Social Security cuts would hurt small business

March 29, 2013
John Darling

So says Main Street Alliance's Mark Kellenbeck, who will speak at a small business conference Saturday in Medford

Some 40 percent of small business owners who are near retirement age are reeling from the economic crash and would suffer from proposed cuts to Social Security and Medicare, according to a study by Main Street Alliance of Oregon.

"It's a crisis for small business as we start to come out of the recession," says Mark Kellenbeck, of Medford, co-chairman of Main Street Alliance and co-owner of BrainJoy, a "brainwave optimization" company.

"Something has to be done. We clearly need to extend the social options for retirement, not cut them," says Kellenback, who will speak at a Main Street Alliance conference at 9:30 a.m. Saturday at the Medford library.

The study shows a fourth of rural Oregonians, including Jackson County residents, receive Social Security, compared with 17 percent of nonrural communities. It shows 10 percent of total personal income in the state's 24 rural counties comes from Social Security, compared with 6 percent in the 10 nonrural counties.

A 3 percent cut in the program would pull $281 million out of the state's economy, while a similar cut in Medicare would whack Oregon's economy by $149 million, it said.

"These safety nets are important to small business," says Kellenback. "Rural economies depend on Social Security a lot. Forty percent of corporate employees have pensions but 30 percent or less of small businesses have pensions for themselves or employees."

Instead of looking for ways to cut social programs, Congress should be closing offshore tax loopholes, Kellenback says.

Kellenback will explain Main Street Alliance's support for House Bill 3436, which would create a state Retirement Savings Investment Board to develop recommendations for setting up a state Secure Retirement Plan.

The state treasurer and members from small business, labor and the insurance industry would draw up plans for the public to invest through voluntary "pooled individual retirement accounts," thus lowering costs to participants, the bill says. It could be administered by a state board or a contractor.

"Small business could then offer it to employees as an option to fund retirement," says Stephen Michael, small business organizer for Main Street Alliance, in a phone interview. The bill has already had one House hearing and is supported by a wide range of interests, he adds.

The report by Main Street Alliance and Social Security Works concludes that cuts in social programs would not happen in isolation but would be "devastating" to small business by depressing demand of consumers who shop there.

"The recession has weakened retirement security for many small businesses," Michael said, "including more than half of business owners for whom a majority of their nest egg is tied to their business."

Kellenback also will discuss how small businesses would be helped by a constitutional amendment to reverse the Supreme Court's Citizens United decision, which gives corporations the same free speech rights as individuals. Opponents of the ruling say that has given corporations, through their political contributions, excessive power in affecting public policy.

He said polling shows three-fourths of small business people favor reversing that policy. At the Saturday conference, Kellenback will discuss how Move to Amend, Jackson County is working to change the court ruling.

These goals, he notes, are not allied with any political party and are "trans-partisan."

John Darling is a freelance writer living in Ashland. Email him at jdarling [at]

Groups audience: 

- Private group -