[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
MARKUP ON VIEWS AND ESTIMATES
OF SBA BUDGET FOR FISCAL YEAR 2011
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
March 4, 2010
__________
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13
Small Business Committee Document Number 111-059
Available via the GPO Website: http://www.access.gpo.gov/congress/house
U.S. GOVERNMENT PRINTING OFFICE
55-265 WASHINGTON : 2010
-----------------------------------------------------------------------
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA M. VELAZQUEZ, New York, Chairwoman
DENNIS MOORE, Kansas
HEATH SHULER, North Carolina
KATHY DAHLKEMPER, Pennsylvania
KURT SCHRADER, Oregon
ANN KIRKPATRICK, Arizona
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
MELISSA BEAN, Illinois
DAN LIPINSKI, Illinois
JASON ALTMIRE, Pennsylvania
YVETTE CLARKE, New York
BRAD ELLSWORTH, Indiana
JOE SESTAK, Pennsylvania
BOBBY BRIGHT, Alabama
DEBORAH HALVORSON, Illinois
SAM GRAVES, Missouri, Ranking Member
ROSCOE G. BARTLETT, Maryland
W. TODD AKIN, Missouri
STEVE KING, Iowa
LYNN A. WESTMORELAND, Georgia
LOUIE GOHMERT, Texas
MARY FALLIN, Oklahoma
VERN BUCHANAN, Florida
BLAINE LUETKEMEYER, Missouri
AARON SCHOCK, Illinois
GLENN THOMPSON, Pennsylvania
MIKE COFFMAN, Colorado
Michael Day, Majority Staff Director
Adam Minehardt, Deputy Staff Director
Tim Slattery, Chief Counsel
Karen Haas, Minority Staff Director
.........................................................
(ii)
?
STANDING SUBCOMMITTEES
______
Subcommittee on Contracting and Technology
GLENN NYE, Virginia, Chairman
YVETTE CLARKE, New York AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon W. TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
______
Subcommittee on Finance and Tax
KURT SCHRADER, Oregon, Chairman
DENNIS MOORE, Kansas VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona STEVE KING, Iowa
MELISSA BEAN, Illinois W. TODD AKIN, Missouri
JOE SESTAK, Pennsylvania BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
______
Subcommittee on Investigations and Oversight
JASON ALTMIRE, Pennsylvania, Chairman
HEATH SHULER, North Carolina MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana LOUIE GOHMERT, Texas
(iii)
?
Subcommittee on Regulations and Healthcare
KATHY DAHLKEMPER, Pennsylvania, Chairwoman
DAN LIPINSKI, Illinois LYNN WESTMORELAND, Georgia,
MELISSA BEAN, Illinois Ranking
JASON ALTMIRE, Pennsylvania STEVE KING, Iowa
JOE SESTAK, Pennsylvania VERN BUCHANAN, Florida
BOBBY BRIGHT, Alabama GLENN THOMPSON, Pennsylvania
MIKE COFFMAN, Colorado
______
Subcommittee on Rural Development, Entrepreneurship and Trade
HEATH SHULER, North Carolina, Chairman
MICHAEL MICHAUD, Maine BLAINE LUETKEMEYER, Missouri,
BOBBY BRIGHT, Alabama Ranking
KATHY DAHLKEMPER, Pennsylvania STEVE KING, Iowa
ANN KIRKPATRICK, Arizona AARON SCHOCK, Illinois
YVETTE CLARKE, New York GLENN THOMPSON, Pennsylvania
(iv)
?
C O N T E N T S
----------
OPENING STATEMENTS
Page
Velazquez, Hon. Nydia M.......................................... 1
Graves, Hon. Sam................................................. 2
APPENDIX
Views and Estimates of SBA Budget for Fiscal Year 2011........... 5
(v)
FULL COMMITTEE MARKUP ON VIEWS AND
ESTIMATES OF SBA BUDGET FOR FISCAL YEAR 2011
----------
Thursday, March 4, 2010
U.S. House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building, Hon. Nydia Velazquez
[chairman of the Committee] presiding.
Present: Representatives Velazquez, Moore, Schrader,
Clarke, Bright, Halvorson, Graves, Westmoreland, Luetkemeyer
and Thompson.
Chairwoman Velazquez. I am pleased to call this morning's
mark-up to order.
Today the Committee meets to consider its views and
estimates of the Small Business Administration's Fiscal Year
2011 budget. This discussion comes at a time when the economy
is beginning to turn a corner. Most Americans, including the
President, are looking to entrepreneurs to maintain that
momentum. By providing robust funding for small business
programs, we can further that progress and keep our recovery
strong.
Needless to say, I was pleased to see President Obama boost
funding for the SBA. However, I have concerns about how that
money will be spent. As of now, 89 percent of SBA's new
resources will go to unauthorized programs and agency overhead.
This leaves a mere 2.6 percent increase for core programs.
It is my hope that through the adoption of these views, we
can change that trend and redirect funds to the programs that
entrepreneurs have always relied on.
Just as the downturn has forced small firms to make smart
choices, SBA should do the same. That means spending widely and
investing strategically. This is why we need to support
programs like the new markets venture capital, which is making
the government money. Even amidst the worst investment climate
in decades, that initiative which receives no funding in this
budget has managed to generate revenue for the Treasury,
helping reduce deficits.
But rather than providing any resources to NMBC, this
proposal instead invests in riskier ventures, like SBA Express,
which could cost taxpayers as much as $128 million FY 2011.
More than anyone, small business owners understand the
importance of fiscal restraint. The reviews before us take a
page from those entrepreneurs and do more than simply increase
spending. On the contrary, they offset new investment by
cutting unnecessary costs and terminating six under performing
programs.
Entrepreneurial development programs have a track record of
solid returns. In fact, every one dollar spent on these efforts
puts another $2.87 back into the Treasury. Most of these
programs, such as Small Business Development Centers are
catalysts for job creation. Unfortunately, the FY 2011 budget
will flat fund virtually all of them. It, instead, invests in
proven efforts like the Emerging Leaders Program, which does
essentially the same thing as SBDCs, only at twice the cost.
The end result is spending $6,000 on each job created when we
could do the same and spend only $3,000.
Everyone agrees we need to get capital flowing to small
businesses. In doing so, it is important for the lending
process to be as accessible as possible. While it is never a
good thing to increase costs on small business loans, this is
particular true during an economic downturn. So the agency's
proposed increase in lending fees is ill-timed, to say the
least.
In the last two years, we have seen considerable declines
in private industry. The one sector that has grown is the
federal marketplace. Between the years 2000 and 2008, it was
than doubled in size. Historically, the SBA's contracting
programs have helped business tap the expanding world of
opportunity. However, following a recent wage of fraud, not all
of these programs are running at full capacity.
The Committee is well aware of this problem and is making
fraud protection a top priority. However, the $2 million that
this budget suggests for fraud control will not even put a dent
in the $500 million in HUBZone and veteran disabled fraud the
GA0 has uncovered, let alone waste that hasn't been identified.
In these views, we provide the agency with a blueprint for
fighting fraud. That plan will insure only honest
entrepreneurs, not large corporations, receive small business
contracts.
After eight years of neglect, it is time to rebuild the
SBA, and the overall funding level proposed in the President's
budget is a welcome sign. But the agency needs to be judicious
in its spending. These views give the SBA the direction and
support it needs to make sound investments and promote its core
mission, strengthening our nation's small businesses.
I now will yield to Mr. Graves for any comments that he may
have.
Mr. Graves. Thank you, Madam Chair, and I want to thank you
for holding this mark-up today on the Committee's views and
estimates of the President's proposed SBAbudget for fiscal year
2011.
The President has repeatedly stated that small businesses
will lead our economic recovery. Yet the Committee continues to
hear reports that small businesses are unable to access
capital, have difficulty obtaining federal government contracts
and are hamstrung by ever increasing regulatory burdens. Small
Businesses simply cannot thrive under these conditions. The
soaring federal deficits are piling up as a result of
Washington's spending addiction further impeding economic
growth in America.
Unsustainable deficits can result in higher interest rates
that hit small businesses especially hard. As a result, the
businesses must devote more of their cash flow to larger
interest payments, making it less likely that they will have
the resources to hire employees or expand their operations.
Additionally the continued uncertainty about the future of
far reaching legislation, such as health care reform and the
proposed national energy taxes, all but have frozen business
expansion and job creation nationwide. Until entrepreneurs can
get an accurate idea of the new government regulations that lay
ahead, they are unlikely to invest in expanding their
enterprises.
In an effort to incentivize small business lending, the
administration has proposed reallocating $30 billion in return
TARP funds to establish a new small business lending fund.
Given our responsibility and legislative mandate under House
rules, the House Small Business Committee has an obligation to
hear directly from Treasury Secretary Geithner about this
proposal as he is the primary proponent and likely overseer of
this new small business lending facility. Secretary Geithner
must share with us the plans for the execution and the expected
results of this fund before it is established.
With respect to the SBA budget, I am particularly concerned
about the lack of resources that will be devoted to increasing
procurement opportunities for small businesses.
I recently introduced the Helping Small Businesses Compete
Act, a bill designed to improve the ability of small businesses
to obtain federal government contracts. It is imperative that
the SBA find ways within current resources to increase the
number of trained personnel that can find and review federal
procurement opportunities for small business owners. I
certainly respect some of the Chairwoman's well founded
criticisms of the budget, but I simply cannot concur with the
proposed budget views and estimates, and I will be filing a
separate set of views and estimates with the Budget committee.
And with that I will yield back.
Chairwoman Velazquez. Are there any other members who wish
to be recognized on the views and estimates?
[No response.]
Chairwoman Velazquez. Well, the Committee now moves the
consideration of the views and estimates of the Small Business
Administration FY 2011 budget. The Clerk will report the title
of the document.
The Clerk. The views and estimates for the Small Business
Administration's budget for Fiscal Year 2011.
Chairwoman Velazquez. I ask unanimous consent that the
views and estimates document in its entirety be open for
amendments at this time. Does any member seek recognition for
the purpose of offering an amendment?
[No response.]
Chairwoman Velazquez. Seeing none, the question is on
agreeing to the views and estimates. A those in favor say aye.
[Chorus of ayes.]
Chairwoman Velazquez. All those opposed, no.
[Chorus of nays.]
Chairwoman Velazquez. The ayes have it, and the views and
estimates are agreed to.
At this point I would like to yield to Mr. Graves for an
unanimous consent request.
Mr. Graves. I would request unanimous consent to file my
views on the budget estimate.
Chairwoman Velazquez. Without objection, so ordered.
I ask unanimous consent that the Committee be authorized to
correct punctuation and to make other necessary technical
corrections on the document considered today. Without
objection, so ordered.
This mark-up is now adjourned.
[Whereupon, at 10:14 a.m., the Committee meeting was
adjourned.]
[GRAPHIC] [TIFF OMITTED] T5265.001
[GRAPHIC] [TIFF OMITTED] T5265.002
[GRAPHIC] [TIFF OMITTED] T5265.003
[GRAPHIC] [TIFF OMITTED] T5265.004
[GRAPHIC] [TIFF OMITTED] T5265.005
[GRAPHIC] [TIFF OMITTED] T5265.006
[GRAPHIC] [TIFF OMITTED] T5265.007
[GRAPHIC] [TIFF OMITTED] T5265.008
[GRAPHIC] [TIFF OMITTED] T5265.009
[GRAPHIC] [TIFF OMITTED] T5265.010
[GRAPHIC] [TIFF OMITTED] T5265.011
[GRAPHIC] [TIFF OMITTED] T5265.012
[GRAPHIC] [TIFF OMITTED] T5265.013
[GRAPHIC] [TIFF OMITTED] T5265.014
[GRAPHIC] [TIFF OMITTED] T5265.015
[GRAPHIC] [TIFF OMITTED] T5265.016
[GRAPHIC] [TIFF OMITTED] T5265.017
[GRAPHIC] [TIFF OMITTED] T5265.018
[GRAPHIC] [TIFF OMITTED] T5265.019
[GRAPHIC] [TIFF OMITTED] T5265.020