Business likes status quo, and Bush
The presidential campaign trail seems to be lined with more businessmen applauding Vice-President George Bush than Massachusetts Gov. Michael Dukakis. But that's not so much because of what Mr. Bush would do for business as it is what he says he won't do to it.
As a Republican vice-president, Mr. Bush has demonstrated his pro-business bent, especially with respect to deregulation. His vice-presidential pick of Sen. Dan Quayle has not undermined this. Almost all of the senator's major votes have gone against the AFL-CIO's position, according to the union.
``From a voting record standpoint, no [senator] has had a better small-business voting record than Quayle,'' says John Sloan, president of the National Federation of Independent Business (NFIB).
On the other hand, Sen. Lloyd Bentsen, the Democrats' vice-presidential candidate, has only a 50 percent record favoring small business, Mr. Sloan says.
Business, both large and small, leans toward Bush, since Mr. Dukakis seems ``to focus more on the people and the labor force, and less on the entrepreneur and investors,'' says John Galles, executive vice-president of National Small Business United.
Dukakis has not made himself very well known to business leaders, agrees James Howell, the chief economist at Bank of Boston.
``I suspect if you went back and looked at his itinerary, you would find that there were very, very few visits into the corporate board rooms,'' Mr. Howell says. To many businesspeople, he says, Dukakis is ``just a blank.''
And Bush gets high marks for taking advantage of that situation.
``Bush has been very successful in painting him as an Eastern liberal who is for larger government. And to the business community, that means higher taxes,'' says Howell, who is from Texas. ``As a sixth-generation Southerner, I know today that my colleagues there and my family there regard anybody who lives in Boston as a liberal.''
Furthermore, Bush's Republican, pro-business credentials are solid.
``I don't think there's any instance where Bush has been responsible for getting out a health-and-safety regulation,'' says Kathy Meyer, a lawyer at Public Citizen's Congress Watch, where she has just completed a study of the candidate's role as head of the Presidential Task Force on Regulatory Relief. ``Time and time again, he's been responsible for delaying or completely eliminating those kinds of regulations at the behest of industry groups.''
A recent NFIB poll showed that almost 80 percent of its members opposed mandated benefits, and the same number opposed tax hikes. About 70 percent favored Bush over Dukakis.
``Our members believe the present policies have given them an opportunity to build and grow, so they don't want something dramatic in the form of change,'' Sloan says. ``To overhaul the system is not something they're looking for.''
Bush has made a number of other promises of interest to certain industry groups, including:
Tax breaks for oil and gas drillers.
Cutting the capital-gains tax rate from 28 percent to 15 percent.
Offering federal benefits to persuade companies to relocate or open up in depressed rural areas.
Most important to businesspeople, however, is that Bush has pledged not to mandate a number of costly benefits, while Dukakis has. Bush says he would not force businesses to provide employees with minimum health insurance benefits that would raise the cost of doing business. Bush has promised to create 30 million jobs in eight years, a task considered unrealistic by some of his own economic advisers.
Dukakis, on the other hand, has already placed mandatory health care coverage on Massachusetts companies, and many business leaders fear such a program on the national level.
In the area of child care, although Bush has put forward a plan that would ask something of business groups and would be almost as costly as Dukakis's proposed $2.5 billion child-care plan, it would not target private business. Rather, parents of children under four years of age would be given about $1,000 a child per year, and could choose their own day care. Two smaller plans, at a cost of $50 million a year, would require every federal agency to provide employees with child care, and set up a federal reinsurance pool to make it easier for employers to get liability insurance to do this.
Critics of the plans ask the Republicans how they intend to pay for all this without raising taxes, cutting spending in other areas, or boosting the deficit.
The American Business Conference Inc., a nonpartisan coalition of about 100 large growth companies, says most of its members don't think meaningful deficit reduction can occur without raising revenues and making prudent spending cuts.
``For them, the deficit is the single most crucial issue facing policymakers of the US,'' says John Endean, the group's director of policy analysis. Members, he says, overwhelmingly support an increase in value-added tax, or consumption-based tax.
A poll conducted earlier this year by Northwestern University's Kellogg School of Management found that the majority of chief executive officers interviewed do not buy Bush's economic policies or his antitax stand.
Richard Rahn, a Bush adviser and the chief economist at the United States Chamber of Commerce, contends, however, that although the deficit is important, ``most businessmen are more concerned with maintaining economic growth.''
``Most of my associates feel that we've got a good thing going - and it can be made better,'' adds Carey Stacey, president of the National Association of Women Business Owners.
Assuming normal economic growth rates continue over the next four years, Dr. Rahn figures that about $445 billion more a year will come from tax revenues alone. This can be achieved through a plan very close to what Bush is proposing in his ``flexible freeze,'' Rahn says. ``The Democratic program would end up costing a lot of money and would slow economic growth, reduce our progress against poverty, and increase real per capita income of all our citizens.''
But wary economists say Bush's plans could add more than $10 billion to the deficit in one year.
Among small-business leaders, there are some ``very serious questions lingering'' about this, says Mr. Galles at National Small Business United.
``Ronald Reagan may suggest he hasn't raised taxes, but that's baloney as well,'' he says. ``There's been individual ratcheting of benefits - a percentage point here and a percentage point there. The overall impact is a much more expensive way to fund the government.''
Others contend that steady economic growth can eliminate the huge budget deficit. ``Projections show that the deficit will be less than 2 percent of GNP by 1994,'' says Norman Ture, president at the Institute for Research on the Economics of Taxation. ``If you have a really severe restraint on spending, which is what the vice-president is suggesting with a flexible freeze, you even go into a surplus.''
Mr. Ture does feel, however, that Bush departs from sound economics in suggesting an increase in the minimum wage and providing a youth training wage - a lower wage with guaranteed job training.
But Dukakis's alternative, business leaders also stress, is mandatory health care, possibly mandatory child care, and an even higher minimum wage.
``As women, we know the needs out there for being able to take care of your family,'' says Ms. Stacey of the Women Business Owners. As small companies, we know that if you have to give somebody several months off and hold the job open for them, you'd go under.''