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1975/12/11 - Economic Policy Board
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1534948
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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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The original documents are located in Box 54, folder "1975/12/11 - Economic Policy Board"
of the James M. Cannon Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 54 of the James M. Cannon Files at the Gerald R. Ford Presidential Library
ECONOMIC POLICY BOARD
EXECUTIVE COMMITTEE MEETING
AGENDA
December 11, 1975
8:30 a.m.
Roosevelt Room
1. State of the Union Preparation:
Small Business Initiatives
Gorog
2. Review of Common Situs Picketing Legislation
Dunlop
3.
Economic Assumptions for 1977 Budget
Troika II
MEMORANDUM FOR THE ECONOMIC POLICY BOARD
FROM:
William F. Gorog
SUBJECT:
Progress Report, Small Business Initiatives
The working panel on Small Business has met twice and has under
review the following proposals:
(1)
To assure that small business is fully and formally represented
at the White House level and has a greater voice in the
Administration's economic policy:
a.
Create a new position of Assistant to the President for
Small Business Affairs; or
b.
Create a new position of Deputy or Special Assistant to
the President for Small Business Affairs; or
C. Designate an existing member of the White House staff
as Special Assistant or Deputy Assistant to the
President for Small Business Affairs ("double-hatting") or
d.
Designate an existing member of the White House staff as
chairman of an EPB Interagency Task Group on Small Business
Affairs. The Task Group would have responsibility for reviewing
EPB actions and their effect on Small Business; or
e.
Appoint the SBA Administrator to the Economic Policy Board
and/or the Domestic Council
Discussion
9.4 million small businesses provide 55% of private sector, non-
agricultural employment; 48% of the gross business product;
and 43% of the total gross national product. Unlike agriculture,
small business does not have Cabinet-level representation, nor
does it, like minority, Spanish-speaking, and consumer groups,
have White House representation. The Department of Commerce
and Small Business Administration are responsible for advancing
its interests. Small business, however, feels that in
relation to its contribution to the national economy and its
historical cohesiveness and identity as a major group in
American life, it lacks adequate voice and influence in Federal
policy making. Cost implications would be minimal.
- 2 -
(2)
To expand the availability of investment and working capital
generally for the creation, growth and expansion of small business
and resulting job opportunities:
a.
Pledge renewed efforts for enactment of legislation to
extend and make permanent the $50,000 corporate tax
surcharge exemption together with other business tax cuts
tied to overall reductions in Federal spending.
b.
Direct that the Secretary of the Treasury undertake a special
review of tax policies as they affect the survival and growth
of small business, including the feasibility of a graduated
corporate income tax, and report his findings to the President
in 90 days.
c.
Direct that the EPB, within the next 90 days, undertake a
review of the effectiveness and efficiency of SBA's loan
guarantee and financial assistance programs and recommend
ways to expand the availability of capital for small business
and at the same time cut loan processing time and costs.
d.
Emphasize that the most effective overall solution to the
capital formation needs of businesses of all sizes is creation
of a stable economic evironment for investment through
policies to control inflation by curbing government spending
and returning to a balanced budget.
Discussion
Current national economic problems have made it more difficult
for small business to finance working capital and growth needs from
retained earnings and from the capital markets. Small businessmen
feel that Federal tax policies and policies of the banking community
discriminate in favor of large corporate enterprises. Although the
ultimate solution to the capital problem for both large and small
businesses is a balanced Federal budget, selective remedial actions
of the type outlined above appear justified. Cost implications for
FY '77 are negligible, however, subsequent Fiscal Years would be
impacted by net losses on guaranteed loans (4% over life of the loan)
and any changes in tax policies.
- 3 -
(3)
To improve the environment for development of new, technologically
innovative enterprises with their attendant job opportunities:
a.
Direct that the Economic Policy Board, within the next 90 days,
make recommendations to improve the environment and the
process for stimulating the development of small, risk-
oriented enterprises dedicated to advanced technology; includ-
ing needed changes in:
- Tax laws to provide adequate incentives for direct invest-
ment in small technical enterprises and for attraction and
and retention of capable managers and key employees
- Securities regulations that disproportionately increase
costs of administration for small business and reduce in-
centives for investment in these enterprises.
- Government R&D policies as they impact on small private
technical enterprises
Discussion
In a dynamic and highly competitive world economy a vigorous rate of
development and application of new technology is essential for growth in
jobs, exports and favorable international trade balances for the U. S. A
primary source of innovation is American small business. However, the
climate is not favorable for the start-up of small, highly innovative, risky,
advanced technology companies. Formation of such enterprises has fallen
to near zero rates in recent years. Major steps are critically needed to
assure that the climate for this type of entrepreneur is preserved. The
rate of job creation is faster in the young, innovative high technology
company than in more mature organizations. Cost implications for FY 77
and beyond cannot be determined until recommended studies are completed.
(4)
To reduce the burden of unnecessary paperwork and regulation on
small business:
a.
Direct that the SBA strengthen its advocacy capability to:
-
Represent small business interests in the formulation
and application of regulations concerned with protecting
health, safety and the environment
- 4 -
-
Monitor and report to the public quarterly on progress
in efforts now underway to reduce the government's
paperwork burden on small businesses
b.
Designate ERDA as a "model agency" for the Federal
government in streamlining reporting and contracting
procedures which bear upon small business.
Discussion
Small business is particularly vulnerable to government reporting,
regulatory and procurement policies. It is less capable than is
big business of absorbing the costs and satisfying the expertise
requirements generated by government rules and regulations.
Special emphasis in this area is warranted. Cost implications
are negligible.
XXX
Conclusion
Small business initiatives should be prominent in the State of the Union
address and in the Administration's economic program. Small business
is a major force in the national economy, and, traditionally, in the
constituency of the Republican party. It is clear that small business itself
increasingly feels forgotten, harassed and submerged by the interests of
big government, business and labor.
Notwithstanding the Administration's initiatives for regulatory and
paperwork reform and for tax cuts and spending restraint, the President
has been increasingly portrayed as a proponent of big business.
Action to
correct this impression should have the highest priority.