NFIB Weekly News
Leading the News
Trump Said To Be Softening Stance On NAFTA.
Jonathan Swan reported for Axios (1/14) that President Trump “is developing a softer attitude” towards NAFTA. Swan said “five sources who’ve spoken privately with Trump about NAFTA say he’s taking more seriously the risks of withdrawing.” In addition, a “conga-line of Republican senators have met with the president and explained to him why they consider NAFTA so important to their states.” Reportedly, two arguments have “helped change Trump’s thinking: Withdrawing from NAFTA might interrupt the stock market’s record-breaking run under his presidency,” and “would harm farmers and agricultural communities – whom Trump considers ‘my people.’”
2017 An “All-Time Record Setter” For Small Business Optimism. Business Climate
The NFIB reports in its latest Small Business Optimism index that “small business confidence blasted off the day after the 2016 election and remained in the stratosphere for all of 2017, making last year an all-time record setter.” NFIB President and CEO Juanita Duggan said, “2017 was the most remarkable year in the 45-year history of the NFIB Optimism Index. ... With a massive tax cut this year, accompanied by significant regulatory relief, we expect very strong growth, millions more jobs, and higher pay for Americans.” NFIB Chief Economist Bill Dunkelberg said, “We’ve been doing this research for nearly half a century, longer than anyone else, and I’ve never seen anything like 2017.” Last December’s Optimism Index was “slightly lower than the near-record November report” at 104.9, a result that is “still a historically exceptional performance.”
Survey: Small Business Owners Optimistic, Driven.
Victoria Treyger wrote in Entrepreneur Magazine (1/3) that “the U.S. Small Business Administration reports that this country has 29.6 million small business owners. Together, these owners constitute an army of hard-working Americans striving to build something for themselves, be their own boss and support their families and local economies.” A survey conducted by online lender Kabbage examined “the common professional and personal challenges of small business owners and how they balance their work- and home-life to pursue their passions.” The survey found “that almost half...said they used personal savings to pay for one or multiple aspects of their business, while 21 percent reported using more than a quarter of those savings.” The data also “showed the sheer commitment the small business owners surveyed had to succeeding; they also described themselves as highly optimistic about the future. Two-thirds expected to end 2017 with higher revenues, with more than half anticipating earning 10 percent or more than they had the previous year.”
AP Analysis: Tax Cuts Among Trump’s “Major Accomplishments” For 2017.
In a review of President Trump and Republicans’ legislative record for the year, the AP (12/28, Taylor) lists “a major tax cut” among their “major accomplishments.” The AP says the effort to pass the tax bill “was far more focused and organized” than the push to repeal the ACA “and it paid off.” Although the President’s “grasp of health care legislation was spotty at best, his cheerleading helped on taxes.” However, the issue “consumed most of the fall, and during the debate GOP leaders were reluctant to take any chances by angering Republicans on other topics such as the immigration and the budget. That meant talks with Democrats faltered – and left a huge pile of unfinished business until next year.”
Trump: Tax Reform Bill Will Be “A Great Christmas Gift” For Middle Class.
President Trump on Saturday called the final Republican tax reform bill released Friday “a great Christmas gift” for the middle class and predicted the US economy will “start to rock” after Congress passes the legislation. While media coverage portrayed the President as taking an early victory lap, analyses were more focused on specific provisions in the plan.
Politico (12/16, Samuelsohn) reported Trump “took an early victory lap Saturday as Republicans closed in on his administration’s first major legislative accomplishment and the biggest overhaul to U.S. tax policy in 30 years.” The Hill (12/16, Greenwood) reported the President said, “This is going to be one of the greatest gifts for the middle-income people of this country that they’ve ever gotten for Christmas.”
Small Business Optimism Near All-Time High.
The NFIB indicated that small business optimism in November reached a level not seen “since the roaring Reagan economy” in 1983. NFIB President and CEO Juanita Duggan is quoted saying, “We haven’t seen this kind of optimism in 34 years, and we’ve seen it only once in the 44 years that NFIB has been conducting this research. ... Small business owners are exuberant about the economy, and they are ready to lead the U.S. economy in a period of robust growth.” The Small Business Optimism index for November increased by 3.7 points, “a sharp increase over what was already a near-record performance the previous month.” NFIB said, “Eight of 10 components posted gains, including a stunning and rare 16-point gain in Expected Better Business Conditions and a 13-point jump in Sales Expectations.” NFIB Chief Economist Bill Dunkelberg is quoted saying, “The NFIB indicators clearly anticipate further upticks in economic growth, perhaps pushing up toward four percent GDP growth for the fourth quarter. This is a dramatically different picture than owners presented during the weak 2009-16 recovery. ... The change in the management team in Washington has dramatically improved expectations.”
Economists: Trump Has Had Positive Effects On US Economic Growth, Hiring, Stock Market.
The Wall Street Journal (1/11, Leubsdorf, Subscription Publication) reported that economists it surveyed say President Trump has for the most part had positive effects on the growth of the US economy, employment, and the stock market’s performance since taking over the White House. For 2018, those economists also predicted both continued growth in the economy and a drop in the number of unemployed, pointing to tax reform as a key factor. The Journal said most of those economists indicated that the election of Trump has played a role in the recent strength of the economy.
Sen. Shaheen Says SBA Lending Programs Should Be Expanded To Help Women Entrepreneurs. Small Business Marketing
Writing in Forbes (1/11), Sen. Jeanne Shaheen, the Ranking Member of the Senate Small Business and Entrepreneurship Committee, discussed what steps can be taken to help women entrepreneurs succeed. Women entrepreneurs may be the country’s greatest untapped economic resource, she said, and Congress can help them by “ending pay discrimination and strengthening workplace protections for women. Expanding programs to alleviate the burden of student debt, developing computer science training programs and modernizing the Small Business Administration’s loan and entrepreneurship programs would also be a positive step.”
Mnuchin: Tax Law Will Be Revenue Neutral Over 10 Years Despite Estimates.
The Wall Street Journal (1/12, Davidson, Subscription Publication) reported Treasury Secretary Mnuchin in a speech on Friday said that he does not believe Congress will need to pass legislation to fix the new tax law because “there’s nothing that we’ve identified so far that we think is particularly problematic.” Reuters (1/12, Nomiyama, Baum) reported Mnuchin also said that he expects the law will become revenue neutral over 10 years despite prior estimates from the Joint Committee on Taxation. Mnuchin stated, “We think there will be over $1 trillion in growth, so I do think this will pay for itself.”
Meanwhile, The Hill (1/12, Jagoda) reported Mnuchin conceded the IRS will likely have to hire more employees in order to implement the tax law. Mnuchin said, “This touches every single aspect of the IRS, from technology to processes to forms, and we are speaking with Congress about getting additional funding for the implementation. ... We would expect that we would hire a significant number of people to help with the implementation.”
Treasury Soliciting Feedback On Changes To Community Reinvestment Act.
In continuing coverage, Kayla Tausche reported on CNBC’s Closing Bell (1/11, 4:46 p.m. EST) that the Treasury Department is soliciting feedback from stakeholders about changing the Community Reinvestment Act, which requires deposit-taking banks to make financial products available to the communities in which they are chartered in an effort to prevent redlining. In a report published in June, Treasury “recommended broad changes to the law, including how banks are graded and how ‘communities’ are defined.” Tausche said the CRA is a law both Treasury Secretary Steven Mnuchin and Comptroller of the Currency Joseph Otting “know intimately” – when they ran OneWest Bank, she said, it received a “satisfactory” CRA rating due to its “high marks for lending” but “low marks for location of branches and hours.” Otting “was grilled by the Fed and OCC during the sale of the bank to CIT, with regulators demanding to know how the larger bank would, in fact, serve its larger community once the merger went through,” Tausche noted. CNBC (1/11) also featured this clip on its website.
Advice Offered To Would-Be Veteran Entrepreneurs.
Contributor Dawna Jarvis wrote in the Huffington Post (1/10) that “a study commissioned and conducted by the Small Business Administration (SBA) Office of Advocacy found that veterans were 45% more likely to become entrepreneurs and/or small business owners than those who have not served.” This disparity is perhaps due to “the fact that veterans do tend to be more disciplined and accepting of hardship than others and that the transition from being in the military to suitable ‘mainstream’ civilian employment can be a hard one.” With this in mind, Jarvis offered advice for would-be veteran entrepreneurs. She suggested that they start a business using skills they have already developed. And, when starting out, she encouraged entrepreneurs to seek advice from mentors and counselors.
Seed Expects Banks To Begin To Listen To Small Businesses.
PYMNTS (1/3) wrote that many “waves in the evolution of banking and financial services appear to have roots, at least partially, in the small and medium-sized business (SMB) community.” Indeed, FinTechs “have stepped onto the market in the last decade with products designed specifically for small business owners that aren’t having their needs met by banks, and this has also led to a new trend of FinTechs and banks working together to service joint SMB clients.” SEED CEO Brian Merritt “said there are changes ahead for the SMB financial services market.” In particular, he expected banks will “learn to listen to SMBs.”
Facebook Says It Will Emphasize Personal Posts, De-Emphasize News.
Facebook upended its relationship with news publishers Thursday when it announced what the New York Times (1/11, Isaac, Subscription Publication) called “sweeping changes” designed to “prioritize” posts from family and friends “while de-emphasizing content from publishers and brands.” Facebook chief Mark Zuckerberg said the platform seeks more “meaningful interaction,” the Times reported, adding that “the shift is the most significant overhaul in years to Facebook’s News Feed.” Zuckerberg said, “We want to make sure that our products are not just fun, but are good for people. ... We need to refocus the system.”
Adobe Marketing Cloud, Mediaocean Partner To Automate Ad-Buying Process. Wages and Benefits
Axios (1/9, Fischer) reported “Facebook and Google will be paying attention” to a partnership between the TV ad-buying platform company Mediaocean and Adobe’s Marketing Cloud. The partnership will allow users “to integrate digital ad buying with TV” and “automate every aspect of a TV ad buy” from the Adobe Advertising Cloud, an agnostic tool for buying some $3 billion in ads, or an “estimated 75% of all TV ads in the U.S.,” Axios said, adding that the deal “represents the first time an independent marketing stack company has partnered to use Mediaocean to manage the full television buying process.”
Google’s Chrome Ad Blocking Will Begin Next Month.
Digiday (1/5, Benes) reported that “Google’s ad-blocking version of Chrome is going live next month, whether publishers are ready for it or not.” Digiday said publishers can check an Ad Experience Report from Google to see whether their sites meet Google standards, but “warning labels aren’t automatically removed” after publishers remedy a problem. Instead, a publisher needs to ask for “another review of its site before its status is changed in the Google ad experience API,” Digiday says.
Researchers Find 38% Of Top 1,000 Websites Are Trying To Foil Ad Blockers.
TechCrunch (12/28, Coldewey) reports that researchers from two US universities found in a study of the 10,000 “top” sites on the web that more than 30% of them are using technology to try to stop ad blocking. Of the top 1,000 sites, researchers found more than 38% using “countermeasures,” which TechCrunch says are both “silent and highly sophisticated.” TechCrunch describes the methodology of the researchers from the University of Iowa and UC Riverside, and the article also describes how some of the countermeasures work.
Instagram Plan For “Recommended” Posts Likely Driven By Ad Demand For Facebook.
Ad Age (12/28, Slefo) reports that Instagram is instituting a practice similar to one used by parent Facebook and will display “recommended for you” posts “that are liked by people the user follows.” Ad Age says its source indicated “the move was likely made in an effort to meet advertising demand for Facebook,” which “is maxed out on ad inventory.” The change wasn’t generally announced but was instead “quietly” included in Instagram’s own help center.
Small Businesses Can Use The Amazon Marketplace To Their Advantage.
Inc. Magazine (12/28, Swanciger) reports that small businesses can better compete with Amazon by better positioning themselves for last-mile deliveries. The article says “Amazon dominated” the holiday season, and its “incredible growth and the potential threat it poses to traditional retailers has been well documented.” However, “small business owners don’t have to be left behind” and “may be well-positioned to benefit from the home delivery boom.” Inc. Magazine adds that “Amazon’s success is built on a massive logistical operation,” but small businesses can use the Amazon Marketplace to gain “access to Amazon’s 150 million monthly visitors and the marketing muscle of the e-commerce giant.” Further, by using Fulfillment by Amazon, “you even get the advantage of free shipping to Prime members.”
Republicans Expected To Target Employer Mandate Next.
The New York Times (1/14, Pear, Subscription Publication) reported that “having wiped out” the individual mandate, Republicans in Congress are “taking aim at a new target: rolling back the mandate in the Affordable Care Act that employers offer coverage to employees.” Many employers who see the mandate “as onerous and expensive” are “cheering the effort.” The Times, however, cautioned that “such a move could also increase costs for the federal government. ... If fewer people receive coverage from employers, more will qualify for subsidized coverage in the public marketplaces created by the Affordable Care Act.”
Two Million Workers Have Received Bonuses Due To Tax Cuts.
The Washington Times (1/14, Boyer) reported that according to Americans for Tax Reform, “at least 2 million US workers had received bonuses, pay raises or other new benefits from more than 130 companies as a result of the tax cuts.” Among the companies offering the new benefits were AT&T which gave $1,000 bonuses to 200,000 employees; Copperleaf Assisted Living in Schofield, Wisconsin, which gave $200 to $600 bonuses for 175 employees; Fiat/Chrysler, which gave $2,000 bonuses to 60,000 workers; and Old Dominion Freight Line, which gave $500 bonuses to its 22,000 non-executive employees. The Times added that while House Minority Leader Pelosi “belittled” the bonuses as “crumbs,” to “workers receiving them, it’s welcome cash in their pockets.”
Puzder: New Tax Law, Deregulation Will Lead To Wage Increases.
In an op-ed for the Wall Street Journal (1/7, Subscription Publication), Andy Puzder, former CEO of CKE Restaurants, argued that the left would address wage stagnation with mandated wage increases, but that approach leads employers to cut jobs and reduce hours to address their increased costs. Instead, Puzder wrote that President trump’s deregulation efforts are fueling an economic surge that will get an additional boost from the recently-passed tax reforms. That growth, he added, will cause employers to compete for workers and drive up wages.
Former McDonald’s CEO Warns Minimum Wage Increases Reduce Jobs Where They’re Needed Most.
In commentary published by Forbes (1/4), former McDonald’s CEO Ed Rensi spoke out against recent minimum wage increases. He said the “negative impacts of these minimum wage hikes will be greatest in economically disadvantaged areas, where small businesses more often lack the profit margins necessary to cover the associated labor cost increases, and jobseekers lack the skills commensurate with the new wage floor.” In other words, argued Rensi, “minimum wage increases reduce jobs where they’re needed most.”
Trump’s Proposed Rule Seeks To Make It Easier For Small Businesses To Form Association Health Plans.
Margot Sanger-Katz wrote in the New York Times (1/5, Subscription Publication) “The Upshot” blog that President Trump’s proposed rule on association health plans aims “to make it easier for groups of individuals and small businesses to band together and buy the kind of insurance that large companies offer their workers.” She added that this type of coverage “is regulated under federal labor law and isn’t subject to all the requirements and consumer protections that apply to individual and small business insurance under Obamacare.” According to Sanger-Katz, advocates of the rule contend that it will make healthcare more affordable, but supporters of the ACA are concerned it could further destabilize insurance marketplaces.
Bank Of America To Give Bonuses To More Than Half Its Employees After Tax Overhaul.
The Wall Street Journal (12/22, Ensign, Subscription Publication) reported that Bank of America plans to give $1,000 bonuses for more than half of its employees a result of the tax overhaul bill, making the bank the latest company to announce this type of perk after the legislation passed last week. An internal memo by CEO Brian Moynihan showed that the bank will give one-time bonuses to employees earning up to $150,000 per year in total compensation, which would affect about 145,000 employees. CNBC (12/22) also reported.