ACG leaders and members gathered recently in Washington, D.C., to celebrate the organization’s 60th anniversary and discuss issues of public policy affecting the middle market. Several government representatives spoke at the 3rd annual public policy summit, including Sen. Orrin Hatch (R-Utah), SEC’s David Blass, U.S. Department of Treasury’s Mary Miller, Rep. Jared Polis (D-Colo.) and Rep. John Delany (D-Md.). ACG’s influence on policy has been growing over the last few years. We asked Huron Capital Partners’ Gretchen Perkins, and ACG Global Board Member and co-chair of ACG’s Public Policy Committee, for an update on the organization’s policy initiatives.
What are the legislative issues of most importance to middle-market dealmakers in 2014?
Maintaining the deductibility of interest expense is important given the widespread negative impact a change in such would have to dealmakers, no matter where they play in the spectrum of corporate growth strategies, be they investors, corporations, lenders, attorneys, etc. The elimination of such has been proffered by a few legislators as part of their overall tax reform proposals, as a suggested source of revenue for the federal government. This would seriously hamper corporate growth, both from a business expansion and investment perspective and also from an acquisition perspective, as the use of debt to fund a prudent portion of the capital used for acquisitions is commonplace. Along the lines of leveling the playing field, an important issue to private equity firms is exempting middle market private equity firms from SEC registration requirements. Those requirements are not currently faced by other alternative asset investment vehicles, such as venture capital funds or family offices. More generally, removing ambiguity from existing regulations and the specter of proposed changes would certainly help businesses focus and adapt to changes, and to move forward with planning, investment, hiring decisions, etc.
What are ACG’s public policy initiatives this year?
ACG continues to focus on being the voice of the middle market with elected leaders and policy makers in Washington, D.C. This year, there is a particular focus on increasing awareness among the chapters and engaging in more formal grassroots to help our chapters establish relationships with their elected officials and strengthen ACG’s voice at the local level. In the remaining 113th Congress, ACG is also focused on the creation of a Middle Market Congressional Caucus. The caucus will pursue common policy goals and raise awareness on issues that affect the middle market. Small businesses enjoy dedicated representation and focus on their issues from the House and Senate Small Business Committees and the Small Business Administration, while large corporations enjoy representation from large industry trade associations and advocacy arms. Currently there is no group or body represented in Congress that is specific to the goals of middle market and we feel a congressional caucus will allow a platform to elevate research and data around the importance of the middle market and the contributions it brings to the strength of our economy.
What is the status of ACG’s becoming a lobbyist?
The process of ACG registering as a federal lobbying entity under the Lobbying Disclosure Act was a thoughtful one. Over the course of 2013, ACG Global took many steps to assess the notion of registering and how it would benefit ACG members and the middle market. In September, the global board of directors discussed and approved the concept. ACG Global filed its official registration in late November and is now an official federal lobbying entity and compliant with all lobbying requirements. This will allow us to more proactively speak out on legislative and regulatory issues that affect our membership, making us a more powerful advocate for our members in Washington.
What will ACG be able to do as a lobbyist that it couldn’t do before?
The registration process allows for more transparency and it allows ACG to be the official voice of the middle market by providing more proactive and formal comments on specific legislation and policy decisions and how they impact the middle market. We aim to be a resource for policymakers as they consider various legislative items that affect the middle market.
For more on ACG's plans for 2014, see "Twitter Co-Founder Biz Stone and Mobile App for Meetings Modernize InterGrowth 2014."