Joe Biden: Friend of Small Business?

Vote on Sarbanes-Oxley amendment might give some indication.

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So, where does Obama's vice presidential pick stand when it comes to small-business issues? It's definitely known that Senator Biden supports the controversial card check for labor union elections and a higher minimum wage, but here's something less known.

Last April, some Senate Republicans, led by Jim DeMint of South Carolina, tried to insert an amendment into a math and science bill that would amend the 2002 Sarbanes-Oxley legislation to exempt smaller businesses from some of its regulations. The "Sarbox" bill, you'll remember, was passed to reform corporate governance in the wake of the Enron collapse. But many in Congress who supported the bill initially thought that several of its provisions went too far—such as Section 404, which requires companies to produce massively expensive "internal control reports." So, DeMint and others wanted to give smaller companies a break from Section 404, but Biden and 61 other senators disagreed, shooting down the amendment.

This might not seem like a small business issue at all, under closer inspection. Sarbox only covers publicly traded companies, and the proposed exemption would have affected companies with less than $125 million in revenue or fewer than 1,500 shareholders. Any business that has gone public is hardly the mom and pop corner store that we think of when we hear "small business."

But a business with under $125 million in revenue is a far cry from a multibillion-dollar behemoth like Enron was. In addition, one underappreciated aspect of Sarbanes-Oxley is the chilling effect it has on entrepreneurs and startups—an effect that can't be seen. As I've written about earlier, Section 404's burdens might dissuade some entrepreneurs from growing their companies because it imposes so many extra costs. The wake of Sarbox has also coincided with a slowdown in venture capital funding. The lack of an exemption for smaller public companies, then, could be hurting more humble startups by depriving them of the chances to grow larger.

Also, let's be fair: McCain did not vote for the DeMint amendment, either (although he didn't vote "no").