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The ceiling prescribes limits on the government’s outstanding debt, which we are fast on track to shatter. UPDATE: Following passage in the lower chamber, Senate Majority Leader Chuck Schumer, D-N.Y., said he rejected the House-passed bill to raise the debt ceiling and trim federal spending. Check back here for the latest as NSBA continues tracking this important matter. Last week, House Republicans released a draft bill to address the federal debt ceiling, which is the limit imposed by Congress on the amount of debt the U.S. federal government can have outstanding. In 2021, Congress raised this limit to $31.4 trillion; however, this threshold is expected to be exceeded this summer, putting the U.S. federal government at risk for default. Under the House majority’s cursory plan, the federal debt ceiling would be raised by $1.5 trillion or until the end of next March, whichever occurs first. Congressional leaders are also working to ensure any raises in the debt ceiling are paired with spending cuts; the current draft bill would reduce discretionary spending by $130 billion for FY 2024, limiting future increases further to one percent a year for the next 10. According to the Congressional Budget Office, which exercises fiscal oversight over congressional legislation, the bill would save $4.8 trillion through FY 2033, with about $4.3 trillion of policy savings and $545 billion of interest savings. Absent Congressional action, the Treasury Department has been using “extraordinary measures,” such as delaying investments of certain federal retirement funds, since Jan. 19 to stay below the cap. However, Treasury Secretary Janet Yellen said these tools will likely be exhausted by early June. NSBA will continue to monitor activity on the Hill and advocate to ensure small business remains at the forefront of any federal financial decisions. Read more, including details on this debt ceiling proposal, here.

SBA activities start next week, and NSBA’s awards are open for application! Next week is National Small Business Week! Next week, the nation will celebrate Small Business Week, and between April 30 and May 2, the U.S. Small Business Administration (SBA) is holding a virtual conference and will be recognizing the impacts of small businesses across the country. As part of Small Business Week, SBA is recognizing its Resource Partners, including Small Business Development Centers, SCORE offices and more. These entities are funded in part by the SBA, and provide America's small businesses with technical assistance, training, and access to capital. With a record-breaking 10.5 million Americans applying to start a business in the last three years – more than any two years on record – SBA is also recognizing small-business champions and small-business service providers during the ceremony next week. Kicking off this small-business award season with NSBW, NSBA is also proud to announce its 2023 applications for Advocate of the Year are now open! Awarded for the past 15 years, NSBA recognizes outstanding leaders and activists in our small-business community: 1) demonstrating a commitment to small-business advocacy above and beyond policies that specifically impact their own business or industry; 2) working with a proven history of volunteer efforts to advance and improve small business; 3) successfully advocating for pro-small business policies; and 4) growing as a small-business owner, achieving accomplishments worthy of merit as an effective advocate for small-business interests. Applications are due June 26, 2023, and you can read more, apply, or nominate a small business you know that is worthy of praise here!

There is bipartisan support shaping up for small business on Capitol Hill. This week, the House Committee on Small Business (HCSB) held a hearing, “Tax Hikes Crush the Competitiveness of Small Business,” as well as a subcommittee hearing, “Office of Inspector General Reports to Congress on Investigations of Small Business Administration (SB) Programs.” During the tax hearing, Chair Roger Williams (R-Texas) reiterated NSBA’s call for a common sense tax code that works for small businesses, including less regulation and lower rates of liabilities. Reps. on both sides of the aisle agreed that when small businesses are able to save more with lower taxes, owners are more likely to reinvest that money into hiring more employees and workers, buying more goods, and serving more of their local communities. Watch the full hearing here: Convening Wednesday morning, the HCSB Subcommittee on Oversight, Investigations and Regulations gaveled in under Chair Beth Van Duyne (R-Texas). Focused on oversight into mismanagement and redundancies under the SBA. This hearing comes on the heels of two new SBA rules set to take effect this May, including ending the moratorium on lending licenses for SBLCs, as well as a new practice on increasing data transparency for the small-business lending process. Read more about these two rules here, and view the full subcommittee hearing here: Follow NSBA for the latest from Capitol Hill, including small-business updates from the House and Senate Committees on Small Business.

NSBA has consistently called for a unified federal approach, rather than the development of a patchwork 50-state system we are now seeing develop. Data privacy has been a huge issue looming before small-business owners with almost nothing in terms of clear, concise national guidelines or directives. A number of states are now developing their own rules governing internet privacy, even though digital information flow doesn’t stop at state lines. Most recently, legislation is pending in Florida that could ban certain kind of targeted advertising and would be particularly problematic for the smallest of businesses that can’t afford costly and cumbersome software and/or PR firms to manage—and more carefully target—potential customers. Following the sweeping changed enacted by the EU’s General Data Protection Regulation (GDPR) and followed up by several states enacting their own data privacy rules, U.S. businesses are faced with a patchwork of differing standards and rules in an increasingly mobile business environment. Navigating these various rules is complicated for any business. Unlike large businesses with staffs of legal and IT experts, however, small businesses are far less able to shift costs and resources around and face higher risks of running afoul of these rules. Even worse: these rules can stymie existing business-customer relationships and prevent new customer growth. A recent study by Engine, a nonprofit focusing on the convergence of start-ups and hi-tech, estimated that the per-state costs of complying with each law amounts to $15,000-$60,000. The report goes on to state that startups invest anywhere between $100,000-$300,000 in data privacy infrastructure—and the more state laws that get passed, the higher those costs will climb. According to Engine, 90% of startups said online advertising provided their business with an affordable option to launch and/or grow their business, and 86% felt online advertising is important to business survival and growth. Ill-advised attempts to regulate the flow of information on the internet could have tremendous unintended consequences for the ability of small businesses to reach customers and grow their businesses. Small businesses need clear guidelines that fit the U.S. legal system, one that targets abuses, encourages innovation, and permits reasonable flexibility. This is why NSBA has consistently called for a unified federal approach, rather than the development of a patchwork 50-state system we are now seeing develop.

For many small, innovative businesses, noncompete and nondisclosure agreements ensure fair competition against larger companies, but a balanced, comprehensive solution remains outstanding. Earlier today, NSBA submitted formal comments to the Federal Trade Commission on their proposed new rule that would ban companies from requiring their employees to sign non-compete agreements. Oversight of these type of agreements typically has been dealt with at the state level, however the FTC rule proposes a unilateral change that would give them this oversight. For many small, innovative businesses, noncompete and nondisclosure agreements ensure fair competition against larger companies who have greater ability to lure employees—and their working knowledge of the company—away from a smaller competitor. In addition to its comments to the FTC, NSBA has released a survey on how small businesses utilize noncompete and nondisclosure agreements which shows that the size of the business greatly impacts how likely they are to utilize—and successfully enforce—such agreements. If you haven’t yet filed comments, there’s still time and NSBA is here to help. We have developed template comments that you can personalize and send in through our Action Center. Act soon – the deadline is TODAY, April 19!

Designations of the IRS’ new $80 billion remain a top concern for the small-business community. Last week, the Treasury Department and IRS issued their long-term Strategic Operating Plan outlining intentions for spending nearly $80 billion in funding provided by the Inflation Reduction Act (IRA). A plan spanning 160 pages, the IRS has five main objectives guiding allocations of the funding over the next 10 years. Those objectives include: improved services to help taxpayers; quickly resolve taxpayer issues; focus expanded enforcement on high-dollar noncompliance and those with complex tax filings; improve technology and data; and hire and improve the IRS workforce. Each priority objective describes initiatives and projects designed to achieve these goals within the next decade; however, the document provides little insight into the short-term hiring targets. After the IRA provided the $80 billion to the IRS, NSBA expressed concern about what this would mean for owners’ regulatory burdens. The Biden administration maintains this funding will not increase the percentage of audits against taxpayers earning under $400,000 annually, but the IRS has yet to provide specifics regarding actual audit rates. NSBA will continue to monitor the rollout of these new funds for the IRS, and urges policymakers to focus on improving taxpayer services and response times rather than increasing audits on small-business owners. Read the full report on the IRS plan here, and follow us for the latest.

The number of SBLC licenses has remain unchanged since 1982. After more than 40 years, the U.S. Small Business Administration (SBA) is ending its moratorium on admitting new nonbank lenders to its 7(a) loan program. SBA’s 7(a) program is its flagship loan program facilitated through banks and guaranteed nearly 54,000 loans worth more than $36.5 billion in 2021. The SBA rule published in the Federal Register this week will allow non-depository lenders to apply for Small Business Lending Company Licenses (SBLCs), including fintech lenders. SBA’s new standard on lending is set to take effect May 11, with a purpose of growing SBA’s 7(a) lending base to better serve underserved markets. While the number of 7(a) loan applications continues to increase as more Americans start a small business, the number of SBLC licenses has remain unchanged since 1982. Poised to admit three new SBLCs into the program, the SBA is offering continued assurances that new lenders will not lack oversight or proper service to the nation’s small-business community. Non-bank lenders and fintechs often offer flexible credit options and small dollar loans – services not typically prioritized at traditional banks – and SBA’s rule change is an opportunity for more than 8,000 community banks and credit unions to offer affordable loans quickly in underserved communities. Relatedly, an additional new SBA rule on Affiliation and Lending Criteria for the SBA Business Loan Programs will be effective May 11, with a number of agencies and groups already implementing new lending and data sharing practices to support economic recovery and growth. Under this Affiliation and Lending rule change, the SBA will examine each lender applicant on an individual basis to determine capital requirements to hold a license. NSBA will continue to monitor rollout of these rules. Read the complete SBLC Moratorium Rescission rule here, the Affiliation and Lending Criteria rule here, and follow us for the latest.

Small-Business award season is here! In the lead-up to National Small Business Week (NSBW) April 30 – May 2, the U.S. Small Business Administration (SBA) announced this week their Resource Partners of the Year awards. SBA Resource Partners—which include Small Business Development Centers, SCORE offices and more, are funded in part by the SBA, and provide America's small businesses with technical assistance, training, and access to capital. A record-breaking 10.5 million Americans applied to start a business since 2020 – more than any two years on record. The Resource Partner Awards are just a few of the many awards SBA will be giving out in coming weeks to recognize small businesses, small-business champions and small-business service providers. The awardees will be honored at a ceremony during National Small Business Week. Read more from the SBA and National Small Business Week (NSBW) here, and be sure to register for NSBW’s Virtual Summit May 2-3. NSBA is beginning its own awards process, the Lew Shattuck Small Business Advocate of the Year awards – learn more here.

Believe it or not, there are some striking similarities between being a policy advocate and a special agent. In both roles, success relies on a few key traits: persistence, attention to detail, teamwork, and a desire to make a difference. Does the connection seem unlikely? Look no further than dedicated NSBA advocate and former Department of Defense (DoD) Special Agent Michael Koslow. Michael began his career in public service as a criminal investigator with the Air Force Office of Special Investigations (AFOSI), where he specialized in counterintelligence, federal procurement and fraud cases. After rising through the Air Force’s ranks for 16 years, Michael transitioned to the Department of Defense’s Office of the Inspector General (OIG), living out a movie-worthy career of sting operations, FBI details and foreign defense cooperation deals. Notably, he led numerous high-profile investigations into Medicare and Medicaid fraud, as well as cases related to the False Claims and Foreign Corrupt Practices Acts. Michael also remained committed to his military service throughout his time with the DoD. Upon leaving the Air Force, Koslow grew his leadership profile with the California National Guard. In 2009, he became California’s State Command Chief and represented over 93,000 Guardsmen nationwide on the Army National Guard’s Field Advisory Council. Through his duties with the DoD and the National Guard, Michael grew accustomed to the “mission-first” mindset and adding value to teams without seeking the spotlight. After 31 years of government service, and a concurrent 33 years in the military, Michael took his incisive mind and collaborative spirit to the private sector. He founded Aenigma Investigation Agency (AIA) in 2019, where he and his team provide investigative services for criminal, civil, and administrative cases. His work has yielded impressive results, including a 900% increase of Medicare-Medicaid savings for a national healthcare provider. Upon reaching the private sector, Michael was astounded by the exchange of information, ideas and mentorship around him. According to Koslow, the small-business community he entered offered a “cascading effect” of knowledge, networking and business development opportunities. These experiences, along with a lifelong call to service, motivated Michael to pursue policy advocacy outside of his business. Following his acceptance to NSBA’s Leadership Council, Koslow quickly took to helping organize and mobilize his fellow Californian members around key issues like SBIR reauthorization and streamlining federal procurement practices. Koslow considers his collaborative efforts with fellow members a “tremendous privilege” and values NSBA’s ability to cultivate common goals and interests amongst small-business owners from all walks of life. On the policy side, Koslow has taken advantage of the Leadership Council’s public affairs training, calling the programming a “significant conduit” for connecting with and educating legislators on key small-business priorities. With these tools, Koslow maintains constant contact with his member of Congress and other lawmakers from the California delegation, advising them on small-business issues. When asked what advice he’d like to share with fellow NSBA members, Koslow stressed the importance of mentorship and collaboration, stating, “nobody accomplishes anything on their own.” Seeing how NSBA’s priorities transcend the differences between each member’s small business, Michael believes that sharing, listening, and showing up to learn are the keys to success on the Leadership Council. “If you can walk away with even one new piece of information, your time will be worth it,” he added. To learn more about Michael Koslow and AIA, please visit www.aenigmainvestigations.com.

If enacted, the PRO Act will pose far-reaching negative impacts on workers, small businesses, employers, contractors, and unions alike. This week, NSBA wrote a letter to small-business leaders in Congress to express caution around the Protecting the Right to Organize (“PRO”) Act (H.R. 20, S. 567). If enacted, the PRO Act would allow secondary picketing and protesting from unions at storefronts that happen to sell a brand or item affiliated with a union strike or altercation, enabling protestors to direct aggression toward small businesses and their employees on Main Street. Known as secondary boycotts, the PRO Act would make it legal for protestors to disrupt the flow of business and commerce by granting protections to protests at individual storefronts that have no legal affiliation to the boycott or union dispute at hand. The Act also implements a slew of new and daunting regulations changes that businesses must comply with, increasing the amount of paperwork and red tape that is associated with keeping a small business in compliance with the law. At a time in which business owners are just beginning to step out of the economic turmoil faced during the pandemic, the PRO Act would place more barriers on small-business owners who are simply trying to keep their doors open and heads above water. Follow NSBA for developments on the PRO Act, and read our full letter to Congress here, including specifics on how this ill-crafted policy could harm small business.

Under the required small business lending rule, lenders will collect and report information about the small business credit applications they receive, including geographic and demographic data, lending decisions, and the price of credit. Last week, the Consumer Financial Protection Bureau (CFPB) finalized a rule on lending data to increase transparency of banks’ small-business lending. Specifically, under the new rule, traditional and alternative financial institutions will collect and share information about small-business loan applications, including details about location, demographic aspects, lending decisions and credit pricing. Centered around promoting economic development and combatting unlawful discrimination, CFPB says the data collected will create a more comprehensive market view and empower data-driven decision-making. All lenders making more than 100 small-business loans annually will be required to report data, and lenders originating less than 100 loans per year will still be required to adhere to fair lending laws. The rule also covers diverse forms of credit such as closed-end loans, lines of credit, business credit cards, online credit products and merchant cash advances. Follow NSBA as we continue to monitor the effects of this new rule, and read the fact sheet from CFPB here.

NSBA urges Congress to allow self-employed individuals to fully-deduct the cost of their health insurance.