they impact on small private\ntechnical enterprises\nDiscussion\nIn a dynamic and highly competitive world economy a vigorous rate of\ndevelopment and application of new technology is essential for growth in\njobs, exports and favorable international trade balances for the U. S. A\nprimary source of innovation is American small business. However, the\nclimate is not favorable for the start-up of small, highly innovative, risky,\nadvanced technology companies. Formation of such enterprises has fallen\nto near zero rates in recent years. Major steps are critically needed to\nassure that the climate for this type of entrepreneur is preserved. The\nrate of job creation is faster in the young, innovative high technology\ncompany than in more mature organizations. Cost implications for FY 77\nand beyond cannot be determined until recommended studies are completed.\n(4)\nTo reduce the burden of unnecessary paperwork and regulation on\nsmall business:\na.\nDirect that the SBA strengthen its advocacy capability to:\n-\nRepresent small business interests in the formulation\nand application of regulations concerned with protecting\nhealth, safety and the environment\n- 4 -\n-\nMonitor and report to the public quarterly on progress\nin efforts now underway to reduce the government's\npaperwork burden on small businesses\nb.\nDesignate ERDA as a \"model agency\" for the Federal\ngovernment in streamlining reporting and contracting\nprocedures which bear upon small business.\nDiscussion\nSmall business is particularly vulnerable to government reporting,\nregulatory and procurement policies. It is less capable than is\nbig business of absorbing the costs and satisfying the expertise\nrequirements generated by government rules and regulations.\nSpecial emphasis in this area is warranted. Cost implications\nare negligible.\nXXX\nConclusion\nSmall business initiatives should be prominent in the State of the Union\naddress and in the Administration's economic program. Small business\nis a major force in the national economy, and, traditionally, in the\nconstituency of the Republican party. It is clear that small business itself\nincreasingly feels forgotten, harassed and submerged by the interests of\nbig government, business and labor.\nNotwithstanding the Administration's initiatives for regulatory and\npaperwork reform and for tax cuts and spending restraint, the President\nhas been increasingly portrayed as a proponent of big business.\nAction to\ncorrect this impression should have the highest priority."
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