Small Businesses Stoke Anti-Incumbent Fever

Nov. 2, 2010— -- Massachusetts resident Frederick Muzi says he doesn't believe in government bailouts and hopes his vote against incumbent Rep. Barney Frank, a fixture in the House for nearly 30 years, expresses that.

Muzi, whose family has owned a Chevrolet and Ford car dealership in Needham, Massachusetts, for 75 years, even opposed the federal government's bailout of General Motors last year. He would have preferred GM enter bankruptcy without government sponsorship.

"They made mistakes, let them pay for it," said Muzi about General Motors. "It would have hurt us as a Chevy dealer, but we would have dealt with it."

For the closely-watched Massachusetts congressional race, Muzi is voting for Republican Sean Bielat against Democrat Frank. Muzi believes Frank, chair of the financial services committee, is responsible for the crash of the economy because of his support of the auto-bailout and the government takeover of Fannie Mae and Freddie Mac to shore up the soured mortgage markets.

Muzi is one of many business owners who say too much government and the auto and financial bailouts have only exacerbated the economy. "If the economy goes, then our business and our family will go," said Muzi. "It's up to us to cope with whatever economic conditions there are, but it's a lot better when the economy is right."

The troublesome economy is why some small business owners are voting against incumbent politicians and ushering in new, conservative faces, often backed by local Tea Party groups.

The National Federation of Independent Businesses, a lobbying association, decided to endorse Bielat over Frank because of his voting record on what it believes are key issues for small businesses.

"Mr. Frank opposes us on all major issues," said Lisa Goeas, vice president for political operations of the Federation. These issues include healthcare and the Employee Free Choice Act, which Goeas said would force small business owners to recognize unions without a secret ballot. "And he's for 'cap and trade' and President Obama's healthcare reform bill, which represents billions of new taxes and fees by small business owners."

Goeas said the Federation has about 800 members in Rep. Frank's district who will most likely be voting for Bielat instead because he has been "very vocal on tax and spend issues" and a "more user-friendly tax code."

"He has a very influential position but he hasn't chosen to use it to the advantage of small business," she said.

That comment from small business owners seems to be echoing across the country on the eve of a major re-balancing of Congress. Political pundits, like Robert Reich, say the Tea Party may lead to the removal of heavily entrenched candidates like Frank.

"By fueling the Republican surge in the midterm elections, the Tea Party has become the single most powerful force in the GOP," wrote Reich in an editorial piece for the Wall Street Journal on Friday. "It's backing at least 14 Senate candidates, both challengers and incumbents, and is playing a significant role in scores of House races."

But Reich, public policy professor at the University of California at Berkeley and labor secretary under Bill Clinton, said business owners should fear the uncertainty these unknown candidates bring.

"First, to the extent businesses are genuinely concerned about policy uncertainty in the future, I would expect them to be quite worried about what Tea Party-backed candidates are endorsing," Reich told ABC News. "Many prominent Tea Party-endorsed candidates want to abolish the Federal Reserve, including leading Tea Partiers in the Senate, like Jim DeMint of South Carolina, want to get rid of the IRS."

Christen Varley, co-founder and president of the Greater Boston Tea Party, said it's a misconception that the Tea Party is an actual political party with a platform.

"There's so much misinformation. There's no national Tea Party platform to take down the Federal Reserve. Even Rand Paul talks about dismantling, not discontinuing, the Federal Reserve," said Varley of the candidate for senate in Kentucky known for his critical views about the monetary-policy setting body.

Still, some business owners are cautious about the new candidates and their untested platforms.

Bill Strazzullo, partner and chief marketing strategist at Bell Curve Trading in Freehold, New Jersey, and a Massachusetts resident, said he would be "shocked" if a well-entrenched incumbent like Frank lost in the election, despite the concerns of business owners about high taxes and the uncertainty of financial and healthcare reform.

Strazzullo said extreme campaign rhetoric like calling for the abolition of the Federal Reserve is often a symbolic stump speech to catalyze change in Congress. And more importantly, the election is not as important to business owners as the Federal Reserve's Wednesday meeting. The Fed's monetary policy is expected to involve pumping new money into the economy and buying billions of dollars of Treasury bonds.

"No matter how the results turn out, there's going to be some kind of relief that this week is over with," said Strazzullo.

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