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IS UNCERTAINTY CONTRIBUTING TO THE JOBS 

CRISIS: THE VIEWS OF LOCAL ILLINOIS SMALL 

BUSINESSES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ECONOMIC GROWTH, TAX, AND 

CAPITAL ACCESS 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD 

DECEMBER 12, 2011 

Small Business Committee Document Number 112–048 

Available via the GPO Website: www.fdsys.gov/house 


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(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

ROBERT SCHILLING, Illinois 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

JANICE HAHN, California 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

OPENING STATEMENT 

Page 

Hon. Joe Walsh ........................................................................................................ 1 

WITNESSES 

Eric Treiber, President and CEO, Chicago White Metal Casting, Inc., 

Bensenville, IL ..................................................................................................... 3 

Perry Moy, Owner, Plum Garden Restaurant, McHenry, IL ............................... 5 

Craig Larsen, Founder/President, AHC Advisors, Inc., St. Charles, IL .............. 7 

APPENDIX 

Prepared Statements: 

Eric Treiber, President and CEO, Chicago White Metal Casting, Inc., 

Bensenville, IL .............................................................................................. 16 

Perry Moy, Owner, Plum Garden Restaurant, McHenry, IL ........................ 24 

Craig Larsen, Founder/President, AHC Advisors, Inc., St. Charles, IL ...... 28 


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smartinez on DSK6TPTVN1PROD with HEARING
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IS UNCERTAINTY CONTRIBUTING TO THE 

JOBS CRISIS: THE VIEWS OF LOCAL ILLINOIS SMALL BUSINESSES 

MONDAY, DECEMBER 12, 2011 

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ECONOMIC GROWTH, 

TAX, AND CAPITAL ACCESS, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:05 a.m., at the 

Woodstock City Hall Council Chambers, 121 West Calhoun St., 

Woodstock, Illinois, Hon. Joe Walsh (Chairman of the Subcommittee) presiding. 

Present: Representative Walsh. 

Chairman WALSH. Welcome. Thank you, everybody, for coming. 

Let me officially gavel in this hearing of the Small Business Subcommittee on Economic Growth, Tax, and Capital Access. We are 

now in order. 

It is great to be in Woodstock. This is a field hearing away from 

D.C. 

I would like to, before I get started, and I will do this again, 

thank our three witnesses for coming this morning. And we look 

forward to your testimony on a very important and timely topic, so 

thank you. 

And welcome to everybody else who has come this morning. 

According to economists, the recession ended more than 21⁄2

years ago. While that may be the view in certain academic circles 

and on Wall Street, it is definitely not the view or experience of 

small businesses in Woodstock and on Main Street, or the over 13 

million Americans who remain unemployed. 

According to statistics from the Small Business Administration’s 

Office of Advocacy and the National Federation of Independent 

Business, small businesses suffered more than their larger counterparts in the recession, and their optimism about the future is also 

lower than expressed by large businesses. 

While the experiences they face in the difficult recession may account for some of this sentiment, a growing body of evidence and 

the voices of small-business owners are demonstrating that policy 

actions and inactions in Washington are in no small part causing 

their malaise. 

The economy, our economy, needs entrepreneurs to take risks 

and invest in the kinds of capital improvements that will expand 

their businesses and create new jobs. However, when faced with 


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uncertainty, businesses are often reluctant to bear new risk. And 

as a result, they hold off on making new investments. 

In a recent research paper, economists with the University of 

Chicago and Stanford University created a policy uncertainty index 

that tracked business concerns about the direction of Federal 

spending, tax and other policies, and measured their impact on the 

broader economy and on employment. 

In applying these models to publicly available data going back to 

1985, the researchers found that policy uncertainty has had significant impact and effects on the broader economy and has impaired 

the creation of some 2.5 million jobs. 

A similar study by the Federal Reserve Bank of Cleveland found 

that in 2011 the percentage of small-business owners planning to 

hire would be 6 percentage points higher if it were not for policy 

uncertainty. 

This is not rocket science. It is common sense. If you are a business owner and need to hire another employee or buy some new 

equipment, but you are unsure about how Washington is going to 

change your taxes or how much a new regulation is going to cost 

your company, you will hold off on that purchase and you will hold 

off on that hire. Scenarios like this are playing out all across our 

district and all across the country. 

This policy uncertainty is preventing American small businesses 

from creating jobs, and it is crushing economic growth. 

The current Administration does not understand this. It doesn’t 

understand how business works. In the last fiscal year alone, Federal agencies unleashed 43 major new rules. According to the National Federation of Independent Businesses, the cost of implementing these rules is $28 billion, the highest level since 1981. 

Who is going to make new hires or buy any new equipment when 

they have to comply with $28 billion in new rulemaking? 

The purpose of today’s hearing is to learn how policy actions and 

inaction in Washington are affecting local Illinois small businesses 

and to hear their recommendations on how government can create 

a more positive business environment more conducive to job creation. 

So again, to our witnesses, welcome. Thank you for coming. Let 

me just take a moment to explain the timing lights. You will each 

have 5 minutes or so to deliver your testimony. The light will start 

out as green. When you have 1 minute remaining, the light will 

turn yellow. And finally, it will turn red at the end of your 5 minutes. Try to keep within that time limit, but your chairman has 

been known to be quite lenient when it comes to finishing testimony. 

And, again, your written testimony will be part of the official 

record. 

Our first witness this morning is Eric Treiber. He is president 

and CEO of Chicago White Metal Casting in Bensenville, Illinois. 

The company was started by his grandfather in 1937 and manufactures metal castings for a number of industries. Eric is testifying 

today of behalf of the North American Die Casters Association. 

Mr. Treiber, thank you, and welcome. You are welcome to deliver 

your testimony. 


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STATEMENTS OF ERIC TREIBER, PRESIDENT AND CEO, CHICAGO WHITE METAL CASTING, INC., BENSENVILLE, ILLINOIS, ON BEHALF OF THE NORTH AMERICAN DIE CASTERS 

ASSOCIATION; PERRY MOY, OWNER OF PLUM GARDEN RESTAURANT, McHENRY, ILLINOIS, ON BEHALF OF THE NATIONAL RESTAURANT ASSOCIATION; AND CRAIG LARSEN, 

FOUNDER AND PRESIDENT OF AHC ADVISORS INC., ST. 

CHARLES, ILLINOIS, ON BEHALF OF THE FINANCIAL PLANNING ASSOCIATION OF ILLINOIS 

STATEMENT OF ERIC TREIBER 

Mr. TREIBER. Thank you. Good morning, Chairman Walsh. You 

cut about a minute out of my presentation, so I appreciate that. 

That gives me some additional time. 

Today, there are over 350 U.S. die casters manufacturing thousands of nonferrous casters. More than 90 percent of all manufactured goods and capital equipment use metal castings as engineered components, or rely on castings for their manufacture. 

In Illinois, Chicago White Metal is one of nearly 40 die-casting 

facilities, and our company is a leading manufacturer of aluminum, 

magnesium, and zinc castings. 

We have 230 employees. Many of them are in skilled trades, with 

an average tenure of 17 years. 

Our customers come from the medical, automotive, industrial, 

telecommunications, and recreational industries. As an example, 

for the automotive sector, we produce a number of intricate die 

castings that become parts of rearview-mirror housings, headlight 

housings, and the power system of electric vehicles. 

The manufacturing sector has been deeply affected by the recession with more than 2 million jobs lost. A strong U.S. manufacturing sector is key to jobs, innovation, and prosperity in the State 

of Illinois and America. 

To regain momentum and encourage hiring, the U.S. needs not 

just improved economic conditions but also consistent policies in 

taxation, energy, labor, trade, health care, education, and, certainly, regulation. 

Unfortunately, many die casters are holding off hiring new employees for the following reasons: uncertainty about the economy, 

uncertainty about tax liability, double-digit increases in our health 

care premiums, increased costs with waves of new regulations, and 

potential increases in our energy costs. 

In particular, we are troubled by three new costly Environmental 

Protection Agency regulations—the Boiler MACT, Utility MACT, 

and Cross-State Air Pollution Rule. 

We are extremely alarmed that Utility MACT could endanger 

America’s power supply. The electric industry has only 3 years to 

comply with the new rules that are designed to force dozens of coalfired power plants to shut down. It is likely that the Nation’s power 

grid will be stressed in ways it has never experienced. 

Given the great amount of uncertainty over critical government 

policy areas, instead of hiring new employees, the die-casting industry is faced with utilizing overtime with its current workforce 

and/or hiring temporary workers to fill employment needs. 

This Administration has imposed excessive regulations with little 

regard for their impact on job creation and the economy. 


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In my testimony, I am focusing on two areas, the EPA and U.S. 

tax policy. The die-casting industry has long recognized the need 

for sensible regulations to ensure workplace safety and protect public health. But the Federal Government has gone too far. 

The Obama Administration has 4,257 new regulations in the works, 219 of which will cost over $100 million annually, which is 

15 percent more than last year. 

A recent Small Business Administration report showed the total cost to employers of Federal regulations is $1.75 trillion. The average regulatory cost for each employee of a mid-sized manufacturer 

now exceeds $13,000 per year. 

Meeting the demands of Federal regulations can cost companies 

millions of dollars each year in staff time. We specifically had one 

and a half people devoted to following regulatory compliance. 

Some of the most economically threatening regulatory proposals 

come from the EPA. The agency is currently advancing 20 proposed 

major rules with 173 others. 

In 2011, the agency began regulating greenhouse gas emissions 

from stationary sources under the Clean Air Act. While only the 

largest facilities will be regulated at first, this action sets the stage 

for future regulation of much smaller sources. 

Despite being a small business, it turns out our company is already bound with a set of reporting requirements under the new 

greenhouse gas requirements. Nowhere did the EPA announce and/ 

or outline these new reporting obligations. There was no public outreach to business. We had to do it all on our own. Our environmental manager spent hours researching potential reporting triggers and discovered that die casters that utilize magnesium, which 

we do, are immediately covered. 

Beginning in 2012, we have to register at E-GGRT, which is the 

electronic greenhouse gas reporting tool, and start reporting our 

emissions. It takes about 6 hours a year to monitor, not even including the reporting time it will require. 

We believe that major regulations that place new burdens on the 

private sector should be subject to congressional approval. I support the REINS Act, which is Regulations from the Executive in 

Need of Scrutiny, which passed the House on December 7th, which 

would require all bills be signed off by Congress and the President 

that have a $100 million or greater impact. 

As Congress begins debating tax reform, the tax code should provide businesses relief from burdensome and confusing tax rules. 

Many of these provisions are enacted on a temporary basis, requiring repeated extensions. 

The uncertainty resulting from such temporary tax policy makes 

it difficult for die casters, which rely on 5- and 10–year business 

strategies, to plan effectively. 

The bonus depreciation and section 179 expensing will be extended in 2012, but at a much lower rate. Bonus depreciation and 

section 179 expensing provide tax relief for companies that want to 

buy capital assets, such as plant machinery and equipment. These 

investment incentives have had a positive impact and incentivized 

business purchasing and job creation. 

While it is possible that Congress may choose to extend some of 

the expiring tax provisions, there is no guarantee that they will be 


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available to the same extent. We need a national tax climate that 

does not place manufacturers at a competitive disadvantage in the 

global marketplace. Our tax rate is higher than trading partners 

such as Canada, and they pay perhaps half the taxes that we do, 

18 percent compared to our 40 percent. 

The bottom line is predictability and consistency in U.S. tax code 

will offer the long-term planning in investments that enable us to 

stay competitive. 

Chairman Walsh, thank you again for the opportunity to testify 

today. I would be happy to ask respond to any questions at the appropriate time. 

[The statement of Mr. Treiber follows on p. 16.] 

Chairman WALSH. Thank you. Thank you, Mr. Treiber, for your 

testimony. 

Our next witness is Perry Moy. Perry is the owner of Plum Garden Restaurant located right in McHenry. He is testifying today on 

behalf of the National Restaurant Association and previously 

served on that organization’s board of directors. 

Mr. Moy, you may now deliver your testimony. 

STATEMENT OF PERRY MOY 

Mr. MOY. Thank you, Mr. Chairman. 

I speak from close to 50 years of experience in the restaurant 

business. My dad was a naturalized U.S. citizen, a descendant of 

the Chinese immigrants who built the railroad from San Francisco 

to St. Louis. He died at an early age of 30, leaving my mom with 

four kids. 

In 1965, we moved to Park Ridge, which was a suburb just outside of Chicago, and my mom and I took the train down to: 

McHenry. We stopped in McHenry and went to Main Street. It was 

a bustling street. It had the bank. It had the post office. It had the 

famous Althoff’s plumbing. That is where they started. 

We walked down that street and I asked this big man—and I 

was all of 14, and my mom was all of 4′1′′ and couldn’t speak a 

word of English. ‘‘How much to rent this building, sir?’’ And he 

looks at us and looked at us and he finally said, ‘‘How about $70 

a month? I will throw in the utilities, and you can live upstairs.’’ 

And that was it. That is how the Plum Garden started. And I graduated from McHenry High School in 1969. 

From that then, I am proud to say we are the oldest independent 

restaurant in the history of the county, close to 46 years. A lot of 

you in this room have been to my restaurant, and I employ about 

18 people. I consider them to be a part of my family. We have 

worked hard to try to maintain the quality of service. 

But this county has gone through some very, very tough times. 

We were the fastest growing county, as you alluded to, Mr. Chairman, due to the construction of homes being built here, 20,000, 

30,000 homes a year sometimes. And now that industry is over. 

We saw a 30 percent drop in my business in 2009. How do we 

handle the skyrocketing costs? And the fuel costs, we are at $5 a 

gallon, and stuff like that. The food costs are going up. How do we 

deal with things like this? 

I got my team together and said, ‘‘We have to work harder. I am 

asking you to do more for less.’’ And a lot of my staff have been 


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with me since high school, over 20, 30 years. And that’s how we 

began the turnaround. 

From this, then, we worked harder. We worked smarter. We 

tried to do more. My staff did more for less, and I thank them for 

that. And that was a part of the spirit of our community. 

I have learned a lot in this these past few years. First, I think 

America has ignored Main Street. Small business can’t get access 

to capital they need. Nobody qualifies, especially in the restaurant 

business. Banks sit on funds, but we cannot achieve any of those 

funds. The SBA has great programs. I have looked into them. 

And I encourage the Federal Government to make the SBA loan 

process as easy as possible. If Congress can keep the SBA loan 

guarantees high, and the bank’s exposure—especially the local 

community banks’ exposure at a minimum, it would be a great way 

to ease the pain during these tough times. 

Secondly, I would like to see a moratorium on new taxes, regulations, and mandates. Let’s just stop this craziness that is going on. 

As entrepreneurs, we don’t know what is around the corner. Health 

care is a major concern. Maybe I may not qualify for the mandated 

national health policy that is going to come around, but I know 

every small-business guy and every restaurateur is so afraid of 

what is around the corner, they don’t know how to react to that. 

A business like mine is hit hard by not just Federal Government 

but local government. Everybody is seeking taxes, and mandates, 

regulations. Because they are hurting, they want to pass that burden onto us, and I have to pass that burden onto my guests and 

customers who have been with me close to 40 years. And it is just 

impossible to handle that challenge sometimes. 

We all want to comply with the law, but these government mandates divert our savings and our energies to try to produce a great 

product. 

And finally, the State of Illinois created—we went through an 

audit, a random audit, so they say. And at the end of the day, the 

Illinois Department of Revenue said, ‘‘Perry, the State of Illinois 

owes you $112.’’ But then he asked for my purveyor bills, and he 

looked at them. He spent another 4 hours with me and looked at 

all my—he handed me a bill for $5,000. And I said, ‘‘I thought you 

said you owe me $112.’’ He finally came up with a thing that had 

said, ‘‘Well, you use cooking oil, don’t you, in your food?’’ And I 

said, ‘‘Yes, I do.’’ 

‘‘Cooking oil is defined by the State of Illinois as a use. It is not 

deemed as food. Ten percent is food; 90 percent is use, so I am 

going to charge you 6 percent on your cooking oil, so you owe us 

$5,000.’’ Never heard of it. I called up all my friends in the restaurant business, and they never heard of things like that. 

These are some of the predatory things the government tries to 

do. They come out to reach in these times against small business. 

As my friend here, Eric, has stated, we need a fair tax code. We 

want to know what is coming around the corner. I mean, things 

like I just put in a small bar and a new floor, and it cost me 

$8,000. If Congress could support that 15-year depreciation schedule for restaurants, I think that would be great. Instead, that is 

going to expire. It is going to go to 39 years. I know that both sides 

of the House are wrangling on it. 


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The other thing that I could see happening is the work opportunity tax credit incentive for restaurants. We hire people that fall 

through the cracks sometimes. 

As a basic principle, the tax code always says that business expenses should be fully deductible. I remember back in the ’80s that 

we had 100 percent business meal deductibility. I was honored to 

be a delegate to the White House Conference on Small Business, 

and that issue to maintain and retain business meal deductibility 

was the number two issue coming out of the White House Conference on Small Business under President Clinton, 14 or 40 votes 

short of being the number one issue. And I remember President 

Clinton asking me, why is this so important? Because it means 

jobs. It means a future. Because small-business people like myself 

and like sitting at this table need a place to share some coffee and 

some bread so that they can market themselves and create new 

jobs. And I think that is important. 

Finally, I think that I want to thank Senator Durbin for helping 

us, for lowering the fees on debit cards. I mean, we have had partners in our restaurants, people that use credit cards and debit 

cards, the fees are outrageous. And he helped us lower those fees, 

and I thank him for that. 

Unfortunately, government sometimes doesn’t really understand 

that—just get out of our way, and I think we can create jobs. And 

the restaurant industry is the second-largest job creator in the 

country. We employ almost 13 million people. 

So from this testimony, I hope that we can move forward. Just 

a moratorium on new taxes would be great. 

Thank you, Mr. Chairman. Thank you, everybody here. 

[The statement of Mr. Moy follows on p. 24.] 

Chairman WALSH. Thank you. 

Our next and final witness is Craig Larsen. He is founder and 

president of AHC Advisors, Inc., a financial planning company located in St. Charles. Mr. Larsen began his career working on the 

floor of the Chicago Mercantile Exchange before leaving to found 

AHC Advisors in 1995. He is testifying today on behalf of the Financial Planning Association of Illinois. 

Mr. Larsen, thank you for coming, and I look forward to hearing 

your testimony. 

STATEMENT OF CRAIG LARSEN 

Mr. LARSEN. Thank you, Chairman Walsh. Thank you for inviting me here today to speak about the difficulties that small businesses face in today’s uncertain political and economic climate. 

I think my testimony will be less than 5 minutes, because in 

many places, I can say ditto. Although we are from three different 

industries, there is a common theme that I hear. 

My company is a small business, a very small business. I have 

one full-time employee and one part-time employee. My company is 

expanding, and I need to hire another person. I will relate some of 

the challenges that I am facing later in my testimony. 

The first area I would like to focus on is tax policy. The tax code 

is continuously being modified. In 1986, the goal of tax reform was 

to make the code more fair and simple. Since that time, there have 

been tens of thousands of changes and additions. That isn’t simple. 


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This complexity adds to businesses uncertainty. Many of these 

changes are driven by special interests who are able to secure preferential treatment. These changes have been supported by both 

Democrats and Republicans over time. 

For example, in Illinois, both the CME and Sears are seeking 

preferential treatment that won’t be available to small businesses. 

The current tax rates will be in effect until the end of 2012. New 

business projects or an expansion of existing ventures are evaluated by using models that estimate take-home profits to their owners over the life of the project. A very important component of this 

evaluation is the expected tax rate. 

If businesses are unable to reasonably predict future tax rates, 

how can they be expected to expand or undertake new projects on 

the margin if it is possible that future tax rates could be so high 

as to make these projects unprofitable? 

If businesses don’t expand existing projects or take on new 

projects, employment growth will remain muted. Although differences in political philosophy will shape an individual’s view of 

how the tax code should be written, it cannot be disputed that 

more complexity and uncertainty in the tax code reduces the likelihood that businesses will invest in existing or new projects that 

will produce economic growth and, most importantly, create jobs. 

Regarding regulation, although there has been a significant increase of regulation of many industries—we have heard some examples here—including health care and energy also, I am going to 

focus on the industry in which my company is engaged, which is 

financial services. 

The financial services industry is one of the most heavily regulated sectors of our economy. There are tens of thousands of pages 

that regulate financial companies. However, what we see time and 

again is that new regulations don’t eliminate problems in the future, even in the areas that they were specifically designed to address. 

For example, the Madoff scandal is a good example. What Madoff 

did violated the laws that were currently on the books, and I don’t 

believe that additional regulations would have stopped him from 

engaging in fraudulent behavior. 

Compliance is so complex and ambiguous in the financial services industry that I have had to outsource this area to an outside 

legal firm. Despite this, we spend quite a bit of time internally 

dealing with compliance issues. I estimate that our external and internal regulatory compliance costs exceed $10,000 per year. These 

costs have increased since the passage of Dodd-Frank. 

This is time and money that is spent dealing in large part with 

ambiguous and unclear legislation as it is written. This is time and 

money that could otherwise be spent growing my business. 

However, I don’t believe that all regulations are bad. A set of 

consistent, clear, and reasonable regulations are important to have. 

Unfortunately, that is not what we have in the financial services 

industry. Instead, we have financial regulations that are vague and 

ambiguous in many areas, that were designed in large part, many 

of them, in the ’30s and ’40s. They are also, in large part, a product 

of the lobbying efforts of the very same financial institutions that 

were at the heart of the financial crisis. 


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George Stigler found that oftentimes regulators become captives 

of the regulated, because that is who lobbies the regulators. That 

is important to remember. 

My experience as a business owner is such: My business is expanding. I need to hire more people. Given elevated costs related 

to tax increases and increased regulation, and, importantly, uncertainty about potential even greater costs in the future, I have made 

a decision to hire only a part-time employee, instead of a full-time 

employee. 

How am I supposed to make informed and rational decisions on 

hiring when there is so much uncertainty? This is uncertainty both 

in the tax code and the regulations that my firm operates under. 

I don’t think that I’m alone. In fact, we have heard that here. I 

think that businesses large and small are dealing with similar 

issues and that this directly contributes to the stellarly high unemployment rate that we face today in the United States. 

It is my hope that we can leave the environment of tax uncertainty and excessively politically driven regulations behind us. Our 

country would be better off if we put in place a set of limited but 

commonsense regulations and a tax code that is less complex and 

provides businesses with the certainty of knowing what their future tax rates will be. Businesses would then be able to plan for 

the future, grow, hire even more employees, and get our country 

back on the path of growth and prosperity. 

Thank you for your time, and I will take any questions that you 

may have. 

[The statement of Mr. Larsen follows on p. 28.] 

Chairman WALSH. Thank you. Thank you all for your testimony. 

Let me sort of weave my way around a few different topics with 

some questions. 

Let me address the first couple toward each witness. 

It was former Illinois Senator Everett Dirksen, I believe, who 

said a billion here, a billion there, pretty soon you are talking 

about real money. 

I have been in Washington a year now. We are not talking billions; we are talking about trillions of dollars that Washington is 

spending that Washington doesn’t have. 

All of this Federal spending, all of the debt, all of the deficits, 

give us your take on what that does to your particular type of a 

business. What sort of uncertainty in general does that create for 

you as small-business men? The overall debt that Washington finds 

itself faced with. 

Mr. TREIBER. From our standpoint, not just as a businessman, 

but as a person in the community, it is as if—if we ran our business like the government is running theirs, we would be bankrupt. 

We would be out of business. So it leaves me specifically wondering 

how can they operate this way, because if we were to do that, we 

would no longer exist. So it leaves me wondering who is really in 

charge. 

Mr. MOY. Mr. Chairman, it is such a negative role model that we 

look at. We look for leadership. There is a lack of it. And that then, 

we feel that we have been left down. And I think that is the major 

concern. And that creates that uncertainty and that cloud. 


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Mr. LARSEN. I would just say from my perspective the huge debt 

we have—I think our total debt is almost 100 percent of GDP, so 

we owe almost as much as we produce in a year—as I look at that 

and plan, my assumption is that we obviously have to pay that 

debt back in the future. And unfortunately, I think that is going 

to come through increased taxes. However—— 

Chairman WALSH. No, Craig, continue that was—or maybe come 

back to that as well. Do most business men and women understand 

or assume that that is going to have to be paid by someone? 

Mr. LARSEN. So money doesn’t grow on trees. You can only spend 

the same dollar once. So if a dollar is spent, it is spent on some 

venture and it is owed, it has to be paid back. And that has to 

come from either a cut in spending or an increase in taxes. Unfortunately, I think in this environment, we are going to narrow the 

deficit by increased taxes. It is unfortunate, but I see that. 

So when it comes to planning, for example, my expansion, I’m 

looking at new office space and all the capital costs that go into 

that. Now I have to discount what additional profits may be sent 

to the government, and that is less money that can be used to pay 

back—— 

Mr. MOY. And there is also a concern of inflation. You keep 

printing that money out and all of a sudden now the charge of my 

food has to go up to coincide. It is a domino effect. It is just a horrible, vicious cycle that we seem not to be able to get out from 

under. 

Chairman WALSH. Eric, any final thoughts on the whole debt and 

the uncertainty that that creates for business? 

Mr. TREIBER. Well, again, it is unknown, but one would assume 

that the way to mitigate this in the future is going to be through 

increased taxes. 

Chairman WALSH. Let’s then segue into taxes and tax policy. The 

House will probably vote this week on another extension of, say, 

the payroll tax cut. The Bush tax rates are going to be up again, 

so there will be debate and discussion as to whether they should 

be extended temporarily. 

The prevailing mood in Washington seems to be to extend things 

temporarily, to fiddle around with taxes temporarily. Give me your 

notions on this whole movement toward temporarily raising or cutting taxes and doing something permanently, either raising or cutting them, and how that impacts business. 

Start with Craig. 

Mr. LARSEN. So Milton Friedman won the Nobel Prize in 1976 

for something called the permanent income theory. In a nutshell, 

what that means is that people make rational decisions based not 

upon what might happen next week or next year, but what is going 

to happen in the long run. And so when you apply that to temporary tax cuts, what he found is that what happens next year 

really doesn’t matter because businesses essentially expect that in 

the long run, this temporary tax cut might expire or you have uncertainty. So temporary tax cuts might do nothing but build the 

deficit. 

Chairman WALSH. Will extending the payroll tax cut, and even 

cutting the employer’s piece of it temporarily, will that lead to any 

hiring? 


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Mr. LARSEN. No, because—I am very surprised that this is being 

talked about and continues to be something that is found as a way 

to stimulate the economy. You are taking a system that is already 

under stress, Social Security, and now we are paying less into it. 

Well, you are paying less into it. Eventually that money has to be 

paid back. 

And so it is a very clear example of how temporary tax cuts are 

going to lead to future tax increases, because if you are paying this 

much less to Social Security, which is already under stress, in the 

future, you are going to have to pay this much plus what you didn’t 

pay in the past. It is, in my opinion, a terrible idea. 

Chairman WALSH. It shouldn’t be surprising. 

Perry, so we temporarily cut your share of the payroll tax. Is that 

going to lead to more hiring? 

Mr. MOY. A short-term fix creates long-term problems. I support 

the permanent. Cut it permanently. Then we can adjust to the 

budget. Maintain the Bush tax cuts. We are overtaxed, as it is. And 

from that then, we can plan for the future. 

When government acts in a way of a temporary fix, a short-term 

fix, it creates long-term concerns and problems. And the big problem will be that it is not going to create a workable job creation 

economy. 

Chairman WALSH. The whole issue of the payroll tax and Social 

Security is an issue that nobody in Washington really is even talking about. Members of both parties are, ‘‘It is a tax cut, it is the 

tax cut,’’ not even mentioning the fact that we are dipping into the 

money to pay for Social Security. 

So an important issue, a separate issue, because everybody is 

just on the tax cut bandwagon. 

But, Eric, this notion of temporary vs. permanent when it comes 

to tax policy? 

Mr. TREIBER. That would spur absolutely no job creation for us. 

A temporary tax credit, we are going to have to—it is not going 

to—— 

Chairman WALSH. Not going to compel you to hire. 

Mr. TREIBER. Absolutely not. Absolutely not. 

We talked about the R&D tax credit, which expires basically 

every year. It is set to expire again at the end of this year. It is 

the 14th or 15th time. That type of policymaking really hinders our 

desire to go out and make investments in our company and capital 

equipment because we don’t know what the future holds. 

So temporary tax cuts or those that require renewal every year 

are very self-defeating. 

Chairman WALSH. If the three of you could each be king for a 

day and you could enact one permanent piece of tax policy, what 

would it be? 

Mr. MOY. A moratorium. 

Chairman WALSH. A moratorium on? 

Mr. MOY. A moratorium on any new tax, regulation, mandate. 

Chairman WALSH. Craig, if you could specifically permanently 

alter one aspect of taxation, what would it be? 

Mr. LARSEN. Pick a rate and stick with it. Let us plan. Obviously, 

I would prefer lower rates, but whether the rate is 23 percent or 


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26 percent, that really doesn’t matter. What matters is, pick a rate 

and stick with it. Let businesses plan. 

Chairman WALSH. Eric. 

Mr. TREIBER. I would reduce the corporate tax rate to something 

that is comparable with those countries that we are competing with 

across the globe. 

Chairman WALSH. Quickly, let’s move to health care. The health 

care legislation that was passed last year, what has that done negatively or positively in each of your estimations to the overall business jobs climates in the country? 

Perry, let’s start with you. 

Mr. MOY. In 1965, when we opened the restaurant, I offered 

health insurance in 1971. I was the oldest and one of the first 

groups that Blue Cross Blue Shield—it was innovative at that 

time, because I offered it to my staff. From that then, I had to take 

it away, because of this great recession that we are having. 

And what the mandated health care does is create false hopes for 

my staff. ‘‘Oh, we are all going to be taken care of.’’ And no matter 

what I say to them, ‘‘It is not going to be that way for you. It is 

not going to be like it was in 1971 when I offered you and gave 

you the health care benefits. That is not going to be the same. It 

is going to be different. It is going to be challenging, and no one 

knows how it is going to be.’’ 

Chairman WALSH. Craig, when it comes topic of this hearing, the 

overall uncertainty in the environment right now, combine that 

with a favorable or unfavorable climate for small businesses, what 

will this health care legislation do? 

Mr. LARSEN. Like a lot of the other regulations, create a lot of 

uncertainty and make it difficult to plan. 

The whole health care act, part of what balanced this act and 

made it revenue neutral was the CLASS Act when it came to longterm care, and that is falling apart. So now there is a hole where 

we don’t have that revenue. Somebody has to fill that. So it is going 

to come either through increased taxes or possibly, I would expect, 

businesses could expect their penalty that they pay for not insuring 

employees will go up. 

Again, it comes back to uncertainty and the known. Now there 

is uncertainty, but there is the known that we are going to be dealing with some bad things down the road. 

Chairman WALSH. Eric. 

Mr. TREIBER. Our costs to insure our employees is increasing in 

double digit percentages each year. Our agents and providers have 

told us that that is what is going to happen, that is what we should 

expect going forward. We are a $30 million a year revenue company, and our health care burden has gone to $650,000 a year, so 

it is going up by $65,000 or $70,000 every year. That is a big number. 

Chairman WALSH. And so what will that force you to do? 

Mr. TREIBER. What we have done is we passed those increases 

along to our associates. And, in some cases, we pared back various 

benefits. For example, the dental benefit became an option and you 

have to pay for it extra. And people have a difficult time understanding that. 


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But it was mentioned here, the penalties for eliminating coverage 

altogether, we have run the numbers on that, in the absence of all 

the data out there, but it would be less expensive for us to forgo 

coverage—— 

Chairman WALSH. Forgo coverage. 

Mr. TREIBER [continuing]. And pay the penalty. 

But where does that leave our associates? That is not something 

that a four-generation family business wants to do. 

Chairman WALSH. You have how many employees? 

Mr. TREIBER. Two hundred and thirty. 

Chairman WALSH. Okay. But even—— 

Mr. TREIBER. They are not all in the program. Some may be 

through their spouse—covered. We have about 120 people that are 

in the program. 

Chairman WALSH. You are telling me what I have heard from 

most companies in the 100- to 200- to 300-employee range, that 

when you run the numbers, it will be much less expensive to basically just forgo coverage. 

Mr. TREIBER. And I say that with not knowing what the future 

holds. There are a lot of things that haven’t been enacted yet as 

part—in 2013 and 2014 that are going to hit the road. 

Chairman WALSH. One specific question for each one of you. Eric, 

I will start with you. Manufacturing and the fact that—this is 

something that I hear at my town halls all the time: How are we 

going to get these jobs back here? How are we going to get the 

manufacturing sector back into this country? 

In your estimation, balance all the regulation, what we have 

been talking about this morning, regulations and taxes, how that 

contributes to us not being able to keep manufacturing jobs here, 

balance that with policy toward China, other external forces that 

are preventing us or causing us to lose manufacturing jobs. How 

do you wrap it all up? 

Mr. TREIBER. If the question was asked of me a few years ago 

for manufacturing in general, there would be a heavier slant toward offshore competition, currency manipulation, unfair trade 

practices, things of that nature. That is shifting more toward a 

focus on taxes and regulations in the fast past few years, as the 

cost of doing business in low-cost regions is rising. As their overall 

economies improve and their employees ask for higher wages, the 

costs levels are shrinking. And now we are focusing on other 

things, such as regulatory policies and taxes. 

In no way diminishing the importance of what Perry does, it is 

our belief and has been our belief that manufacturing is the economic engine that drives this country. If you look back at all times 

of recession and times of prosperity, it is having a strong manufacturing sector. When that exists, we get to go use Perry’s restaurant 

and we get the financial services from Craig. Without that, a nation that relies on Starbucks and McDonald’s and banks is doomed 

for failure. 

Chairman WALSH. So what are two or three things that your government can do to bring back and keep manufacturing jobs here? 

Mr. TREIBER. Establish sound and responsible regulations 

through, for example, the REINS Act, which would require Congress to approve and the President to sign off on regulations that 


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are of such a financial magnitude that they pass a certain threshold. That would be one ready example. 

Chairman WALSH. So is it fair to say from your perspective that 

the regulatory environment in this country makes it very difficult 

to keep manufacturing jobs here? 

Mr. TREIBER. No doubt about it. And all regulations aren’t bad. 

We need environmental regulations. We need regulations for our 

employees to have a safe and comfortable workplace to go to. We 

understand that. We promote that. We are an environmentally 

very proud steward of our footprint. 

But give us a chance to compete against other countries. 

Chairman WALSH. Craig, we are losing small and community 

banks weekly in this country. Nobody worries for the big banks. 

They are fine, and they are sitting on a lot of cash. They have been 

taken care of. It is the small and community banks that have really 

taken it on the chin. I hear from small businesses in my district 

all the time that they can’t get access to capital. 

We held a hearing in Washington a few months ago and brought 

in the heads of small and community banks, and they all said the 

same thing to us: ‘‘The reason we can’t lend is because of regulations.’’ Namely, they pointed toward Dodd-Frank. 

Give me your 30 seconds to a minute on Dodd-Frank, what we 

can and should do. I will limit you to 30 seconds. 

Mr. LARSEN. Okay, I guess first of all, removing a lot of ambiguity in the bill. It was well-intentioned. I think they try to take 

care of the too big to fail. Part of the problem is that we didn’t take 

care of too big to fail as it relates to overseas branches. So if they 

went down, I don’t think that would solve the problem. 

I think Dodd-Frank is a good example of legislation that was 

passed on the heels of a crisis that tried to address everything, and 

it didn’t do much, in my opinion, to help. I think smarter regulation, more clear regulation, would be more helpful. 

Chairman WALSH. Are you telling me you have the nerve to sit 

here, Craig, and tell me that Washington passed a piece of legislation without fully understanding what was in it? 

Mr. LARSEN. Yes, believe it or not, yes. 

Chairman WALSH. Okay. 

Perry, I think you told me that before, but as a 14-year-old, how 

you and your family started that business, your business, back in 

the good old days; I don’t mean this to be an easy question, but can 

you imagine doing that today? Would it be as easy to simply start 

a new business like that today? 

Mr. MOY. We have to bring back that climate, Mr. Chairman. 

And we have lost sight of that. The strength of this country has 

always been the middle class. We are a blue-collar country. We 

have the values. We have the people. We have the wherewithal and 

the desire to succeed, but we have stopped them. Government has 

put a block right in front of them. 

Chairman WALSH. My final question, short answer from each of 

you, there is obviously a lot that we as a country have to get right 

in the next year, or two or three. The biggest problem we have, 

which impacts everything, is we are not working. Americans are 

not working. Too many of us are not working. 


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Give me a brief answer as to, again, if you want, connect it to 

what we are talking about today, but when it comes to jobs policy, 

what can or should your government do or not do to help put this 

country back to work? 

Eric, start with you. 

Mr. TREIBER. I think things that are focused on creating jobs. I 

was lucky enough to sit in the Congress when President Obama addressed a joint session of Congress, and it was all about creating 

jobs. And now it looks like we are blocking it. There are a lot of 

holes out there. 

As Perry said earlier, get out of the way of small business. We 

are the creators of the majority of jobs in this country. Get out of 

our way. Let us do business the way we need to do business, responsibly regulated, and we will create the jobs the way we have 

been doing it for decades. 

Chairman WALSH. Perry, how are we going to get this country 

working again? 

Mr. MOY. As an industry that employs almost up to 10 percent 

of the jobs here in this country, get out of our way. Don’t regulate 

us. Don’t mandate us. And again, no new taxes. 

Let us create the jobs that we are capable of doing. 

Chairman WALSH. Craig, you are president for a day. What is 

your jobs policy? 

Mr. LARSEN. Reduce regulations, a stable tax policy, and the realization that government doesn’t create jobs, business creates jobs. 

So every time you hear the government talk about, ‘‘We want to 

grow jobs, and we have a certain policy to do this or that,’’ what 

they are doing is picking winners and losers. 

I love what Perry said: Get out of our way. 

Chairman WALSH. Thank you, three. And we are going to wrap 

up this field hearing here right now. 

I would like to acknowledge Woodstock’s finest, our mayor, for 

letting me sit in his chair this morning, Mayor Brian Sager in the 

back row there. Raise your hand? 

Thank you. 

Stick around, anybody, when I gavel the hearing to a close, I 

would be happy to answer anybody’s questions informally and get 

your thoughts. And maybe we can get the witnesses to stick around 

for a little bit as well. 

I would like to thank all three of you for coming today. You have 

all provided, I think, valuable insight into how decisions that we 

make in Washington impact you all. Most of the hearings that we 

hold, obviously, are in D.C. It is always enjoyable and, I think, as 

informative to get outside the Beltway and hold a field hearing. 

I ask unanimous consent that any members of the Subcommittee 

have five legislative days to submit their statements and any supporting materials for the record. 

Your written testimony as witnesses will be made part of the 

written record. 

And without any objection, that has been ordered. 

Chairman WALSH. Now we will gavel this hearing to a close. 

Thank you for coming. 

[Whereupon, at 10:55 a.m., the Subcommittee was adjourned.] 


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