Congressman Jeff Fortenberry

Representing the 1st District of Nebraska

Fort Report: Entrepreneurial Prairie

Sep 30, 2017
Fort Report

During one of my telephone town hall conversations, a woman on the line told a story. She and her husband desired to start their own architectural firm. Starting a business is a lift under any circumstance. Many persons dream of it—and that’s good. But it’s hard, and there must be a convergence of variables for success. It takes start-up capital, a sellable good, hard work, patience, and perspiration. In this case, there was another hurdle: Buying healthcare with a sickness in the family meant a $30,000 per year upfront cost before any service was sold. It was too high—so, for now, they couldn’t start.

This week, the insurance carrier Medica announced that it will offer insurance on the Nebraska health care exchange at a 31% average increase, while another business provider told me that their rates will not increase at all. Wild differences in the individual versus commercial healthcare markets have become the norm and are contributing to the slowing of entrepreneurial momentum. If we want jobs, if we want a healthy economy, if we want creative and imaginative opportunity, the right type of tax policy, health policy, regulatory approach—and even education policy—should be measured as to how they can positively affect small business.

Recent statistics show increases in job growth in many areas of the country. Though 50% of Americans work in small business (an enterprise of less than 500 employees), the trend in small business formation remains downward. While there has been some recent improvements in small firm “birth/death” ratios, data from the Census Bureau indicate there were only 403,902 startup firms in 2014 compared to 391,553 business “deaths.” The number of startups in 2014 declined by more than 150,000 compared to 2006, a drop of almost 28 percent.

Just as important, dramatic growth in wages and entrepreneurial talent has been concentrated in a few tech clusters, masking economic decline in vast swaths of America. A concentration of wealth and talent can correlate with a concentration of power. In rarified confines, mutually reinforcing networks of money and influence enable the absorption of taxes and regulation, and even benefit from them. Higher profits and wages more than compensate for the cost of living (let alone private jet trips to Burning Man—for tech elites anyway).

So, how do we create the conditions for the entrepreneurial genome to manifest everywhere, not just in a precious few areas of the nation? Congress is readying to have a very large debate about taxes. In a rare congressional “tax retreat” this week, one clearly stated goal was to create a tax system favorable to small business. Returning to the problem of escalating health care costs, I injected the idea of more flexible risk-sharing through cooperatives, groups, or unions—perhaps combined with the backstop of government reinsurance—to equalize the playing field in the health insurance market.

We also need to understand and codify the complexities of how entrepreneurship is kindled and maintained. While we readily measure intellectual and athletic acumen, identifying entrepreneurial talent early can help move young people onto the glide path of entrepreneurial reality. Right now, the convergence of factors is just random.

So, here’s the future. Sam is an intern in my office. She’s in college, where she is studying criminal justice and prelaw. She also owns 25 head of cattle. She raises and sells her cattle to support her education. I don’t know what Sam’s future holds. Perhaps, like many young people, she will leave to see the bright lights in those aforementioned enclaves, which are a special part of America. And then, one day, she might return, to become the future of the Entrepreneurial Prairie.