Nov
2
2010

Of the more than 7,300 state legislators serving throughout the United States, only 21 (0.3%) are veterinarians. Representation in the U.S. Congress is only slightly better, with two DVMs currently serving (0.4%). But there are plenty of issues that have the potential to affect veterinarians, especially in their role as small business owners.

In advance of Election Day next Tuesday, NEWStat asked the two veterinarians serving in Congress: Rep. Kurt Schrader (D-Ore.); Sen. John Ensign (R-Nev.); and former Republican senator from Colorado Wayne Allard, DVM, to weigh in on the current election cycle. We asked them what they think are the main issues that will impact veterinarians and practice owners, and what kinds of changes might occur this election that could affect practice owners.

Rep. Kurt Schrader, DVM (D-Ore.)

What do you see as the main legislative issues that will have the most impact on veterinary practices owners or veterinarians in general?
 
The recently passed and signed small business jobs act could be a help to lots of veterinary clinics.
 
I actually introduced and passed a big part of the bill on a bipartisan vote late last year. It has small business tax credits so we can write off more of our investments immediately. It has Small Business Administration 90-percent small business loan guarantees and fee remissions to encourage banks to loan to us and spread their risk.
 
You can refinance your commercial real estate loan through them if you are having trouble too. And it also creates a small business lending fund for smaller community banks to give them additional lending capital that can only be used for lending to small businesses at great rates for you and them.
 All veterinary clinics should see if they qualify for the small business health care tax credits available to those with payrolls averaging $25,000-40,000 per employee. And there is a chance that some of our veterinary workforce issues might get addressed, too.

What types of changes could occur this election cycle that would be either good or bad for veterinary practice owners?
Hopefully, after the election cycle there will be less posturing and more bipartisanship to help our country move forward. It is equally or more likely that partisanship gets worse as moderate common sense business types are purged from their respective parties.

Are you planning to pursue any legislation that would be beneficial to practice owners, in terms of health care, job creation, small business initiatives, or anything else?
 
Having my veterinary experience, starting my clinic from scratch, and meeting a payroll for over 30 years gives me a certain respect and ability to make a difference at least so far.
 
I am planning to work on small business issues such as: tax simplification, fix the 1099 goods over $600 reporting problem in the health care bill (has bipartisan support), make sure the small business tax credits and loan guarantees are available for the next several years as we dig out, the estate tax issue is settled (House voted on already so just requires Senate action), and make veterinary school more affordable and attractive especially in rural areas so that new graduates have realistic expectations of what they might earn when they get out and have a better start in life.
 
The main emphasis should be on doing what we can to make it easier for small businesses to keep their doors open and grow. As people have more disposable income veterinary businesses will then prosper. So, I hope we deal with some of our economic and transportation infrastructure issues to put blue and white collar folks to work now. I also feel that exports to Asia with fairer trade and getting China and the European Union to play by the rules would be a big boost to our economy. And the good thing about narrow majorities on either side is that we are less likely to have major policy changes so there will be more certainty in the system which all businesses like.
 

Sen. John Ensign, DVM (R-Nev.)

Veterinarians, like other small business owners, are struggling to keep their practices afloat in this economy.

In order to get our small businesses back in the business of creating jobs, Washington needs to foster an environment that allows the private sector to thrive. Getting the federal government out of the way of small business and lowering the tax burden on this group, along with drastic cuts in wasteful government spending, is how we begin to repair our economy.

This election cycle really is a referendum on Washingtons grotesque spending habits and the burdensome taxes that will be needed to pay for these spending levels. Electing people into office that recognize the important role that small business plays in our economy is the first step in turning our country around.

(Note: Ensign was asked the same questions as the others, but issued a statement instead of responding to each individual question.)
 
 
Wayne Allard, DVM
(former Republican senator from Colorado)

What do you see as the main legislative issues that will have the most impact on veterinary practices owners or veterinarians in general?

As the record of this administration unfolds it has become obvious that it has no concept of free markets and what makes them work to the advantage of the consumer. Ignoring the expiration of a number of tax reductions that were put in place after the terrorist attacks within the borders of America is a serious flaw in this administrations efforts to stimulate the economy. I will mention two which are very important to veterinary practices.

· There is an expensing provision in place set to expire in 2011 that allows small businesses like veterinary practices to write off equipment purchases up to $125,000 adjusted to inflation in one year. This encourages the purchase of items like mobile hospitals and trucks, x-ray machines, laboratory equipment, animal cages, surgery tables, etc., and reduces the cost of purchasing equipment by allowing the veterinarian to write-off the costs in one year. This reduces your taxable income in that year.

At the time of enactment of this provision I was sitting on the banking committee and Alan Greenspan, Chairman of the Federal Reserve, was testifying before the banking committee. I asked him the consequences of the "expensing provision" and he responded by saying that this provision alone did more than anything else to stimulate the economy because small business is where our economic growth occurs with a favorable tax policy.

· In the Health Care Reform Bill there is provision that will require veterinarians in practice to fill out an IRS 1099 form every time the charges are greater than $600. This will dramatically boost the cost of compliance by veterinary hospitals. Some experts are suggesting it will proportionally impact small businesses three times as much as larger firms. This will drive new computer software purchases during a time when the "expensing provisions" are expiring.

I do not see how the new Congress will be able to ignore these two provisions and I suspect there will be veto threats from this administration.

What types of changes could occur this election cycle that would be either good or bad for veterinary practice (small business) owners?

This is going to be an election year favorable to Republicans. It appears that Republicans are poised to gain a majority in gubernatorial races, to build up their numbers is state legislatures, and to gain a majority in the U.S. House of Representatives. They will gain numbers in the U.S. Senate. Control of this body is a stretch, but possible. Any efforts to reform policies enacted by this Congress and the administration will be difficult to change because of the filibuster rule in the U.S. Senate. If there is another Republican year in 2012 then two-thirds of the Senate would have had to stand for reelection making it easier to change policies enacted in the last two years.

Gaining a 60-vote margin by any party creating a filibuster-proof senate, such as was enjoyed by the Democrats in this Congress, is rare. You have to go back to 1937 since any president has enjoyed such a majority in the U.S. Senate.

This will be on the minds of many members of Congress and the President.

Republicans are more likely to turn to market-driven approaches to stimulate the economy which will serve a majority of the small business sector favorably including veterinary practices.

There will be more interest in balancing the budget. In the Senate the budget staff does not weigh tax decrease favorably and you can expect that there will be arguments against tax decreases by saying it will increase the deficit and add to the debt. I joined with Sen. Gregg to try and remove this discrepancy between spending programs and tax cuts but was not successful.

Any other thoughts about the political landscape and its relation to veterinarians and practice owners?

The actions by this Congress will have an adverse effect on our economy for decades.

The United States’ total debt is about $13.7 trillion with our gross domestic product at about $14.7 trillion. The Presidents budget for 2011 is about $3.4 trillion. Deficit figures for 2009 were released on October 16, 2010 at $1.42 trillion, three times that amount of the previous record year. With debt levels at 93% of gross domestic product and growing at such a fast rate the Congress must cut spending in such unpopular areas as Medicare, Medicaid, and Social Security. They account for about 66% of the total budget. The news media will cover earmarks but these three huge programs are the real issue. Most likely they will look at increasing taxes on business even more as they cut these programs to show balance.

Our economy as it stands now has little or no reserves for another economic downturn. With this grim outlook veterinarians and especially those with real estate like veterinary hospitals must work to reduce their debt obligations because this could very well mean higher interest rates are coming because the government is borrowing so much and concerns about China buying our debt.

Comments (1) -

Guest
GuestUnited States
11/2/2010 12:48:00 PM #

Dont forget to vote!
-BW

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