by Joel C. Rosenberg
Post Date:
January 19, 2002 Issue Date:
January 19, 2002

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GOP strategists believe the health of small business could determine the outcome of the midterm elections and radically reshape President Bush's political fortunes. If bankruptcies and unemployment surge, for example, the GOP's House majority could be doomed. Now the Washington-based Small Business Survival Committee (SBSC) has issued a list of the best and worst developments affecting small businesses in 2001. Among the best:

Passage of the Bush tax-cut package. Cash-starved small businesses needed to keep more of their earnings. Interest rate cuts. The Fed cut short-term rates from 6.5 percent to 1.75 percent in 2001. Lower energy prices. Last year began with an energy crisis, but ended with gas prices down 25 to 30 percent. Moratorium on Internet taxes. Congress extended the moratorium for two more years. Scuttling the Kyoto Treaty. Bush is right: Unnecessary environmental regulations will prolong the recession. Settling the Microsoft suit. Washington should go after bin Laden, not Bill Gates. The tech sector has suffered enough. Strong box-office sales. Hollywood raked in a record $8.38 billion in ticket sales in 2001, up 9 percent from 2000. SBSC believes this suggests "consumers are beginning to venture back out, a positive sign for the hard-hit entertainment and hospitality industries." Erased ergonomic regulations. SBSC credited Congress and the White House with $125 billion in estimated savings to business by scuttling outgoing President Clinton's last-minute regulations.

Among the worst:

Sept. 11 and anthrax. "Crushing blow," says SBSC, on top of an already weak economy. The recession. Small business owners are really in trouble from declining capital investment and consumer spending. Blackouts in California. Good news: They weren't as bad as many had feared. The resurrection of the death tax. "While the Bush tax package deserves tremendous praise for eliminating the death tax, the bad news is that after 10 years, the death tax is scheduled to rise from the dead and wreak havoc on small businesses once again," SBSC points out. Change in Senate leadership. With Sen. Jim Jeffords leaving the GOP, and the rise of Sen. Tom Daschle, pro-growth legislation is in trouble. No trade clause. Small businesses account for 96 percent of all exporters. But while the House voted to give President Bush trade promotion authority, Daschle won't even bring up TPA for a vote. No energy plan. Daschle scuttled the vote on a pro-jobs energy bill, even though unions like the Teamsters love it.

Guess where former Gov. Mark Racicot-a moderate-is giving his first major speech as incoming Republican National Committee chairman? At the annual Conservative Political Action Conference (CPAC) in Washington on Jan. 29. With a record of tax increases and big spending as Montana governor (WORLD, Dec. 15, 2001), Racicot has a lot of explaining to do to rank-and-file conservatives about how he will lead the Party of Reagan. But CPAC spokesman Craig Shirley isn't worried. "It's his coming out party," says Shirley. "Given his outstanding job during the Florida recount, he can expect a warm reception" from the 3,600 registered delegates. "What our people want is to see Racicot take it to the Democrats, take it Daschle. If he can do that, he'll be fine." Legendary, outgoing conservative Sens. Jesse Helms and Phil Gramm will both be honored at separate evening banquets. Vice President Dick Cheney begins 2002 with a new press secretary, Jennifer Millerwise. She becomes one of the women serving as top Bush administration communications strategists, including Karen Hughes in the West Wing, Mary Matalin with the V.P., and Torie Clarke at the Pentagon. She served as one of White House spokesman Ari Fleischer's deputies.

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