Garrett addresses regulations, economy during visit to Ho-Ho-Kus business
Oct 21, 2011 Issues: Budget, Economy and Jobs
During a visit to Kevin's Thyme Fine Catering and Café on Wednesday, Oct. 19, Rep. Scott Garrett, R-NJ,
discussed the 'absurd' new regulations hurting small businesses, as well as a new jobs initiative.
Above, Garrett (center) talks to Kevin's Thyme owners Pat Kelly (left) and Kevin Oppici.
During a visit to Kevin's Thyme Fine Catering and Café on Oct. 19, Rep. Scott Garrett, R-NJ, said uncertainty created by new regulations is hurting small businesses.
The vice chairman of the House Budget Committee, who was on a tour of businesses in his North Jersey district, said entrepreneurs could have an easier time getting loans if recently enacted laws were repealed.
When regulators ask banks to write down performing loans that are "underwater," they are no longer in a position to make new loans, Garrett said. Banks also have concerns with the 2,300 page Dodd-Frank financial reform bill.
"What I'm trying to do ... is to try to stop some of the madness that happened last year, and undo some of the absurd bills," Garrett said.
Banks, credit unions and investors haven't determined what the new regulations will mean for them, he said. "Until they do, they're saying 'We're not going to invest. We're not going to lend money into new projects.'"
This has a trickle down effect on local businesses, Garret said.
Kevin Thyme's owners Pat Kelly and Kevin Oppici, said that they are concerned about the state of the economy, unemployment, rising commodity costs, recent flood damage to costumers properties and the availability of small business loans.
They started the catering business six years ago, but had extra space and added a café, which has "taken off," Kelly said. The catering business still drives its profits, but fewer people can afford to throw parties because of a slowing economy.
Oppici said that expanding capital for businesses through tax breaks or helping them secure loans at lower interest rates could go a long way toward helping their business grow.
"We want to expand our place, but it's going to cost a lot of money," said Oppici, noting that he'd like to add more space for tables. "Banks aren't giving out loans."
Kelly added that taking on debt to pay for improvements means the business needs to sell "a lot of turkey sandwiches."
Garrett said that if banks were less worried about regulations, they would be more willing to give out loans. But banks also see more prospective foreclosures in the works.
"Banks are hesitant and don't want to foreclose on them, but at some point they're going to and that's going to perpetuate the depression, recession in the housing market," he said.
Kelly said she's worried because when people are losing their houses, "they're not going to have a party."
Garrett said he understood their struggles, and that people are also cutting back on eating out at restaurants.
"Catering's down at least 30-35 percent," Kelly said. "And I basically think people just are not confident in the economy."
Customers are also are cutting back on use of service staff, chefs and bartenders, she added.
At the same time Oppici said higher food prices are squeezing the business. Even slight increases add up when buying thousands of pounds of food, he added.
"The cost of everything's gone up," said Oppici, noting that he's seen an estimated 20 percent increase in his commodity prices in recent years for things like grain, wheat and poultry.
Fish and produce costs are also up because of the weather, Kelly said.
"Everything goes up but people's salaries right now," she added.
Garrett said that there are a lot of reasons behind increased food and commodity prices in a post event interview.
"But the one that comes to mind is our Federal Reserve policy of printing money," he said. "A lot of experts are warning that you're going to see inflation across the board including in your commodities. When you print money, the effect is the most heinous of all taxes."
Garrett said that the country needs a jobs initiative to get money in people's pockets.
"We're still at nine-plus percentage unemployment, and if you don't have a job, you're not going to come out and spend," Garrett said.
People that used to come to the restaurant once per week are now coming twice a month, Kelly said.
Garret said that the Republican majority in the U.S. House of Representatives would not support the president's jobs plan.
"His own party doesn't like it," Garrett said. "So we in the majority in the house are saying 'Your own party doesn't want it. We want to work with you. Give us something that we can work with.'"
Merchant fees from credit card companies have also increased costs for the business, and more customers are using them to obtain incentive points.
"We used to have a lot of cash in this business," Kelly said. "At least 75 percent of our business is credit cards now."
She said she's paying an extra $1,000 a month in credit card fees because of the cards.
Garrett outlines plan
During a post event interview with Town Journal, Garrett addressed plans to create jobs in the state, the republican presidential primaries and recent flooding in the area.
"First I would try to fix the tax system because right now the tax code is so complex and has so many illogical deductions," Garrett said. "They should all be done away with, and then the tax rates should be lowered."
On the regulatory side, he said he would roll back new regulations put in place over the last few years. He said that complex regulations create uncertainty among business owners.
He said the country also needs to make reducing energy costs a priority.
"New Jersey has some of the highest energy costs, but the country's energy costs are really high as well," Garrett said. "Businesses actually leave New Jersey because of the price of energy."
Republican race
Garrett has not decided on a candidate to support in the 2012 republican primaries.
"I'm still like probably the majority of Americans who are looking at the debates and looking at the candidates and trying to figure out which one actually has the true fiscal conservative convictions and has a plan," Garrett said.
Flooding
Garrett said residents affected by recent flooding in the district frequently asked why the river wasn't dredged or cleared of fallen trees and garbage before the storms. He said that towns should be allowed to clear their rivers of trees and tires without spending several months obtaining permits.
He said that the response is always that there are many permits required from the state's Department of Environment Protection and the permitting process is "so costly and time consuming that nobody wants to go through the process ... That's got to be resolved."
