PRESIDENT CLINTON AND VICE PRESIDENT GORE
Encouraging the Growth of Small Business
"The entrepreneurial spirit burns brightly as the creativity and productivity of America's small businesses make our Nation's business community the envy of the world."
-- President Bill Clinton
THE STRONGEST ECONOMY IN A GENERATION
Longest Economic Expansion in U.S. History. In February 2000, the United States entered the 107th consecutive month of economic expansion -- the longest economic expansion in history. Economic growth has averaged 3.8 percent per year since President Clinton and Vice President Gore took office, after growing just 1.7 percent per year from 1988-1992. [National Bureau of Economic Research and Council of Economic Advisors]
Moving From Record Deficits to Record Surplus. In 1992, the deficit in the Federal budget was $290 billion - the largest dollar deficit in American history. In January 1993, the Congressional Budget Office projected that the deficit would grow to $455 billion by 2000. The Office of Management and Budget is now projecting a $211 billion surplus for 2000 - the third consecutive surplus and the largest surplus ever, even after adjusting for inflation. Compared with original projections, that is $666 billion less in government drain on the economy and $666 billion more potentially available for private investment in this one year alone. [Office of Management and Budget; National Economic Council, 6/26/00]
Over 22 Million New Jobs. 22.1 million new jobs have been created since 1993, the most jobs ever created under a single Administration -- and more new jobs than Presidents Reagan and Bush created during their three terms. Under President Clinton and Vice President Gore, the economy has added an average of 248,000 jobs per month, the highest under any President. This compares to 52,000 per month under President Bush and 167,000 per month under President Reagan. [White House Fact Sheet, 7/7/00]
Strong Private Sector Growth. The private sector of the economy has grown 4.5 percent annually since 1993, compared to 3.4 percent under President Reagan and 1.8 percent under President Bush. Since 1993, 20 million new jobs have been created in the private sector, the highest share since Harry Truman was president (excluding temporary Census workers). That's 225,000 private jobs created per month, the fastest rate of any President on record. [White House Fact Sheet, 7/7/00]
Lowest Inflation Since 1965. In 1999, the underlying core rate of inflation was 1.9 percent - the lowest since 1965. Under President Reagan and President Bush, the underlying core rate of inflation averaged 4.7 percent annually. [White House Fact Sheet, 4/13/00]
Unemployment Is Nearly the Lowest in Three Decades. Unemployment is down from 7.5 percent in 1992 to 4.0 percent in June 2000, and in April 2000 the unemployment rate was the lowest in thirty years. The unemployment rate has fallen for seven years in a row, and has remained below 5 percent for 34 months in a row. African-American unemployment has fallen from 14.2 percent in 1992 to an average of 7.7 percent in the first half of 2000 -- the lowest rate on record. The unemployment rate for Hispanics has fallen from 11.6 percent in 1992 to an average of 5.7 percent in the first half of 2000 -- the lowest rate on record. For women the unemployment rate was 4.1 percent in June -- nearly the lowest since 1953. [White House Fact Sheet, 7/7/00]
Small Businesses Contribute to Economic Growth. America's 25.5 million small businesses generate more than half of the nation's gross domestic product; represent 26 percent of America's exporters; create 80 percent of all the net new jobs in the United States; and employ 52 percent of the private sector work force. [Small Business Administration]
STRONG ECONOMY DRIVES SMALL BUSINESS GROWTH
Record Number of New Businesses. More than 5.9 million new businesses have been created since President Clinton and Vice President Gore took office. A record 898,000 new businesses opened their doors in 1998 -- nearly 130,000 more than in 1990, the best year of the Bush Administration. [Small Business Administration, 1/00; SBA, The Facts About Small Business 1999]
Small Business Bankruptcies at Lowest Rate in Nearly Two Decades. Small business bankruptcies decreased by 17.9 percent between 1998 and 1999, to the lowest level in over 18 years. And in 1996, the business failure index was at its lowest level since 1989. [SBA, Small Business Economic Indicators, 1998; SBA, The State of Small Business: A Report of the President, 1997]
Number of Small Businesses that Export Tripled in Last Decade. The number of small firms that export products has tripled, rising from 69,354 in 1987 to 209,455 in 1997. Nearly 97 percent of American firms that export are small businesses, and in the past five years, the value of small business exports has increased 300 percent. [SBA, News Release, 11/10/99]
Small Businesses Report More Income. Corporate profits increased in 1999 for the tenth year in a row, up 49.2 percent since 1992. Not since the recovery from the 1981-82 recession has there been such a string of increases in corporate profits. Nonfarm proprietorship earnings, an important measure of the health of the small business sector, has increased by 34 percent since 1992. The growth in proprietorship earnings from 1991-96 was the highest for any five-year period since 1983-88. [Commerce Department, BEA; SBA, The State of Small Business: A Report of the President, 1997]
ENHANCING INTERNATIONAL TRADE AND FEDERAL PROCUREMENT OPPORTUNITIES
Expanding Exports and Creating Jobs. Since President Clinton took office, the Administration has concluded nearly 300 new trade agreements. This export expansion has accounted for more than one-quarter of the record U.S. economic growth between 1992 and 1998 and has helped created jobs that, on average, pay 15 percent more than non-export related jobs. Small businesses represent nearly 97 percent of all U.S. exporters. [National Security Council; SBA, "Learn About SBA"]
Historic U.S.-China Trade Agreement. After 13 years of negotiations, the Administration concluded a landmark agreement for China's entry into the World Trade Organization. China agreed to grant the U.S. significant new access to its rapidly growing market of over one billion people, while we have agreed simply to maintain the market access policies we already apply to China by granting it permanent Normal Trade Relations. The U.S.-China agreement slashes Chinese tariffs on American goods; opens China's markets to American services, and contains safeguards against unfair trading practices. China's membership in the WTO will spur economic reforms in China, open China to information and ideas from around the world, and strengthen the rule of law in China.
Created Three Major Global Trade Agreements In the World Trade Organization. In the last year, this Administration completed a "trifecta" of three major global trade agreements in the World Trade Organization: the Information Technology Agreement covering $500 billion in global trade and more than $100 billion in U.S. exports, the global telecommunications services agreement (which will create more than a million jobs in the next ten years) and the financial services accord (which covers 95 percent of the global financial services market). Together, these initiatives cover trade totaling more than $1 trillion annually.
Eliminated Barriers to Open Trade in Asia Pacific Nations from Asia Pacific Economic Cooperation (APEC) Summit. The Administration secured commitments from Asian Pacific nations to eliminate barriers to open trade in the region by 2020 for developing countries and 2010 for industrialized countries. Over the next two years, 15 sectors will be identified for tariff reductions, including energy products and services, environmental technologies and services, natural resources, medical equipment, telecommunications, gems and jewelry.
Enacted the African Growth and Opportunity Act. In May 2000, President Clinton signed into law the African Growth and Opportunity Act, groundbreaking legislation which recognizes African countries' efforts to institute sound economic policies and reform. The philosophy of the legislation is simple: America stands ready to help those African countries that undertake difficult reforms to build a better future. Effective aid, combined with strong reform and increased trade and investment, will help bring Africa into the global economy and create new markets for U.S. exports. [White House, Office of the Press Secretary, 5/18/00]
Enacted the Caribbean Basin Trade Initiative. Also in May 2000, President Clinton signed into law the U.S.-Caribbean Basin Trade Partnership Act (CBTPA), which will expand our trading relationship with Caribbean and Central American countries. The CBTPA will create opportunities for American companies and workers as it provides enhanced market access and economic stimulus for countries devastated by Hurricane Mitch. [White House, Office of the Press Secretary, 5/18/00]
Trade Agreements Enforcement Initiative. The President is committed to ensuring that trade is free and fair and that American companies and workers benefit fully from our bilateral and multilateral trade agreements. He is proposing in FY 2001 that the Commerce Department and related agencies have the resources necessary to monitor and enforce international trade agreements.
Streamlining the Government Procurement System. In FY 1999, SBA helped small firms receive 23.1 percent of Federal contracts -- meeting the annual small business goal. The Clinton-Gore Administration has worked with Congress to streamline the procurement process through administrative changes and the Federal Acquisition Reform Act of 1996. The changes instituted in these reforms are cost-effective for the government and will enable businesses to compete more effectively for government contracts worth billions of dollars. [SBA, Office of Government Contracting, FY 99 Report on Annual Procurement Preference Goaling Achievements, 4/24/00; SBA, FY99 Annual Performance Report; The State of Small Business: A Report of the President, 1997]
Electronic Gateway to Procurement Information. The Small Business Administration's web page includes a search engine for its database of federal, state and private contracts available to small firms.
OPENING DOORS FOR SMALL BUSINESS
Expanding Access to Capital. Since 1992, the Clinton-Gore Administration has backed more than $77 billion in loans to small business -- more than in the previous 25 years combined. In 1999 alone, the SBA maintained a portfolio of more than $40 billion in loan guarantees to 486,000 small businesses that otherwise would not have had such access to capital. The SBA backed another $12 billion in loans to 50,000 small businesses in 1999. [Small Business Administration]
Doubled Venture Capital Investments. In the last three years, the SBA's Small Business Investment Company Program doubled venture capital investments. In 1999, this program made 53 percent of all institutional venture capital deals in the United States, enabling 3,100 venture capital investments totaling $4.2 billion. [Small Business Administration]
Providing Loans and Technical Assistance through the MicroLoan Program. The MicroLoan program combines the resources and experience of the Small Business Administration with those of locally based nonprofit organizations to provide small loans and technical assistance to small business owners. To date, SBA has not experienced any defaults on the direct microloan program, suggesting that the technical assistance has had a positive impact. In 1999 alone, SBA provided counseling and technical help to more than 900,000 small businesses, and the Administration intends to increase that number to 1.2 million in 2001 -- a 300,000 increase since 1993. [Small Business Administration, The Facts About the MicroLoan Program for Entrepreneurs; FY 2001 Budget, p. 217]
Cutting Taxes for Small Business. President Clinton signed the Taxpayer Relief Act of 1997, which provided an estimated $20 billion in tax relief to small business over the next ten years. The bill included provisions to reduce the estate tax; increase the health insurance deduction for self-employed individuals; and update home office deductions. It also reduced capital gains taxes from 28 percent to 20 percent, giving small businesses an infusion of capital. The new law also exempts small corporations from alternative minimum tax calculations, saving about two million businesses from complex and unnecessary paperwork. [SBA, The State of Small Business: A Report of the President, 1997]
Ensuring Access to Health Insurance for Small Business. In August 1996, President Clinton enacted the Kennedy-Kassebaum Health Insurance Portability and Accountability Act (HIPAA). HIPAA required insurance companies to sell coverage to small employer groups and to individuals who lose group coverage without regard to their health risk status. The bill also eliminated the discriminatory tax treatment of the approximately 10 million Americans who are self employed, increasing the tax deductibility of their health insurance premiums from 30 percent to 80 percent by 2006. [White House, Office of the Press Secretary, 8/21/96]
Increasing Pension Security for Small Business. President Clinton signed the Small Business Job Protection Act of 1996, which created a simplified 401(k) retirement plan for small businesses, making it easier for such companies to offer pensions to their employees. The bill provided a tax credit to small business that adopt pension plans; created a simplified and better defined contribution plan for small businesses; and promoted pension portability. [White House, Office of the Press Secretary, 8/20/96]
Removing Barriers to Electronic Commerce. To ensure the continued growth of e-commerce, Vice President Gore announced a new initiative in November 1999, to revise laws and regulations that impose barriers to the growth of electronic commerce. A working group will gather comments from the public, State and Local governments, and Federal agencies, and develop recommendations to facilitate e-commerce while ensuring consumer protection. More than 4.5 million small employers (83 percent of all employers) used computer equipment in their operations in 1998. [SBA, The Facts About Small Business 1999]
Tapping America's Potential with the New Markets Initiative. President Clinton's New Markets Initiative is helping to bring economic development and renewal to communities that have not benefited from the soaring economy by prompting approximately $15 billion in new investment in urban and rural areas. The Initiative is providing tax credits, loan guarantee incentives, a network of private venture capital companies, technical assistance and mentoring programs to stimulate $22 billion in new investment in urban and rural areas.
Ready with Disaster Relief. In 1999 alone, the Small Business Administration provided victims of natural disasters with access to more than 36,000 disaster loans totaling over $936 million. [Small Business Administration]
Prepared with Y2K Assistance. On April 2, 1999, President Clinton signed the Small Business Year 2000 Readiness Act to help small business get loans to avoid and repair problems stemming from Y2K related computer problems. [White House, Office of the Press Secretary, 4/2/99]
Using the Internet to Make Information Available to Small Business Owners. The Small Business Administration web site [www.sba.gov] offers everything from loans to outreach initiatives for women and minority-owned businesses. The highly praised site also provides e-mail counseling and mentoring as well as online educational courses. Forbes Interactive Money Guide named the SBA site a "Forbes Favorite" (government) web site in September 1999, and the site was also named as one of Windows Magazine's 101 Best Business sites. The highest average hits per week to the SBA web site was over 9.4 million.
CREATING OPPORTUNITIES FOR MINORITIES AND WOMEN
Tripled the Number of Loans to Minorities and Women. Since 1992, the Clinton-Gore Administration has provided $17.5 billion in loans to 77,000 minority-owned businesses and $11.7 billion in loans to 79,000 women -- more than the SBA provided in total during its previous 40 years. [Small Business Administration]
Expanded Small Business Opportunities for Women. The Clinton-Gore Administration won $9 million in FY 2000 for Women's Business Centers, which provide resources to foster increased entrepreneurship among women. In his FY 2001 budget, President Clinton has proposed to expand the Women's Business Center network budget to $12 million, an increase of 33 percent. Today this network includes more than 80 women's business centers, including an Online Women's Business Center. Of those, 59 centers are currently funded by SBA grants; 22 have graduated from funding and are operating independently. [Small Business Administration]
Supporting Minority Business Communities and Increasing Access to Capital. Building on the efforts of the SBA, Vice President Gore unveiled aggressive plans to increase lending and business services to the African American and Hispanic business communities nationwide. The SBA has set a goal of providing an estimated total of $1.86 billion in loans to African American small businesses over a three-year period. In addition, the Vice President announced an unprecedented agreement between SBA and the "Big Three" U.S. automakers to increase subcontracting awards to minority businesses by nearly $3 billion over the next three years -- a 50 percent increase over current levels.
Ensuring Minority Business Owners Have a Fair Opportunity to Compete. The President signed the Transportation Equity Act for the 21st Century into law on June 9, 1998. The Act protects the Disadvantaged Business Enterprise (DBE) Program, a program that ensures that minority and women-owned businesses have an opportunity to compete for transportation projects. The Administration helped defeat an amendment to the House version of this bill that would have eliminated the DBE Program. In a different measure, the President also approved the creation of a new program to target assistance to minority-owned businesses in industries that continue to reflect the effects of discrimination. As a result, thousands of minority-owned businesses will be able to compete more effectively for government contracts. [White House, Office of the Press Secretary, 6/9/98]
Helping Veterans Succeed in Business. In August 1999, President Clinton signed into law the Veterans Entrepreneurship and Small Business Development Act, which provides assistance to veterans who are entrepreneurs and especially to service-disabled veteran entrepreneurs. The bill also includes several measures designed to cushion the impact on small businesses when their owners or essential employees who are reservists are ordered to active duty during military conflicts. The SBA's Office of Veterans Affairs offers helps veterans succeed in business, with programs such as the Veterans Business Outreach Program, which provides business training, counseling and mentoring to eligible veterans owning or considering starting a small business. [White House, Office of the Press Secretary, 8/17/99]
Updated July 2000
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