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, defended net neutrality, pushed for reforming intellectual property regimes, and advocated for giving the entrepreneurs of tomorrow access to good education.
Supporting Small Businesses: The backbone of a healthy economy is made up of small businesses on the “Main Streets” of America, not giant corporations on Wall Street. Bernie wants to make sure that small businesses have the support they need to thrive and expand. He has a record of supporting access to low interest loans for small businesses and legislation, including the Small Business Jobs Act, to help small businesses succeed.
Entrepreneurship & Innovation: The United States has long been a world leader in entrepreneurship and innovation, which in turn are the engines that drive our economy. To continue this tradition of leadership and growth, Bernie has supported increasing access to startup funds, education and training, and opposing intellectual property regimes.
Net Neutrality: Bernie views defending the openness and neutrality of the internet as vital to small businesses so they have the same opportunities as multinational corporations to build their businesses and to access customers.
Visa Reform: Bernie supports reforming the H-1B visa program, which brings highly skilled foreign workers into the U.S., in a way that meets the needs of businesses who want to attract and retain the most talented foreign workers. These reforms include protecting the rights of foreign workers and ensuring that visas aren’t granted to fill jobs that could be filled by American workers.
Supporting Small Businesses
Bernie believes that small businesses are essential for America’s economy to thrive. In order to succeed, small businesses 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 to improve and grow their businesses. With low interest rates on these loans, businesses can 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.
When credit became less available to create and support small businesses, fewer new business were created while large businesses aggregated through mergers and acquisitions.
The removal of banking regulations was one of the main factors that lead to the 2008 financial crisis. Learn more about Glass-Steagall, as well as why Bernie wants to reinstate it, by reading the Financial Regulation issue page.
How has Bernie acted to support small businesses?
Bernie voted against the Bankruptcy Prevention and Consumer Protection Act of 2005, that made it more difficult for low-income people and entrepreneurs to discharge debt from credit card companies. And during the Great Recession Bernie insisted:
“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. Leveling the rates would allow small businesses to finance their own growth. It would also create an incentive for investors to invest in domestic small businesses. This would result in more growth in the domestic economy instead of making investments overseas with 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 $12 billion in tax relief to small businesses across the United States and an additional $30 billion in capital for small businesses during the 2010 economic crisis.
In May, Bernie and Representative Alexandria Ocasio-Cortez of New York unveiled the Loan Shark Prevention Act. This legislation would cap interest rates for consumer loans and credit cards at 15%. With lower interest rates, entrepreneurs and small business owners would have better access to the credit they need to build and grow their companies.
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 supports 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. Bernie supports several measures that will help improve access to education, such as universal childcare and pre-kindergarten, as well as his plans for tuition-free public colleges and universities, and curbing student loan debt that increasingly burdens the young adult population. 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 intellectual property rights and to prevent their innovations from being copied by competitors. Unfortunately, this system is being abused in several ways by large corporations.
Bernie recognizes that in some industries, the way the patent system is structured sometimes stifles innovation. Bernie has proposed a solution to the abuses of the patent system by the pharmaceutical industry.
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 of patent protection, the patent system is plagued with problems that negatively impact businesses.
Give me an example?
In the pharmaceutical industry, much of the 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 Organization 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 patent reform legislation designed to drastically reduce drug prices and incentivize the pharmaceutical industry to focus on innovation rather than “me-too” drugs.
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.
In 2018, Bernie Sanders and Ro Khanna introduced legislation that would, among many other things, strip a drug manufacturer of its patent if the drug was ruled to be “excessively priced.”
(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. Bernie believes we have to close the digital gap, not expand it.
Net neutrality is essential for innovation, building and growing small businesses, and allowing unimpeded access to customers. Net neutrality, in addition, assists rural small businesses, so the telecommunications industry cannot engage in practices that restrict rural Internet access or hinder its development. As President, Bernie will invest in the infrastructure for the construction and expansion of rural broadband outlets, that will spur competition among internet services providers in these communities.
How does net neutrality affect small businesses?
Without net neutrality policies, small businesses could be subject to increased costs to supply content to consumers, to access information, and to reach customers. 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’s record and proposed policies on net neutrality and other digital rights here.
Bernie supports reforming the way we bring workers into the United States on H-1B visas. Bernie’s main concern is ensuring that workers aren’t being exploited by businesses who want to attract and retain the most talented foreign workers. He also wants to make sure that visas aren’t being granted to fill jobs that could be filled by qualified 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 to permit companies to bring highly-skilled workers to the United States to do work for American companies in roles that can’t be done 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 simultaneously protecting American workers.
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.