Election 2008: McCain or Obama?

For building service contractors, what decides whether Sen. Barack Obama or Sen. John McCain becomes the next president of the United States comes down to one simple question: How will the next leader of the free world affect the economy? More specifically, how the pocketbooks of small entrepreneurs will be affected.

Those BSCs, many of whom operate enterprises that are stung by downturns in their revenues or upticks in their expenses, have felt the pinch of an economy hurt by soaring gas prices, a sobered housing market, a dulled outlook for jobs and a general overall lack of consumer confidence.

“Under this administration, the economy has been sputtering,” says Michael Mahdesian, the chairman of the board at Servicon Systems Inc. in Culver City, Calif. “I think that Obama’s policies are much more thoughtful and fiscally responsible and will set the table for a resurgent economy.”

Business issues

In the cleaning industry, which relies heavily on employees, one of the driving forces behind who to vote for is healthcare. At the time of the interview, Mahdesian was in contract negotiations with union members, who were asking for full-family coverage instead of the single coverage that was being offered by the company.

Obama has pledged to a build national healthcare program for which every American would be eligible. Under his plan, businesses that do not provide “meaningful” insurance for their employees will be required to contribute a percentage of payroll toward the costs of the national plan. This does not include small businesses, which will get a tax credit.

“Obama has some serious proposals for covering most of the uninsured which would certainly take a lot of pressure off of us,” Mahdesian says. “If the union pressures the contractors to provide full-family coverage, then there is no guarantee now that we can go to our customers and get that paid for so we would have to absorb it. If there is at least some movement toward some kind of universal coverage...I think that takes a lot of the pressure off of the contractors.”

McCain also proposes a healthcare plan that, according to his Web site, will take the pressure off of small businesses caused by increased health insurance costs. McCain promises to provide $5,000 for health insurance to every American family and pledges to oppose “pay or play” requirements that could hurt small businesses.

“I don’t see either party coming up with any really solid healthcare programs,” says Eugene Day, president, Sanitary Building Services, Fort Wayne, Ind. “I read a couple of McCain’s proposals but they just seem like old things that he is rehashing and I don’t see anything new from him or the Republican Party.”

Day said he will still vote for McCain during the upcoming presidential elections due in part to his belief that the party is more likely to provide tax incentives to both small and large businesses. On the flip side, if Obama and the Democrats as a whole are successful this November, Day is concerned what it will mean in terms of higher taxes for businesses.

“I’m going to vote for John McCain, but really I am going to vote for the Republican Party more so than for John McCain,” says Day. “I feel that they are a little more conservative and there are some points that I feel that they are going to help small businesses stay in business.”

Specifically, McCain has committed to support small businesses by finding cheaper fuel sources, tackling healthcare and reform taxes codes in which he will keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase-out the Alternative Minimum Tax, according to his Web site. McCain will also support opening new markets by “encouraging the growth of even more jobs in this sector through more free trade agreements which give American firms more access to sell our goods and services abroad.”

Obama counters by calling for tax relief for small businesses and startup companies by eliminating capital gains taxes on these type of enterprises, according to his Web site. He is also calling for a $500 “Making Work Pay” tax credit to almost every American worker, which will eliminate double taxation that causes self-employed small business owners to pay both as an employee and the employer in payroll tax.

Obama also wants to create a national network of public-private business incubators that will “facilitate the critical work of entrepreneurs in creating start-up companies. Obama will invest $250 million per year to increase the number and size of incubators in disadvantaged communities throughout the country,” according to his Web site.

Another McCain supporter is Gail Strong, president of Allbright Systems LLC, Chesterfield, Mo. Strong, who runs the company along with her husband, owns the property where their business is located, a fact that has her concerned since Obama plans to increase capital gains taxes, according to Strong.

“I think Republicans have been traditionally more supportive of small businesses,” Strong says. “There is the issue of the taxes, too. I think that if Obama gets elected we are going to see the capital gains taxes go up. I would like to have something to leave my children.”

The price of gas

Another hot-button issue is the ever-increasing prices for oil and gas. Higher gas prices impact BSCs since many need to transport employees between locations. Strong says that she has part-time employees who are reluctant to drive too far. Higher gas prices have also eaten away at profits in an industry that is heavily dependent on fixed revenues and keeping expenses low.

“Whoever tries to do anything, it’ll take a long while,” Strong says. “I think that being able to drill in areas offshore and in other areas can be done without damaging the environment.”

McCain’s energy platform begins with an expansion of domestic oil and natural gas exploration and production. He also believes in a clean car effort and giving a $5,000 tax credit to those who purchase a zero-carbon car. McCain is also keen on investing in alternative clean fuel sources such as clean coal technologies and nuclear while encouraging the use of wind, solar and hydro power.

Obama’s plan to address the energy crisis begins with providing relief to common Americans at the pump, creating five million clean energy jobs during the next decade and building a surplus of oil to alleviate the U.S. dependence on foreign markets. His plan also involves putting one million plug-in hybrid cars on the road by 2015, creating an initiative that 10 percent of U.S. electricity comes for renewable sources by 2012 and reducing greenhouse gas emissions over the next four decades.

“There has to be another policy other than using gasoline,” says Day. “If we continue to use our gas and oil to create more energy, it has to get more expensive because we keep using it up so they have to develop some more alternative plans.”

With green cleaning efforts cropping up throughout the cleaning industry, many are looking at environmental issues as a reason to vote one way or another.

“Obama has some strong proposals to stop the acceleration of global warming and to deal with more green environmental issues,” says Mahdesian, whose company has made an effort during the last five years to clean with environmentally friendly products and processes. “We really feel strongly to do what we can to help the environment and I think Obama is more on that track than McCain.”

Party lines

The majority — 56 percent — of BSCs surveyed by Contracting Profits plan to vote for McCain. However, McCain is not conservative enough for some, especially for Frank Denman, owner of Clear Impressions in Austin, Texas. Denman, who has pledged his vote for Obama, says McCain has lost his vote on two issues: the war in Iraq and immigration reform.

“It’s mostly an anti-McCain vote, basically,” says Denman. “McCain’s stand on these has essentially been identical to the Democrats. In my opinion, if Republicans essentially duplicate Democratic policy, then we no longer have a Republican party. We have no conservative party, we have no Republican party, we have nothing. If that’s their idea getting elected, we don’t need two Democratic parties.”

McCain, by all accounts, will be less aggressive in pulling troops out of Iraq than Obama and will have a similar plan to deal with immigration. Both candidates are promising to tighten the borders and get tough with employers who ignore employee verification regulations. Immigration reform needs to be addressed at the core of the issue with a policy that treats all immigrants the same and gives no preferential treatment to Mexicans that results in a single demographic that becomes a voting block, according to Denman.

Brendan O’Brien is a freelance writer in Greenfield, Wis.