Bernie Sanders on Small Business and Entrepreneurship
Small business is the driving force of America’s economy. Bernie Sanders has worked hard to push for policies that help small businesses, encourage entrepreneurship, and foster innovation. Among these, he has supported loans for small businesses, pushed for reforming intellectual property regimes, and advocated for giving the entrepreneurs of tomorrow access to good education.
Supporting Small Businesses
Bernie believes that small businesses are essential for America’s economy to thrive. In order to succeed, small business must have access to low-interest loans and other forms of support. To this end, Bernie has supported and helped pass many pieces of legislation to help small businesses grow.
Why should we provide low-interest loans and other support to small businesses?
Small businesses take out loans so that they can improve and grow their businesses. Low interest rates on these loans can help businesses pay them back quickly while maintaining good cash flow, expanding the overall domestic economy, and creating more jobs.
Why aren’t there enough loans available to small businesses?
When Glass-Steagall was eliminated under President Bill Clinton, the wall of separation between commercial banking and investment banking was removed. Local banks increasingly began to invest in risky Wall Street trading and speculation and became less inclined to make low-interest loans to small businesses. This resulted in the 2008 financial crisis. Learn more about Glass-Steagall, as well as why Bernie wants to reinstate it at the Financial Regulation issue page.
How has Bernie acted to support small businesses?
“In the midst of the very difficult recession that we’re in, helping small businesses receive affordable credit is imperative.” — Bernie, October 2010
In his Six-Point Plan to rein in Wall Street, Bernie advocated for laws to hold small business loan interest rates to the same rate offered by the Federal Reserve to foreign banks. Once small businesses have access to the same interest rates as foreign banks to finance their own growth, there will be more incentive for investors to invest their money into domestic small businesses, and not as much incentive for them to invest in foreign banks. The result would be to grow the domestic economy instead of diverting investments overseas to countries having little incentive to reinvest that money back in the U.S.
Additionally, Bernie helped pass the Small Business Jobs Act, which gave low interest loans to small businesses and supported the small community banks through which the loans were disbursed. The legislation also offered some $12 billion nationwide in small business tax relief during the height of the recent economic crisis in 2010 and an additional $30 billion in capital for small businesses.
What about big businesses? Where does Bernie stand on big corporations?
He has lots of opinions, as you might imagine, all geared around making sure big businesses thrive, but not at the expense of small businesses, the environment, our democracy, and regular American people. Check out the Corporate Regulation page to learn more about his stances regarding corporations, and learn more about the influence of money in politics here.
Entrepreneurship and Innovation
The United States has been a world leader in entrepreneurship and innovation, which are the engines that drive our economy. To continue this tradition of leadership and growth, Bernie has supported increasing access to education, reforming intellectual property regimes, and defending the openness and network neutrality of the Internet.
Our businesses rely on high-quality, accessible education.
Businesses need an educated workforce to adapt to the future needs of the marketplace, and Bernie supports several measures that help improve access to education. Dive into Bernie’s record on proposed policies to increase access to education here.
The current patent system is in need of reform.
Businesses rely on the U.S. patent system to protect their innovations from being copied by competitors, but this system is being abused in several ways by large corporations. Bernie recognizes that in some industries, the way the patent system is structured has the effect of stifling innovation, and in the case of the pharmaceutical industry has proposed a solution to this problem.
What is wrong with how the patent system works?
From overly-broad patents, to companies that do nothing but collect patents for litigation purposes, to drawn-out legal battles, to overly-lengthy terms, the patent system is plagued with problems that negatively impact businesses.
Give me an example?
In the pharmaceutical industry, much of research spending by private companies goes toward attempting to make drugs similar to those already patented rather than discovering new medicines and treatments.
An article from the World Health Organizations describes these “me-too” drugs as, “likely of little value” to the public since “they effectively undermine the intent of patent protection, without even providing much benefit from price competition.”
Has Bernie proposed any reforms along these lines?
Bernie has introduced pieces of patent reform legislation designed with the dual purpose of drastically reducing drug prices and incentivizing the pharmaceutical industry to focus on innovation rather than “me-too” medications.
In 2005 and 2007, Bernie introduced legislation that would have allowed generic versions of new medications to be manufactured immediately in order to affordably satisfy demand, while introducing a prize fund to reward pharmaceutical innovations. In 2012, Bernie introduced a similar piece of legislation that focused specifically on AIDS treatments.
(for other actions Bernie has taken to reduce the cost of medication, see Healthcare: Drug Manufacturers.)
Bernie supports net neutrality, the principle that information traveling over the internet should all be treated and routed equally, without preferential treatment. Net neutrality is essential for innovation.
How does net neutrality affect small businesses?
Without net neutrality policies, small businesses could be subject to increased costs to supply content to consumers. Small businesses could also suffer unfair competitive disadvantages from larger businesses who can afford to pay for special treatment from Internet Service Providers (ISPs).
In this Senate address from May 2014, Bernie explains why net neutrality is important for small businesses:
Learn more about where Bernie stands on net neutrality and other digital rights here.
Bernie supports reforming the way we bring workers into the U.S. in order to ensure that they are not being exploited to meet the needs of businesses who want to attract and retain the most talented foreign workers. He also wants to ensure that visas aren’t being granted to fill jobs that could be filled by American workers.
What’s the happy medium with regards to visa reform in Bernie’s view?
A quick way to answer this is to describe the visa reform Bernie last supported in Congress. In 2013, he voted for the latest attempt at comprehensive immigration reform.
Not only did this bill provide a path to citizenship for undocumented immigrants, it also proposed changes to the H-1B visa program, one of the biggest sources of immigration frustration among businesses in the United States. The H-1B visa program is intended for highly-skilled workers who fill roles in American companies that can’t be filled by domestic workers. The bill Bernie voted for in 2013 would have increased the H-1B visa cap to 110,000-180,000 per year — up from 65,000 — and balanced the needs for higher-skilled foreign workers, while at the same protected the American workforce.
The bill also proposed a new visa for foreign entrepreneurs, a W visa for lower-skilled workers, and additional visas and green cards for students who have STEM degrees from U.S. colleges and universities. The different visas the bill proposed would have benefited a wide variety of businesses, both big and small, that required both higher-skilled and lower-skilled workers.
Unfortunately, however, this bill didn’t pass. Learn more about Bernie’s stance on immigration here.