[Congressional Record Volume 144, Number 71 (Thursday, June 4, 1998)]
[Senate]
[Pages S5656-S5657]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      NATIONAL SMALL BUSINESS WEEK

 Mr. ABRAHAM. Mr. President, I rise today to mark National 
Small Business Week. This is the week when we honor, as we have for the 
past 35 years, the American entrepreneurs who have done so much to make 
ours a prosperous, thriving nation. America's 23 million small 
businesses employ more than half our country's private work force, 
create two of every three new jobs, and generate a majority of American 
innovations.
  Mr. President, it would be impossible to exaggerate the contribution 
of small business to America's economy. Small business is our engine of 
economic growth. Small business-dominated industries produced an 
estimated 64 percent of the 2.5 million new jobs created during 1996. 
Small businesses also account for 28 percent of jobs in high technology 
sectors--the sectors of our economy pushing us into the future and 
keeping us competitive in world markets.
  Small businesses also serve as the training ground for America's 
workforce, providing 67 percent of workers with their first jobs and 
initial on the job training in basic skills.
  Small business is especially important in my own state of Michigan, 
where almost half a million small businesses and sole proprietors 
created every net new job in our economy from 1992 to 1996.
  How did Michigan's small businesses accomplish this? Ask Pamela 
Aguirre of Mexican Industries in Michigan and Cheryl Hughes of C&D 
Hughes. Both these women are being honored by the Small Business 
Administration for their efforts in expanding their small businesses 
against great odds through hard work, perseverance and devotion to 
quality.
  Ms. Aguirre has taken the eight employee leather and soft trim 
automotive products manufacturer she inherited from her father and 
turned it into a 1,500 employee eight plant corporation with 1996 sales 
of $158 million. Her company had plants in Detroit empowerment zones 
before they were empowerment zones. Hundreds of local residents have 
found training, skills and careers thanks to her.
  Cheryl Hughes started running her highway construction company in 
1980 out of her home. Now, after weathering reductions in federal 
highway funding, C&D Hughes employs 60 people, has achieved annual 
sales of over $7 million, and is recognized as one of the fastest 
growing privately held companies in Michigan.
  Entrepreneurs like Pamela Aguirre and Cheryl Hughes deserve our 
respect, Mr. President. Their efforts make their communities and our 
nation better and more prosperous. By providing jobs they help people 
learn skills and build lives for themselves and for their families.
  But they also need our help. If small business owners like Pamela 
Aguirre and Cheryl Hughes are to continue to grow and to provide good 
jobs to millions of Americans, they must be freed from excessive 
federal regulations and mandates, and from frivolous lawsuits that 
drive up the cost of insurance and can drive a small business owner 
into bankruptcy.
  For example, Mr. President, current regulatory costs are staggering--
$647 billion in 1994 according to the General Accounting Office. Our 
small businesses cannot afford to bear this kind of burden. What is 
more, many small companies refuse to grow because doing so would 
subject them to a number of costly, unnecessary regulations.
  The answer, in my view, is real-world cost benefit analysis. No one 
wants to put our families and children at risk from unsafe products or 
procedures. But the federal government must implement strict policies 
seeing to it that scientific data is used to determine whether any 
proposed regulation will cause more harm than good--to people, to the 
economy and to small business.
  In addition, Mr. President, Washington too often imposes unfunded 
mandates on America's job creators. The benefits of government programs 
are there for all to see. But the costs imposed by these programs on 
workers, consumers, and small businesses are not so clear. Reduced 
wages, increased prices and stagnant growth all can result from 
unfunded federal mandates. That is why I believe it is crucial that we 
institute mandate reform legislation that would direct the 
Congressional Budget Office to study the effects of proposed private 
sector mandates on workers, consumers and economic growth, and provide 
a point of order allowing members to call Congress' attention to these 
costs.
  Finally, Mr. President, entrepreneurs increasingly are being forced 
out of business, or deciding not to go into business for themselves, 
out of fear of lawsuits. One recent Gallup poll reported that fear of 
litigation has caused 20 percent of small businesses not to hire more 
employees, expand their business, or introduce new products. And that 
figure does not include those who have decided not to go into business 
at all.
  The culprit is the frivolous lawsuit. The stories are well-known: A 
Northridge, California woman claims damages from a store after she 
pulled out the bottom box in a blender display stack and brought it 
down on her. A former smoker in Seattle sues a supermarket and 
Washington dairy farmers for failing to warn him that a lifetime of 
drinking whole milk might clog his arteries and cause him to have a 
heart attack. A teenager in Nashau, New Hampshire sues the manufacturer 
of a basketball net after he attempts a slam dunk and looses two teeth 
when they get caught in the net.
  We must put a stop to this lawsuit abuse before it stifles our 
economic growth, innovation and entrepreneurial spirit. Ideally, we 
would pass legislation discouraging all frivolous lawsuits. 
Unfortunately, while we have tried several times to enact broad-based 
legal reform, the President has successfully opposed it. That is why I 
have sponsored the ``small business lawsuit abuse protection act.'' For 
small businesses, this legislation will limit the punitive damages that 
can be awarded against the company. Punitive damages would be available 
only if the injured party proves convincingly that the harm was caused 
by the small business through at least a conscious, flagrant 
indifference to the rights and safety of others. And punitive damages 
would be limited to the lesser of

[[Page S5657]]

$250,000 or two times the compensatory damages awarded for the harm.
  The bill also would limit joint and several liability for small 
businesses. This doctrine, according to which a company that caused, 
say, two percent of the harm could be held liable for the full amount 
of damages, has forced many companies related to an accident 
tangentially if at all (including, for example, Mr. Van de Putte) to 
pay the entire amount of the settlement because others are bankrupt or 
otherwise not subject to being sued. Under this legislation a small 
business would be liable for pain and suffering and any other 
noneconomic damages only in proportion to its responsibility for 
causing the harm. They would still be fully, jointly and severally 
liable for economic damages.
  For the sake of our small businesses, and for the sake of the 
millions of Americans who rely on those small businesses for goods, 
services, training and jobs, we must address the costs Washington and 
our broken civil justice system impose on entrepreneurial activity and 
business growth. It is my hope that National Small Business Week will 
provide all of us with the opportunity to reflect on the tremendous 
debt we owe the entrepreneurs of our country and that we will do our 
best to encourage them to continue making life better for all 
Americans.

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