friday morning, foundations for the defense of democracy discussed the state of iran's nuclear program and recent publications as g-7 leaders gathered this weekend. -- provocations as g-7 leaders gather this weekend. talking about mental health in the u.s. and suggestions better screening would prevent gun violence. alliance for market solutions on to talk about support amongst conservatives for a revenue neutral carbon tax. watch c-span's washington easternlive at 7:00 friday morning. join the discussion. pedro: this is brad close of the national federation of independent businesses. he serves as the senior vice president for public policy and advocacy. here to talk about small business in united states. good morning. brad: good morning. pedro: it is obvious, but who is your average person you represent when it comes to small business? brad: that is a good question.

nfib is unique. we represent the little guy. small businesses and independent business owners. our average member has five to 10 employees. they are very small. they are in all industries and all over america. one of the key things about nfib is you have to be an independent business owner. we have no publicly traded companies at all. we are truly a member-driven organization. we were created 75 years ago under the principle and the guiding -- the guide of one member, one vote, and we follow that today. members every year vote their ballot at the federal and state level and they set policy for nfib. we don't sit in a room in d.c. and decide what is good for small business. they tell us and we take that to the state capitals and the hill 50 to lobby on their behalf. pedro: when it comes to going to the hill what is the main , message you delivered at the white house if you have that kind of relationship? brad: one things most policymakers don't understand is that small business makes up half of our economy and half the job growth. reminding them how important small business is to the well-being of the country, to employment, growth and all of

that and then reminding them that small businesses are different. they are small, they are mom-and-pop, they are family-run. they are in smaller communities. having a one-size-fits-all policy from washington that may be great for large corporations can actually do a lot of harm to small businesses. pedro: will that apply to the tax cut recently? brad: that is a great point. we started out that debate pushing congress and the white house to make sure they did not forget about small businesses. we heard a lot of talk about cutting corporate rates, cutting overseas rates. half the economy is small businesses and most of those business owners are not incorporated. they don't pay the corporate rate. they pay their taxes through the individual tax returns. making them realize they need to look at small businesses separate from large corporations, we got there and we got a 20% small business deduction created and individual rates came down. we had some kind of equanimity and fair rates between the two sides. pedro: the larger one clearly got the advantage. brad: we think, especially in that it is permanent.

corporations went from a 35% to a 21% rate. good public policy, we don't have a problem with that, but it was made permanent. whereas the small business tax cuts on the individual side were not made permanent. they expire at the end of 2025. they have to be renewed. our biggest legislative priority right now is getting congress to realize that these provisions can expire. they need to be made permanent. pedro: what happens to the average business if is not made permanent? give me an example. brad: the rates will reset. so they are going to see anywhere from probably a 10% to 15% increase in their individual rates. they will lose the 20% deduction which right now is allowing small business owners to keep more money in the business rather than sending their money to washington. significant tax increases will happen. pedro: this administration made a big deal about regulation, at least reducing the amount of regulation. does small business see that? brad: they do. there are two main areas we have seen it benefit. one has been the tax bill and the other is the regulatory or deregulatory agenda.

we think those two, those two issue areas are what is driving the small business economy right now. when we came towards the end of 2016, small business optimism picked up very high. right? we started hitting higher records, but it was based on soft economic numbers like hope and optimism. we think things are going to get better. after some of the regulations got rolled back, and specifically after the tax bill was signed, we saw a change in that economic index and how our members reacted. we saw high numbers but it was hard economic numbers. they were investing in business they were hiring, they were , paying more, sales were up, inventory was up. they were growing and buying new equipment. we have seen a change based on those areas at the small business level. pedro: we will talk more about the state of small business with our guest. if you want to ask questions, you can do so. if you live in the eastern and central time zones, (202) 748-8000. if you live in the mountain and pacific time zones, (202) 748-8001. if you're a small business owner and you have a question for our guest, it is (202) 748-8002.

you can make thoughts on our facebook page and twitter feed. the previous segment featured an about themoody talked state of small business. i want to review the quote. "job growth healthy but slowing. small businesses are suffering from the brunt of the slowdown. hampering job growth, labor shortages, layoffs in brick-and-mortar and fallout from weaker global trade." would you agree? brad: we are not seeing that it -- that at all. when you look at wall street and the market going up, it can be very chaotic. the small business economy is thriving. when you look at it on a pure size basis, it is the number three economy in the world behind the u.s. overall economy and china. they are doing really well. the numbers are great. for over two years, our monthly economic index has been at beend levels, and it has record levels as businesses are growing. they are hiring, paying more inventories buying more , equipment. they feel things are going well so we would not agree with that sentiment. pedro: what do you attribute that growth to? brad: the economic climate has

been great. the tax cut bill was phenomenal for them, and they feel that washington is getting out of their way finally. that would be the deregulation agenda. but they have a lot of pent up economic growth demand. they are doing it right now and they are really happy. pedro: when he was on just recently, one person said an issue was large businesses, especially corporate retailers like amazon and walmart. what has been the competition like and what has been the response of the small businesses to be competitive? brad: small business owners, their biggest problem right now is finding qualified workers. it is what you are seeing for all businesses. that is their biggest impediment to growth. it is not regulations. it is not taxes or government policy. larger businesses have other things they care about. maybe overseas issues, taxation issues from overseas. our members, five to 10 employees, they are in every industry. they are mom-and-pop grocery stores, auto mechanics, farmers, small construction shops, small doctors practices they are doing

, well. pedro: to what degree are they getting squeezed up by larger retailers? brad: it depends where you are. if you are in a bigger city larger retailers definitely , would have an impact. when a big box store moves in that can hurt local retailers for sure. the internet has helped. more and more small businesses are selling their goods on the internet. not primarily but they have added that and that has helped when they have lost some sales to larger retailers. pedro: our guest with us until 9:30. the lines are available if you want to call. we will start with the calls. chris in florida. chris, you are on with our guest brad close of the national , federation of independent businesses. caller: good morning. i would like to make a comment. i have owned the business for 20 years. my husband was in manufacturing. he continues to be a consultant after the plant closed in indiana. i have a unique perspective in that i was the chairwoman for my

husband's job. most people in small business have a tremendous burden on them also social security. -- burden on them when it comes to health care also social security. when you are a large company you , pay 7% social security. when you're an independent contractor, you pay 15%. own healthy for your insurance. and as you age, if you've had anything happen to you in the past 10 years, you are going to have a pre-existing condition. you are looking at approximately $2000 per month for family. ok, and that is two people. that is my first comment. my second comment is to the last guest, the reality of the country, and that is that globalization is detrimental to this country. pedro: we will leave it there because you are referencing the last guest. brad: you brought up a good point on payroll taxes. what most people don't realize is employers pay half the federal fica taxes.

they pay 7.6%. and then employees pay the other 7.6%. if you are self-employed you, as an independent contractor, so proprietor, you pay the whole thing. twice the tax, 15.4%. that is on top of your individual tax rates any other , local or state taxes. it's a significant burden on small proprietors who are self-employed. ones: how do generally the you were present deal with health care and provide to their employees? brad: health care is our number one issue in our surveys going back 20, 30 years. it is the most expensive benefit, the most extensive -- expensive things business owners need for themselves and their employees. it is very hard. one of the we have looked at is things we have looked at is how do you make it easier for them to get policies? one of the things that has come out in the last two years was an extension of the short-term health care plan. under obamacare these were curled back -- curtailed significantly. the current administration has allowed those to continue for three years.

we find more and more small business owners are buying short-term health care policies to get them through two or three years as they get ready to fight something different. health care is the most significant cost driver outside of running your business on a business -- monthly basis for small business owners. pedro: from houston, roberto is next. caller: yes. i would like to tie-in something not shared in the last segment that was related to small business. it is regarding to the banks belly up or about to belly up. do business accounts have more protection than the rest of us? we just have $250,000 protected. we have more than that, we are going to lose it. the lady put it in terms of, are we going to bail them out? the answer is no. if we don't we will lose our , money. they are also concerned about their health but also their money in the bank. so what -- do you all have more coverage than we do, the regular

people do, or are you in the same boat we are in? brad: on credit, one of the things we have seen for years, especially since the big recession in 2008 and 2009 is that small businesses by and large are not interested in taking on new debt. what happened in the recession as wall street kind of cratered, a lot of the big banks started shedding smaller accounts. a lot of those happened to be small business accounts. we heard from thousands who lost their line of credit, their loans for no problem. they were perfectly a rated credit. they lost them because the banks did not want that small business anymore. it shapes how they look at debt and credit going forward. and the vast majority of small businesses right now don't want to take out new debt. they don't credit and they are perfectly happy with their credit needs right now. a lot of that is a reflection of what they went through 10 years ago. pedro: we have a small business administration. how is it performing for small businesses? brad: they provide a loan

program. it can be very bureaucratic to get those loans. 7a loan program. a lot of businesses use them. by and large only about 2% to 3% of members actually access those programs. usually they tell us they don't access them because of the paperwork, the regulations. how hard it is to get them. most small businesses when they are starting out, they just max out a bunch of credit cards. that is how they get started. borrow from their friends, borrow from their friends or their 401(k). that is how they get started, and they try not to accumulate debt after that. pedro: eric in maryland. go ahead. caller: good morning, gentlemen. i wanted to make a comment. i'm pleased to hear this segment come on. he painted a grim picture today. i live in maryland. i'm in the small business office. i've heard there is a record number of new registrations for small businesses. i wanted to say it is good to hear, refreshing to hear the

truth right now being discussed in the overall health of small business in this country. thank you. brad: this is where, you know more than half the jobs are , created and where the economic opportunity is for folks. especially after the recession people realized they needed to , go into business for themselves. either as an independent contractor or start their own business with employees. it is a significant driver for the economy. our numbers for the last two years have been phenomenal. our monthly economic index is looked at by the fed every month, it is looked at by wall street by banks. , they quote the numbers. we have been charting the economy quarterly and monthly since the early 1970's. and they are showing record high areas in lots of areas. i appreciate we are hearing first-hand from an owner in maryland who is seeing the positive growth. pedro: several presidential candidates have the desire for a $15 minimum wage. what is your reaction? brad: minimum wage is a tough issue. small business owners really care about employees and want

them to get ahead. they small business is by definition a family business. right? small business owners want to see them get paid well and see their employees succeed. unlike large businesses, small businesses work shoulder and shoulder with their employees day in and day out. right now in america most small , businesses pay over the current federal minimum wage. but when you look at increasing it to $15, that is almost doubling it and too much for them. pedro: a representative talked about her city of seattle imposing a $15 minimum wage and the effect it has. we want to hear her comments. get your reaction to it. [video clip] >> this is a big day. today we passed the first minimum wage increase for workers in decades. yes, i am proud to represent seattle, a leader in the fight for 15. i served on the committee that drafted the legislation that passed ultimately. it has been four years since seattle raised the wage. and i want to tell my colleagues across the aisle what that increase has been. seattle is flourishing.

today we have one of the lowest unemployment rates in the country. and jobs are growing steadily. last year, forbes ranked seattle the number one best place for business and careers in 2018. and despite the doom and gloom predictions from the national restaurant association when we passed the bill, what we have seen what the seattle times -- is what the seattle times called a crazy restaurant boom. new jobs created every year. the most recent and credible research shows low-wage worker went up without any negative impact on employment. local food prices remain constant so that families can better afford to buy healthy food. when we increased the minimum wage in seattle, we got strong businesses, healthy families and flourishing communities. all american workers deserve the same thing. raise the wage today. pedro: that is one city's

perspective. brad: we opposed that minimum wage increase in seattle. it was raised to $15. our economic modeling showed it would result in significant job loss. and then economic hit the small businesses. a couple of years ago after it went into effect, the university of washington did a study because the state government asked them to do a follow-up. they came up with the same results we said would happen. what was interesting is when the results came out that showed job loss and economic hit, the state government decided to deep six the study did not use it. but it confirmed our research that minimum wage has unintended consequences. it does cost jobs. it does cost economic growth. pedro: she gave a glowing presentation as far as the effect. brad: that is right. a lot of what she had to talk about has nothing to do with the $15 minimum wage. you have some massive companies in seattle which are driving growth which is a great thing in providing high-paying jobs. the minimum-wage jobs in seattle-tacoma, lots of them are for very small businesses. they did not have the revenue to pay that much. it is much like a household budget. you have to have the revenue

coming in to either create a new job or pay for an increase like that and if you don't have it, you are left with a lot of bad choices raise your prices which , most small businesses cannot afford to do because of competition cut back on benefits , which they don't like to do, cut back on hours or eliminate jobs and that is what has happened in seattle-tacoma. pedro: brad close of the national federation of independent businesses. their senior vice president for public policy and advocacy. thomas is next. thomas is in humboldt texas. , caller: good morning, america. boom, bust and bailout. here we go again. is this trump's economy finally? yes or no. pedro: since we have a guest here, what do you want to ask about? caller: small businesses in houston or in texas, the minimum wage is $7.50.

might be eight dollars. i want to know, brad would you , work for that? thank you. brad: when i was starting out, yes. a lot of what small businesses pay, when they pay minimum wage is a training wage. , a new person entering into the workforce. most minimum-wage workers are folks starting out and learning new skills. for a small business, having to $7.50 to $ing 750 -- 8 depending over they are to $15 means the entry-level jobs probably are not going to exist to the extent they would today. pedro: lorraine from ithaca, new york. lorraine in ithaca, new york. hello? caller: good morning. my question is what specific regulations can you name that some of those that have been kind of rolled back? and which businesses have benefited most from those regulatory cutbacks? which kinds and classes of small businesses have benefited the most? what are some of those specific cuts?

thank you. brad: sure. we have seen some rollbacks in key areas that impacted the agricultural community on the waters of the u.s. rule. that has been halted. this is something that would've created navigable waterways for parts on your property that help -- held water seasonably but not year-round. anything from a drainage ditch or whatever would involve the federal epa. folks in the act community -- ag community farming community were , upset about that. that has been halted. another big one has been the overtime rule, which was passed during the previous administration that would have more than doubled the amount of employee pay that was subject to overtime. it raised it to such a threshold that it was very hard for small businesses to compete. that has been scaled back. we are waiting for a final rule from the administration. we don't know what it will be, but we anticipate that overtime rule that splits the difference between what the previous admin -- administration had and what went before. pedro: columbia, maryland.

hello. caller: hello. surprise, surprise. another dc think tank guy is telling us we can't have nice things. and $7.25 is not a wage that anybody can survive on in most places across america. we are trying to get away from this place where folks have to patch together two and three jobs in order to survive. the last point is about health care when it comes to small businesses. it is, just as you said very , difficult to get a policy as a small business owner. medicare for all would take that stress off of small business owners where health care is provided to everyone as a right. you think about -- you know, when i think about america being great, i think about how he -- we responded to wars in times of need. i mean the military stepped up. ,but also a big part of military

service was our doctors and nurses who aided veterans coming home and aided our veterans while they were out on the battlefield. we need to have that same mentality in terms of honoring doctors and nurses and bringing them up and having medicare for all being part of just the fabric of america. the same way the military is part of the fabric of america. pedro: got you, caller, thanks. brad: we have been pulling on health care for decades. they definitely are concerned with costs. what is the cost? not what more benefits i'm going to get but the cost of insurance. they have been strongly opposed here, isbefore i came a government run health care program. something we did not support in 2009 and 2010. we pushed back on the republican option because our members told us that. one of the great things about our organization is our members that the policy.

we ask questions on policy issues and they tell us what they like and what they don't. we are charged -- our teams, we have a state director in every state and an office in d.c., we are charged with taking their instructions to capitol hill and the state capitals to either 50 oppose or support something based on what they tell us to do. that is what we do. pedro: we have seen administrations promote opportunity zones across the opportunity zones across the united states. how do small businesses benefit? brad: we have not heard much from our members on that. it was something talked about in the tax bill. it is not something our members have told us impacted them one way or another. just not something we have seen. pedro: rodney in greenbelt, maryland. a small business owner. caller: thank you for letting me on. i want to comment about the >> this out -- besides thanking you all, the summary