[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                        FULL COMMITTEE MARKUP ON 
                 VIEWS AND ESTIMATES OF THE SBA BUDGET 
                          FOR FISCAL YEAR 2010 

=======================================================================

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             MARCH 11, 2009

                               __________

                    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 111-009
Available via the GPO Website: http://www.access.gpo.gov/congress/house

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                   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
                        PARKER GRIFFITH, 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                TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois          MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois               GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
PARKER GRIFFITH, Alabama

                                 ______

                    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               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
PARKER GRIFFITH, Alabama

                                 (iii)

  


               Subcommittee on Regulations and Healthcare

               KATHY DAHLKEMPER, Pennsylvania, Chairwoman


DAN LIPINSKI, Illinois               LYNN WESTMORELAND, Georgia, 
PARKER GRIFFITH, Alabama             Ranking
MELISSA BEAN, Illinois               STEVE KING, Iowa
JASON ALTMIRE, Pennsylvania          VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania             GLENN THOMPSON, Pennsylvania
BOBBY BRIGHT, Alabama                MIKE COFFMAN, Colorado

                                 ______

     Subcommittee on Rural Development, Entrepreneurship and Trade

                  HEATH SHULER, Pennsylvania, 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


Prepared Statements:
Velazquez, Hon. Nydia M..........................................     4
Graves, Hon. Sam.................................................     6

Statements for the Record:
A letter to the Honorable John M. Spratt, Chairman of the Budget.
Committee, expressing the views and estimates of the Small 
  Business.......................................................
Committee with regards to the fiscal year 2010 budget for the 
  Small Business Administration..................................     8

                                  (v)

  


                        FULL COMMITTEE MARKUP ON
       VIEWS AND ESTIMATES OF THE SBA BUDGET FOR FISCAL YEAR 2010

                              ----------                              


                       Wednesday, March 11, 2009

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:02 p.m., in Room 
2360, Rayburn House Office Building, Hon. Nydia M. Velazquez 
[Chair of the Committee] presiding.
    Present: Representatives Velazquez, Moore, Schrader, 
Lipinski, Sestak, Halvorson, Graves, Bartlett, Westmoreland, 
Luetkemeyer, and Coffman.
    Chairwoman Velazquez. I am pleased to call this morning's 
markup to order.
    Today, the Committee will consider its views and estimates 
of the Small Business Administration's fiscal year 2010 budget. 
These resources mark a critical first step in helping 
entrepreneurs weather the recession and strengthen our weakened 
economy.
    Recognizing the vital role that small businesses play in 
economic recovery, the Committee proposes a budget of $1.43 
billion, which is approximately what it was for the agency at 
the end of the Clinton administration.
    In the interest of being fiscally responsible, we are 
recommending that six underperforming programs be discontinued. 
Doing so will free up funds for more cost-effective, results-
driven initiatives. It would also allow us to make the most of 
our budget, which will accomplish a great deal, not only by 
funding SBA's core programs but by continuing the fee 
reductions contained within the Recovery Act.
    Entrepreneurs everywhere have been affected by restricted 
lending and tightening credit. Our budget will soften those 
blows by leveraging more than $29 billion in loans and 
investment to small firms. It will also mark $1.1 billion in 
disaster assistance resources.
    Under the new Recovery Act, the Federal marketplace is more 
vibrant than ever before. It is critical that small businesses 
have a fair shot at winning stimulus contracts, and our budget 
will ensure that that happens. We will do this by directing 
nearly $70 million in funding for targeted contracting 
programs. A large part of that money will go towards bolstering 
procurement center representatives and commercial marketing 
representatives, both of which promote small business 
participation in the Federal marketplace.
    It is no secret that our economy is struggling. But with a 
renewed emphasis on entrepreneurial development, contracting 
initiatives, and small business lending, we can start turning 
it around.
    This is vital because entrepreneurs have a proven record of 
creating jobs and stemming recessions. Following the downturn 
of the mid-1990s, an overwhelming number of laid-off workers 
went on to start their own firms. This wave of entrepreneurship 
pumped billions of dollars into the economy. We can replicate 
that kind of growth today but not without increased resources 
for small business programs.
    The budget we are proposing will breathe new life into the 
SBA. More importantly, it will fully fund SBA's ED programs, 
providing entrepreneurs with the resources they need to not 
only survive the recession but to get our economy moving again. 
I urge support of the Committee's views and estimates.
    And I will now yield to Mr. Graves for any comments that he 
may have on them.
    Mr. Graves. Thank you, Madam Chair. And I want to thank you 
for holding this markup today on the Committee's views and 
estimates of the President's proposed Small Business 
Administration budget for fiscal year 2010.
    Normally this markup involves an assessment of the proposed 
budget for the Small Business Administration for the upcoming 
fiscal year. However, the information supplied to this 
Committee amounts to a page and a half of analysis, laying out 
the levels of loan guarantees that will be available in the 
2010 fiscal year.
    This submission makes it impossible for this Committee to 
exercise its responsibility to advise the Budget Committee on 
the adequacy of the SBA's budget. I am sure that all members of 
the Committee are displeased at the lack of information 
provided in the budget submission.
    Even the data provided isn't useful. It simply adopts for 
the next fiscal year the overall guarantee levels for loans 
that the SBA will provide. Given the significant decrease in 
SBA lending activities, I find it difficult to believe that the 
goals set forth in the budget will be achieved. Nor does the 
submission explain how the agency will achieve the goals it has 
set forth for providing capital to America's small businesses.
    Finally, the budget submission fails to explain how the SBA 
will provide assistance to small businesses that want to enter 
the Federal procurement arena, a component of the economy that 
appears to be set to continue to grow.
    In a time when small businesses are starved for capital, 
the proposed budget will increase the deficit and make small 
businesses compete against the Federal Government and larger 
businesses to obtain that capital. No business can compete with 
the ability of the Federal Government to obtain capital, and 
this will raise interest rates, effectively increasing costs 
for small businesses at just the wrong time.
    Compounding that problem is that, to sustain the increased 
Federal spending in the budget, revenue will have to rise, and 
that means tax increases on small businesses. While some of 
these may be cleverly hidden, such as caps on carbon emissions, 
they nevertheless represent additional costs to small 
businesses and revenue diverted from business growth.
    Furthermore, the budget document misses an opportunity to 
directly address the needs of affordable health care for small 
businesses. Without affordable health care, businesses face the 
choice of not providing it or providing it and possibly 
bankrupting the firm because of cost of insurance.
    In conclusion, the little information provided in the 
budget submission raises troubling questions about the ability 
of small businesses to do their part to help America through 
the economic turmoil. And while I certainly respect the 
Chairwoman's passion and devotion--incredible devotion to small 
businesses--I cannot concur with the proposed budget views. And 
I will be filing some separate estimates and views with the 
Budget Committee.
    Thank you.
    Chairwoman Velazquez. Thank you.
    Are there any other members that wish to go recognized on 
the views and estimates?
    The Committee now moves to consideration of the views and 
estimates of the Small Business Administration's fiscal year 
2010 budget.
    The Clerk will report the title of the document.
    The Clerk. "A letter to the Honorable John M. Spratt, 
Chairman of the Budget Committee, expressing the views and 
estimates of the Small Business Committee with regards to the 
fiscal year 2010 budget."
    [The information is included in the appendix.]
    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?
    Seeing no amendments, the question is on agreeing to views 
and estimates.
    All those in favor, say, "Aye."
    All those opposed, "No."
    The ayes have it, and the views and estimates are agreed 
to.
    At this point, I would like to yield to Mr. Graves for a 
motion.
    Mr. Graves. Thanks, Madam Chair.
    I would move to allow the minority to file their own 
separate views.
    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 markup is now adjourned.
    [Whereupon, at 1:10 p.m., the Committee was adjourned.]

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