The Issues: Small Businesses

(CBS)  CBS News continues a month-long series titled "What Does It Mean To You?" focused on where the presidential candidates stand on major issues and how a vote for one or the other candidate might affect average people's lives.
In this report, CBS News Correspondent Anthony Mason takes a look at the problems faced by small businesses, and what President Bush and Democratic rival John Kerry propose to help them.

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Operating her own small business in Brooklyn has been a struggle for Dawn Ladd. Ladd's company, Aurora Lampworks, restores historic light fixtures. She has seven employees.

"I wonder about that sometimes myself," she said with a laugh when asked about making a business out of restoring old fixtures.

Especially with the soaring cost of employee health benefits. In just the past three years, "It's gone up a good 40 percent," she said.

Ladd faced a tough choice, she either had to either fire some workers or cut out their benefits.

"I feel really upset by it," she said of her decision to eliminate benefits.

But among small businesses like Ladd's, only 55 percent now provide health care benefits while 98 percent of big companies do.

That puts them at a competitive disadvantage. And that's why the nearly six million small business owners now rank rising health care costs as their number one concern.

"If they're required to pay double-digit health care premiums on an annual basis, it reduces their ability to make additional hires, make capital investments," said Bill Miller of the U.S. Chamber of Commerce

So if Dawn Ladd could talk to the presidential candidates, "I would ask them, 'How are you gonna help the small business?'" she said.

President Bush's solution is to allow small businesses to join together in "associations" to purchase health coverage at lower rates.

The president would also expand health savings accounts, which allow workers to put aside money tax free to cover medical expenses.

"I would urge every small business to look at a health savings account," Mr. Bush has said.

Sen. John Kerry is also making small businesses a priority. He'd offer a tax credit for up to 50 percent of the cost of employee coverage. Kerry would also allow small companies to buy into the federal employee plan, saving, he says, about 15 percent on premiums.

Either plan could help Dawn Ladd restore coverage for her employees.

"Insurance is a really big burden," she said.

Small businesses like hers create most of the new jobs in America. But Ladd said health care costs were holding back her company and the economy.