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Help! Businesses Turn to New Lobbying Group

When John Arensmeyer owned a high-tech company, he didn't feel that the organizations that lobbied on behalf of small business really represented him — or many other business owners.

Verity Jane Smith | Brand X Pictures | Getty Images

"They put forth a monolithic view of what small business wants," says Arensmeyer. "I felt they were overly partisan and overly ideological and didn't really look pragmatically at what small businesses need. So I felt there was an opportunity and a need for a new voice."

In 2005, Arensmeyer founded Small Business Majority, a group that now has 8,000 business people nationwide in its network. Like other lobbying groups, Small Business Majority takes positions on issues including tax and regulation. But it doesn't follow the pack. Arensmeyer's group supported President Barack Obama's overhaul of the health care system — a stark contrast to the National Federation of Independent Business, which unsuccessfully argued against the law before the Supreme Court.

"Policy makers need to listen to different voices because there are a variety of small businesses out there," Arensmeyer says. "One of the things we're trying to do is be somewhat of an aggregator of some of those voices."

Arensmeyer, now based in California, began his working life as a commercial and corporate law attorney in New York, where he was born. He served as chief operating officer of SoftAd Group, a developer of multimedia marketing products, and then founded ACI Interactive, an e-commerce company. He started Small Business Majority after selling his company.

Arensmeyer spoke recently with The Associated Press. Here are excerpts, edited for clarity and brevity:

Q.How is Small Business Majority different from other small business groups?

A. Most small business owners are pragmatic, the vast majority. Some are ideological on the right, some are ideological on the left. The fact is, most small business owners, as I did when I ran my business, get up in the morning and worry about payroll, worry about putting out a good product, worry about their customers, worry about all the bumps in the road. I felt that on many issues, the business organizations took very ideological, sort of blanket positions. For instance, all government is bad, or all government regulation is bad. That's not the way most small business owners think. Most small business owners welcome government involvement sometimes, recognize a role for government sometimes, and sometimes they think government has gone too far. You really need to look at things on an issue by issue basis. Whether the issue was taxes or regulations, just to blankly say all taxes are bad or all regulations are bad, I didn't think that was an appropriate way to look at the world. I think it has hindered the ability of those organizations to really work constructively with policymakers on both sides of the aisle to forge solutions.

Q. When you say that small business owners don't take blanket positions, how do you know that?

A. We've done extensive polling over the last five, six, seven years. When I started the business, it was a feeling I had but it's been validated by polling.

Q.What did you see in the health care law that made you support it?

A. The starting point is that the existing system is completely broken, so it's hard to imagine anything worse than the status quo. That's an important starting point because you have to be open to look at a variety of different solutions. We know that cost is the biggest consideration for small businesses. And so we were obviously looking for ways that the law could bring down costs, whether it was something specific for small businesses like tax credits, or the health insurance exchanges, which will enable small businesses to have the same kind of bargaining power as big businesses and offer their employees the same level of choice.

Small businesses pay 18 percent more than big businesses for the same coverage. The exchanges should get pretty close to leveling that because you spread the administrative costs and you provide small businesses with the same negotiating power as big businesses. That's cost containment. Obviously, getting everyone into this system, the so-called individual responsibility provision, that's a cost containment provision — because right now, we're all paying for people who are using the system and not contributing to it. The provisions in the law that put some kind of control over what the insurance companies can charge versus what they're actually paying for medical care. All of these pieces as the Affordable Care Act began to be debated were important and we thought collectively, they were a huge step in the right direction. ..

All in all, we didn't see any downside. The employer responsibility provision (that requires businesses with more than 50 employees to provide health insurance) is so narrow it only affects 4 percent of all businesses, and of the 4 percent, the vast majority are already offering coverage. You have a very narrow swath of people who were affected by that.

... Is it as perfect as it should be? Of course not, but it's such a staggeringly large improvement over the status quo. That's why we did support the law. What we need to do now is get it implemented, figure out what's working and what's not. Again it's all about pragmatically looking at the facts. If there's a portion of this law that isn't working in two or three years, we should all be ready to stand up and say, it's not working, let's fix it.

Tackling Cost and Customer Concerns

Q. What is another issue that Small Business Majority has a different stand on?

A. Another example is clean energy. Clean energy is a huge economic engine for this country, for big and small businesses, and yet the policies that certain groups push seem to be supported only by traditional fossil fuel companies — not even all big businesses, much less any small businesses. So again, it was an example of groups stating a business position, calling it good for small business, and really only reflecting a narrow segment of the big business community.

We support the cap and trade bill (designed to limit the amount of carbon emissions in the atmosphere). It was designed to put us in a position where there would be incentives to build new clean energy industries, which will have or are having significant benefits for businesses large and small. It's really key to our future global competitiveness as a nation. Small businesses completely get the fact that they're part of the supply chain, that they need to be part of a competitive economy and that clean energy is the key to that. And yet business organizations opposing the cap and trade bill and that are now opposing enforcement of environmental regulations by the EPA on a blanket basis are hindering the continued development of our robust, globally competitive clean energy economy in favor of an outdated energy economy which is oil based. We did focus groups, we did polling, and small businesses do not think that what's good for an outdated fossil fuel industry is good for them or good for the nation's economy moving forward. And yet, some business organizations are taking the position that any regulation is a bad thing. ...

It's all about looking at these things on a case by case, pragmatic basis. That's where we think traditional business organizations are falling down on the job.

Q.Who would be better for business, Romney or Obama?

A. We don't take a position on any campaign. We have, generally speaking, been pleased with the Obama's administration's focus on some key issues that we think are important for small business, like getting the health care law passed. Like having a very robust clean energy focus and an economic plan. Like, the fact that he is focused on small business needs with various tax cuts, 18 that he cites, for small business. Generally, I think the Small Business Administration is functioning well today — but the SBA is not the solution for every small business owner.

To the extent that any candidate is taking a rigid ideological position on things, we don't think that's in the best interest of small business. What we like about the administration the last couple of years is it seems to have had a pragmatic look at issues and was not driven by blanket ideology.

Q.From your vantage point, what are business owners' biggest concerns?

A. We've asked this question in national and state polls for the last couple of years. Costs and the lack of customers always rank up there in the high 30 percent and 40 percent range. We ask them to name their top two concerns. Taxes and regulations are much less of a concern. Regulations have come in 13, 14, 16 percent. We're not saying that small businesses don't care about regulation, and obviously, some businesses care about them more than others. . Small businesses are much more concerned about their customers and about having enough money flowing in the economy to buy their products and services.

Small businesses see themselves as a critical part of our economy that policy makers don't recognize enough. They're not interested in supporting old ways of doing business and they don't see government as ipso fact good or bad. They see it as a necessary part of the economic fabric and they're willing to make calls about whether it's doing the right thing or not on a case-by-case basis.

Q.Do you miss having your own business?

A. I do miss sometimes being in the ebb and flow of the business. But I feel what we're doing now is so exciting and so important. And in many ways, the principles I used to run my business I use to run this organization. You still have to worry about revenue in, money out, employees. ... You still have to care about your product, you have to care about who you are. You have to care about having certain goals that you're trying to achieve. In that sense, many of the principles I used when I ran my business are the same today — but obviously the product is different.

Email us at SmallBiz@cnbc.com and follow us on Twitter @SmallBizCNBC.

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