Thursday, September 30, 2010

Evil but brilliant

I have to hand it to the PR departments of the health insurance industry. They can always come up with some negative spin for positive healthcare news.

Last week was the 6 month anniversary of the signing of the new health care law. With the anniversary came new consumer protections that the public loves. Here are a couple:

--children under the age of 19 with pre-existing conditions can no longer be excluded from a health insurance policy.

--young adults up to age 26 can stay on their parents’ health plans.

--health insurance companies can no longer take insurance away from a person who is receiving medical treatment (rescission) if the person forgot to mention something minor in their medical history or made a mistake filling out their application.

--cost-sharing for policyholders is eliminated for preventative health services.

Yesterday I attended a healthcare reform “lunch and learn” sponsored by the Greater Florence Chamber of Commerce. One of the panelists was from Blue Cross Blue Shield of SC. He was a congenial guy, just moving to the Columbia area to take a vice president position with the company

As soon as the gentlemen stood up to make his presentation, it was clear that in spite of his affable private nature, he was a company man through and through.

The positive news from the week before now became threatening and ominous. The consumer benefits were now evil government REGULATIONS.

“We now have regulations about children pre-existing conditions.”

“We now have regulations about young adults.”

“We now have regulations about misinformation on policies.”

“We now have regulations about preventive healthcare.”


Is your blood boiling yet? How dare the government impose more regulations? We need less regulation not more, right?  KILL HEALTH CARE REFORM.

Brilliant PR. Evil but brilliant. And you pay for it with your premiums.

Monday, September 27, 2010

Mulvaney doesn't back small business in state

The following opinion editorial by Frank Knapp ran September 25, 2010, in the Rock Hill Herald

Improving our economy and creating more jobs is a top priority of The South Carolina Small Business Chamber of Commerce (SCSBCC). As a statewide advocacy organization of well over 5,000 members, we work with our legislature and state agencies to make South Carolina more small business friendly. While we do not endorse candidates for office, we do believe in educating the voters about our experience with those who are running.

We recently released our assessment of the gubernatorial candidates, "Small Business and the Next Governor". That analysis can be found by clicking here.

In the Fifth Congressional District our organization has decided that it is important for the voters to be made aware of legislative action taken by one of the candidates that significantly and negatively impacted small business job creation in our state.

In 2003, the SCSBCC learned that roughly 42 percent of our state's procurement dollars were going to out-of-state contractors. It was clear to us that keeping more of this approximately 1.3 billion in taxpayer dollars (at that time) in South Carolina would greatly help our small businesses and economy.

The SCSBCC immediately began working to find a way to address this problem. Keeping more of our procurement dollars in state without any mandates posed a serious problem. However, with the help of the S.C. Budget and Control Board staff, an acceptable method of encouraging out-of-state contractors to subcontract 20 to 40 percent of their procurement contracts with South Carolina small businesses for goods and services was developed.

The legislation was introduced in 2008 with Senate and House Republican leadership as co-sponsors. The General Assembly recognized the economic development potential of the bill and passed it that year.

Unfortunately, Governor Mark Sanford vetoed the bill with his standard libertarian explanation of letting the free market reign. The Senate overrode the veto but problems arose in the House.

At the time Mick Mulvaney, who is running for Congress, was serving in the House. Mr. Mulvaney successfully spread misinformation about the bill's impact causing confusion. As a result, the vote to override the veto failed by only three votes.

Immediately a Republican House member from Lexington County began approaching other members to correct the confusion in hopes of having the vote reconsidered, a common practice.

However, Mr. Mulvaney, seeing the effort quickly called for another vote before his fellow Republican could succeed. The bill was dead.

In 2009 the same bill was reintroduced, passed and again vetoed. By then Mr. Mulvaney had become a Senator. He still voted against the bill that year but was unable to stop the Senate from overriding the Governor's veto. The House also overrode the veto.

Today we have that law on the books and it is giving our small businesses a greater chance to benefit from our state procurement system.

But it was Mr. Mulvaney's successful efforts to stop this pro-small business legislation that allowed another year of millions of our taxpayer dollars to go needlessly out-of-state.

Frank Knapp is the president and CEO of The South Carolina Small Business Chamber of Commerce.

Thursday, September 23, 2010

End tax cuts for the wealthiest

The following opinion editorial by Frank Knapp ran in The Hill's Congress Blog today.

The Board of Directors of The South Carolina Small Business Chamber of Commerce voted this week to support the effort in Congress to end tax cuts for the very rich. Here’s why.

First, letting the tax cuts for the top two income brackets expire will impact very few real small business owners. The reality is that almost all small business owners are middle-class Americans with middle-class incomes. Of those who aren’t, more small business owners are lower income than upper income. Only two to three percent of tax filers who claim income from a business make over $250,000 a year. Many of these people are wealthy passive investors or part of large corporate law and accounting firms who invest in financial and real estate partnerships — not hands-on small business owners.

While big business CEOs, Congressional lobbyists, Wall Street bankers, some attorneys and other professionals will lose their tax cuts on the portion of their incomes that is over $250,000 (they keep the tax cuts on the portion under $250,000) — the vast majority of small business owners will not be impacted at all.

Second, if our government is going to borrow $700 billion from China and other nations, using it to cut taxes on the very rich is an extremely counterproductive way to put American’s back to work and grow our economy.

The Congressional Budget Office this year looked at 11 policy options in terms of boosting small business and creating local jobs. It found that keeping the tax cuts for the top two income brackets was the least effective because higher-income households simply don’t spend as much of their income as middle and lower-income households. Remember — spending money in your local economy helps small businesses, not sending checks to hedge funds or putting money into “too big to fail” banks that favor quick buck speculation at the expense of Main Street investment.

Instead of handing more money to those who won’t create main street jobs, the money would be better used to help the real engine of our economy — the small businesses that create most of our new jobs. We should be stimulating more customers for our small businesses through infrastructure projects and keeping teachers and law enforcement officers working. We could also be giving incentives to small businesses to start hiring again by reducing their payroll taxes or other measures. And we can do all of this for a lot less money and reduce our nation’s deficit at the same time.

Allowing the tax cuts on the top two income tax brackets to expire and putting the money into more productive “job creating” or deficit reduction uses is the right business decision for our country’s small businesses and our nation’s economy.


Since going public with the above message, I have received a couple e-mails disagreeing with our Board’s decision. However, I have received many more agreeing with our position.

One message congratulated us on being “courageous”. But our position on the tax cuts isn’t courageous; it was a good business decision.

Does a decision on the tax cuts have to be made? Yes, by law all the tax rates revert back to the 2000 levels if Congress takes no action.

Do the tax cuts for the majority of American’s help the economy? Yes

Do the tax cuts for the wealthiest American’s in the top two brackets do a good job of creating jobs? No, these specific tax cuts are a terrible way to create jobs.

Can we afford the tax cuts for the wealthiest if they don’t do a good job stimulating our economy? No, not if we’re concerned about the national debt.

Can we spend some or all of the same money for these tax cuts better to create jobs? Yes

So there’s nothing courageous about our position. It was just a good business decision. And I thought everybody wanted government to run more like a business.

Tuesday, September 21, 2010

Happy Anniversary, Now Kill It

This Thursday it will be 6 months since President Obama signed the new health care reform bill. What is taking so long for all the predicted devastation to happen?

Am I being too sarcastic? I don’t think so.

Just last night I watched Representative Joe “You Lie” Wilson (R-SC) on the evening news call for repealing the new health care law. Every Republican incumbent and challenger running for Congress is saying the same thing on the campaign trail.

Today’s piece in the New York Times tells how Republicans will either repeal or chip away at the new health care law depending on home many new seats in Congress they pick up in November.

So what does Rep. Wilson and the Republican Party want to repeal or kill that will affect small businesses?

--Tax credits are in effect right now for small businesses that offer health insurance to their employees. In South Carolina 53,000 small businesses (88% of all SC businesses) have fewer than 24 employees and thus qualify for the new federal tax credits for providing health insurance to employees. About 16,000 businesses in South Carolina have 10 or fewer employees with less than $25,000 annual average wages and are thus eligible for the full tax credit of 35% of premium paid by employer. Joe and the GOP say NO more tax credits.

--Insurance exchanges in every state will create very large pools of individuals and employees of small businesses where they will purchase insurance. These exchanges will reduce insurance premiums for small businesses by cutting the current 18% higher administrative costs small businesses now pay. In addition increased competition for this pool of business will also drive down insurance premiums. Joe and the GOP say NO. (Instead of exchanges, Joe and the GOP want to require small businesses to join Association Health Plans run by organizations like the NFIB--the pretender small business organization--in a far less and now obsolete effort to create insurance pools.)

--In the insurance exchanges small businesses will no longer have to pay higher premiums for all workers if they have an employee with a pre-existing condition. Joe and the GOP say NO.

These are just the great benefits small businesses will enjoy under the new health care law that Rep. Wilson and the stronger Congressional GOP want to eliminate.

But since the new law does not require businesses to offer insurance if they have 50 or fewer full-time employees (about 97% of all South Carolina’s businesses) and in our state 97% of the remaining businesses already offer health insurance to employees, where is the GOP evidence that repeal is a good thing.

My challenge to Rep. Wilson and anyone out there who supports repealing or a budgetary dismantling the new health care law is this.

Name me one small business that has been harmed by the new law today. Just one. Give me a name and number and I’ll contact them and publicize their plight.

I’m waiting.

Wednesday, September 15, 2010

Success in the U.S. Senate

Yesterday the U.S. Senate voted to start debate on the Small Business Jobs Act with a 61-37 cloture vote. GOP Senators George Voinovich and George Lemieux joined all the Democrats and Independents in the successful vote. Voinovich and Lemieux, about whom I have previously blogged, had voted earlier for the $30 billion Lending Fund for community banks to be included in the bill.

Economists predict that the Lending Fund will result in $300 billion in small business loans from the community banks.

This crucial cloture vote came after a full-blown Capitol press conference at which I spoke yesterday morning. If you want to check out my portion of the press conference, here is the video, below.

The Senate is expected to pass the Small Business Jobs Act this week. Then it will go back to the House, which had already passed a version of the bill. If the differences can be reconciled quickly, we might even see President Obama sign the bill next week.

Oh, but the press conference was only the start of my day. I and representatives from other organizations with the American Sustainable Business Council also had meetings with members of Congress and staff. I finally had to run out of a meeting with Rep. Steve Kagan of Wisconsin, chair of the Congressional Business Owners' Caucus, to get to my 7 p.m. flight.

It really was a great day for small businesses.

Tuesday, September 14, 2010

We’re Just Getting Started

This blog also ran in The Hill's Congressional Blog today.
Today looks to be a great day that’s been a long time coming.

Today the Senate finally starts the voting on the Small Business Jobs Act and with the word that Senator Voinovich will support the bill success is at hand. Before the voting began a press conference was held in the Mansfield Room of the Capitol.

SC Smalll Business Chamber of Commerce CEO
Frank Knapp, Jr. at the podium in Washington, DC

Speaking were Senators Landrieu, Boxer, Merkely and Cantwell . Also speaking at the event was Gene Sperling, Counselor to Treasury Secretary Geithner, John Arensmeyer, president of the Small Business Majority and me. (Click here for video of the press conference.)

Image courtesy of
Today I was acting not only as president of the South Carolina Small Business Chamber of Commerce, but also as the spokesperson for the American Sustainable Business Council.

The ASBC is a growing coalition of 23 business networks representing more than 50,000 companies, investors, entrepreneurs, and business professionals.

Many of these ASBC member organizations were also represented at today’s event.

We appeared today to show the strong, unequivocal support the Small Business Jobs Act has from the small business community. Our small business organizations have worked very hard to promote passage of legislation that will start the small business loans and lines of credit flowing once again.

On the Lending Fund and other provisions in this bill, we have spoken with a clear voice, with no hesitation, no reservations, no looking over our shoulders—this bill must pass for the good of our nation.

Image Courtesy
of Littler Government Affairs Team
Small businesses are ready to lead the country out of this poor economy and—with the financial resources and other provisions in this bill—we will do just that.

We need Congress to stand with us in supporting the small business community and get this done now.

Yes, this looks to be a great day. But it also represents a great 2010—a truly transformational year for the millions of small businesses across this country. A year when Congress heard the real voices of small business and said "Yes" to making health care more affordable and protecting small businesses from future financial crises and predatory financial practices.

And now: expanding small business lending. I am sure that none of these ASBC folks at the press conference were on any speed dials of the Capital press corps attending today’s event. But with the track record we have laid down this year, the media needs to reach out to the ASBC and its members to hear the real voice of America’s small business.

We’re just getting started.

Thursday, September 9, 2010

Saving Americana, and more

Below is my opinion editorial that ran in today's State:

I hope Kristy Eppley Rupon’s recent story about the pending demise of three locally owned hardware stores (“Hammered: The Great Recession,” Aug. 23) opened some eyes to a problem that has been developing for some time.

The owners of these and other hardware stores interviewed by Rupon pointed to competition from big-box retailers and the recession as causing hard times for them. Nationally, sales in this retail sector are down 6 percent in 2009, and more than 500 locally owned hardware

stores and home centers have shuttered since 2005.

We can expect more of the same unless the economy dramatically improves or behavior changes. And since the national economy is a little out of the individual’s control, we need to focus on changing behavior.

Owners are doing their part, changing locations, using social media, but they can’t make enough changes alone to save this slice of Americana. As one store owner lamented after an encounter with a customer who clearly had come there only after failing to find the needed product at big-box stores, “Sometimes they just take for granted that we’re always going to be here.”

Unfortunately, our small businesses will not always be here unless we, the consumers, change our buying behavior. It is not just locally owned hardware stores that are struggling and disappearing: All small businesses are facing the same extreme challenges to survive.

The S.C. Small Business Chamber of Commerce has launched an initiative to raise the awareness of consumers to the opportunities and the need to shop outside big-box or corporate-owned businesses. Our BuySC campaign isn’t asking consumers to completely abandon shopping at big-box stores. That horse already has left the barn.

The goal of BuySC is to increase consumer shopping at locally owned businesses by only 15 percent. That might translate into only one less trip to Wal-Mart, Lowe’s, Target or Kroger a month for most people.

Achieving this goal will put more money into our local economy — money that will circulate many times over, buying other local goods and services instead of being sent out of state to a corporate headquarters using one of those too-big-to-fail banks.

To help consumers find goods and services from locally owned businesses, we are creating, a free, on-line directory of businesses vetted for this purpose. Arranged by county and by business category, offers consumers the ability to find locally owned businesses asking for their business. listings are free to locally owned small businesses. Instructions for being listed can be found on the site, by calling (803)252-5733 or by sending a message to

Consumers have the power to build their local economies. We can sit back and hope that state officials will successfully attract a big business to the area to create hundreds of jobs. Or we, each and every one of us, can take action starting today to help our locally owned small businesses create those same numbers of jobs — jobs that won’t be shipped overseas and that will foster a sustainable local economy. Join the BuySC campaign, and take control of your local economy.

Tuesday, September 7, 2010

Health Care News for Small Business

From now until Election Day all you are going to hear from some political candidates is how the new health care law is bad for small businesses.

Of course this isn’t true but without something more tangible than common sense to counter the misinformation, confusion reigns.

So here is the good news. A study appearing in the New England Journal of Medicine concludes that the new health care law will be good for small businesses and their employees.

The study conducted by the highly respected Rand Corporation using their sophisticated computer modeling predicts that small businesses will pay less for health insurance under the new law when fully implemented. The reduction will be due to the health insurance exchanges that create large pools of employees and individuals buying insurance thus driving down premiums and create other advantages for small business such as lower administration costs.

Unfortunately the authors of the study—Christine Eibner, Peter S. Hussey, and Federico Girosi—do not take into consideration the immediate reduction in health insurance costs for small businesses due to the tax credits now available for those with less than 25 employees.

However, the tangible scientific evidence now belongs to those of us who supported the new health care law. But unfortunately, the political naysayers don’t believe in science. So the misinformation machine will just keep rolling.

Wednesday, September 1, 2010

Fear Fear Fear…And very little truth

Hopefully you have read my last blog in which I analyze how small business friendly our candidates for Governor might be based upon their response to a questionnaire, their voting records and past experience with The South Carolina Small Business Chamber of Commerce. If you haven’t, read it before you read today’s post.

On Monday, I sent out a press release containing essentially what is in Tuesday’s blog. Almost immediately I received an e-mail from a publisher of one of our state’s fine weekly papers.

Here are our 3 e-mails unedited:

August 30, 2010 12:17PM
If this is not an endorsement of Sheheen, then I have never seen an endorsement. I also take issue with you for endorsing Obama's health care fiasco. It all looks like your political bias is showing. We'll never save this country if we let the Democrats run it.
August 30, 2010 12:34PM
You mean that your paper has never printed a negative op.ed about a candidate yet did not endorse the opponent? We have every responsibility to educate small businesses about the candidates. To the degree that Haley chose not to participate or even respond is a red flag. I would be happy to debate the new health care law with you whenever you would like. However, your bias on that is clearly showing in calling it "Obamacare".
August 30, 2010 12:34 PM
You are right. I am biased against Obama. Scares the hell out of me that now I am old enough for Social Security and Medicare, which I have paid for all these years, Obama and his cohorts want to cut benefits. I saw your ad on TV and yes, guess what, they do plan death panels. We can support people who have never tried to work and cut back on the people who have worked, saved and paid their taxes. We can cut Social Security and give the savings to illegal aliens. Why did I waste my time working? Why did I spend 14 hours a day, 7 days a week, working to establish a small business when government is going to take everything away from me? Yes, I am biased and very afraid.

First, neither my comments in the press release or in the questionnaire do I “endorse” the new health care law. The questionnaire only asks about the candidate’s intentions regarding implementing the law.

Second, there was no endorsement of a candidate, only an analysis of the candidates.

Third, what does the Governor of South Carolina have to do with Medicare or Social Security or even the new health care law (when it is ruled Constitutional by the courts)?

I could go on about how the publisher is incorrect about cuts in Social Security, Medicare and especially “death panels.” And no, the publisher's Social Security benefits will not be cut to give benefits to illegal aliens.

But here is what is important for us to understand.

Once you peel away the knee-jerk, politically conservative rhetoric that has been drilled into the publisher's head from years of right-wing radio and TV talk show entertainers, the real emotion escapes—FEAR.

Fear of not having the nation’s “socialism” programs, Social Security and Medicare, available for the publisher's own use. Fear that those less deserving of our social safety net will take away the publisher's benefits.

Like millions of Americans, the publisher has been fed political fear day in and day out for years. Fear of Democrats (even though Social Security and Medicare were the creation of Democratics over strong Republican oppostion). Fear of any change even though what has been in place has failed so badly. The publisher is “very afraid.”

The reality of this entrenched and pervasive fear is not healthy for our country. We cannot be a nation of “afraids”. We must be optimists, not people who vote based on fear because we are told that new ways to solve problems are scary.

By definition an entrepreneur who starts a small business is an optimist believing that they can change their economic environment. They don’t know fear and they don’t like the word “no”.

That is why my publisher’s fear makes me afraid. Afraid that we’ve lost what has made our country great--a “can do” spirit and a sense of national community working together to move the country forward.