[Congressional Record Volume 147, Number 52 (Tuesday, April 24, 2001)]
[Senate]
[Pages S3829-S3831]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         SMALL BUSINESS AMENDMENT TO THE 2002 BUDGET RESOLUTION

  Mr. KERRY. Mr. President, I submit a statement for the Record 
regarding a small business amendment I offered to the fiscal year 2002 
budget resolution with my colleague, Senator Bond, on April 6, 2001.
  First, let me extend sincere thanks to my colleagues for supporting 
this amendment which restored critical funding to the Small Business 
Administration's finance and management assistance programs that help 
start and strengthen small businesses in our country. Second, let me 
correct the Record to reflect all the cosponsors:
  Senators Bond, Bingaman, Wellstone, Landrieu, Daschle, Leahy, 
Johnson, Schumer, Collins, Levin, Snowe, Harkin, Conrad, and Domenici.
  My apologies to Senators Conrad, Domenici, and Harkin who were not 
listed in the Record when the amendment passed. Again, thank you to all 
my colleagues for agreeing to this amendment and showing their support 
for our small businesses.
  I ask unanimous consent that a copy of the amendment and the summary 
along with all the letters of support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                           amendment no. 183

 (Purpose: To revise the budget for fiscal year 2002 so that the small 
 business programs at the Small Business Administration are adequately 
funded and can continue to provide loans and business assistance to the 
 country's 24 million small businesses, and to restore and reasonably 
      increase funding to specific programs at the Small Business 
 Administration because the current budget request reduces funding for 
  the Agency by a minimum of 26 percent at a time when the economy is 
volatile and the Federal Reserve Board reports that 45 percent of banks 
have reduced lending to small businesses by making it harder to obtain 
                  loans and more expensive to borrow)

       On page 21, line 15, increase the amount by $264,000,000.
       On page 21, line 16, increase the amount by $154,000,000.
       On page 43, line 15, decrease the amount by $264,000,000.
       On page 43, line 16, decrease the amount by $154,000,000.
       On page 48, line 8, increase the amount by $264,000,000.
       On page 48, line 9, increase the amount by $154,000,000.
                                  ____

       Purpose: To amend the budget for fiscal year 2002 so that 
     the small business programs at the Small Business 
     Administration are adequately funded and can continue to 
     provide loans and business assistance to the country's 24 
     million small businesses. It is necessary to restore and 
     reasonably increase funding to specific programs at the SBA 
     because the current budget request reduces funding for the 
     Agency by a minimum of 26 percent at time when the economy is 
     volatile and the Federal Reserve Board reports that 45 
     percent of banks have reduced lending to small businesses by 
     making it harder to obtain loans and more expensive to 
     borrow.
       All funds are added to Function 376, which funds the SBA 
     for FY 2002.


                            credit programs

       $118 million for 7(a) loans, funding an $11 billion program
       $26.2 million for SBIC participating securities, will 
     support a $2 billion program
       $750,000 million for direct microloans, funding a $30 
     million program
       $21 million for new markets venture capital debentures, 
     funding $150 million program
       Total request for credit programs = $166 million


                          non-credit programs

       $4 million for the National Veterans Business Development 
     Corporation
       $10 million for Microloan Technical Assistance, total of 
     $30 million
       $30 million for the Small Business Development Centers, 
     total of $105 million
       $30 million for New Markets Venture Capital Technical 
     Assistance
       $15 million for the Program for Investment in 
     Microenterprise
       $7 million for BusinessLINC
       $1.7 million for Women's Business Centers, bringing total 
     to $13.7 million
       $250,000 for Women's Business Council, bringing total to $1 
     million
       Total request for non-credit programs = $98 million
       Total request for credit and non-credit programs = $264 
     million
         The National Association of Government Guaranteed 
           Lenders, Inc.,
                                    Stillwater, OK, April 5, 2001.
     Hon. John F. Kerry,
     U.S. Senate, Washington, DC.
       Dear Senator Kerry: I am writing on behalf of NAGGL's 
     nearly 700 members in support of your amendment, number 183, 
     to the Budget Resolution that would revise the proposed 
     budget for the Small Business Administration in fiscal year 
     2002. Specifically, your amendment would restore $264 million 
     to the SBA's budget in fiscal year 2002 of which $118 million 
     is earmarked for the agency's 7(a) guaranteed loan program. 
     We strongly believe it is in the best interest of small 
     business that your amendment be adopted.
       The present budget proposes no fiscal year 2002 
     appropriations for the 7(a) loan program and instead proposes 
     to make the program self-funding through the imposition of 
     increased fees. The previous SBA Administrator testified 
     before the House Small Business Committee last year that the 
     7(a) program was already being run at a ``profit'' to the 
     government. This statement was confirmed in a September 2000 
     Congressional Budget Office report entitled ``Credit Subsidy 
     Reestimates, 1993-1999.'' Unfortunately, the budget as 
     currently proposed would, in our view, have the effect of 
     imposing additional taxes by increasing program fees. This 
     result would be ironic given the Administration's push for 
     tax cuts.
       A recent survey of NAGGL's membership, who currently make 
     approximately 80 percent of SBA 7(a) guaranteed loans, shows 
     that if the budget were adopted as proposed, most lenders 
     would significantly curtail their 7(a) lending activities. 
     Therefore, small businesses would find it more difficult and 
     expensive to obtain crucial long-term financing. The proposed 
     budget would increase the lender's cost of making a loan by 
     75 percent and would increase the direct cost to the borrower 
     by 12 percent. Any fee increase is unacceptable when the 
     program is already profitable for the government.
       The small business consequences of a slowdown in 7(a) 
     guaranteed lending are manifold. Currently, according to 
     statistics available from the Federal Deposit Insurance 
     Corporation and the SBA, approximately 30 percent of all 
     long-term loans, those with a maturity of 3 years or more, 
     carry an SBA 7(a) guarantee. This is because lenders 
     generally are unwilling to make long-term loans with a short-
     term deposit base. Therefore, reducing the availability of 
     7(a) capital to small businesses will have a significant 
     effect on them and on the economy.
       The average maturity for an SBA 7(a) guaranteed loan is 14 
     years. The average conventional small business loan carries 
     an average maturity of one year or less. For those

[[Page S3830]]

     conventional loans with original maturities over one year, 
     the average maturity is just three years. The majority of SBA 
     7(a) borrowers are new business startups or early stage 
     companies. The longer maturities provided by the SBA 7(a) 
     loan program give small businesses valuable payment relief, 
     as the longer maturity loans carry substantially lower 
     monthly payments.
       For example, if a small business borrower had to take a 5 
     year conventional loan instead of a 10 year SBA 7(a) loan, 
     the result would be a 35%-40% increase in monthly payments. 
     The lower debt payments are critical to startup and early 
     stage companies. Small business loans, where they can be 
     found, would have vastly increased monthly payments. This at 
     a time when the economy appears to be struggling and when 
     bank regulators have spurred banks to tighten credit 
     criteria, the current budget only proposes to worsen the 
     situation for small business borrowers.
       Your amendment would help mitigate this problem. It would 
     provide small businesses far better access to long-term 
     financing on reasonable terms and conditions at a time when 
     their access to such capital is critical. We urge your 
     colleagues to support your initiative and adopt your 
     amendment.
           Respectfully,
     Anthony R. Wilkinson.
                                  ____

                                             U.S. Hispanic Chamber


                                                  of Commerce,

                                    Washington, DC, April 5, 2001.
     Hon. John F. Kerry,
     Ranking Member, Senate Small Business Committee, Russell 
         Senate Office Building, Washington, DC.
       Dear Senator Kerry: We write in support of the Kerry/Bond 
     Amendment to restore $264 million of the proposed cuts to the 
     Small Business Administration's (SBA) budget. We further 
     support the amendment's proposal to have these funds come out 
     of the contingency fund and not the tax cut or the Medicare/
     Social Security trust fund. Your amendment would ensure that 
     the small business programs at the SBA are adequately funded 
     and continue to provide loan and business assistance to 
     Hispanic-owned small businesses in this country.
       The United States Hispanic Chamber of Commerce (USHCC) 
     represents the interest of approximately 1.5 million 
     Hispanic-owned businesses in the United States and Puerto 
     Rico. With a network of over 200 local Hispanic chambers of 
     commerce across the country, the USHCC stands as the 
     preeminent business organization that promotes the economic 
     growth and development of Hispanic entrepreneurs.
       The SBA programs that are currently in jeopardy of losing 
     funds have been extremely instrumental in helping our 
     Hispanic entrepreneurs start and maintain successful 
     businesses in the United States. Without these programs, the 
     Hispanic business community will suffer huge setbacks to the 
     strides we have been able to achieve over the years. It is 
     therefore necessary to restore and increase funding to these 
     programs so that the Hispanic business community will 
     continue to experience economic growth and success in this 
     country.
       We support your efforts and urge other members of the 
     Senate to support the Kerry/Bond amendment in restoring these 
     necessary funds to the SBA.
           Respectfully submitted,
                                                   Maritza Rivera,
     Vice President for Government Relations.
                                  ____

                                             Independent Community


                                           Bankers of America,

                                    Washington, DC, April 5, 2001.
     To: Members of the U.S. Senate.
     From: Independent Community Bankers of America.
     Re: ICBA support the Kerry-Bond amendment to preserve small 
         business loan programs and to prevent new fees.
       On behalf of the 5,300 members of the ICBA, we support the 
     Kerry-Bond amendment to the FY 2002 budget and urge all 
     Senators to join in support of this important bipartisan 
     amendment. The amendment to be offered by Senators John Kerry 
     (D-Mass) and Christopher Bond (R-Missouri) would prevent new 
     hidden taxes in the form of additional fees imposed on small 
     business lenders and borrowers. The proposed FY 2002 Budget 
     pending in the Senate would levy significant new fees on the 
     SBA 7(a) loan program. These increased fees would jeopardize 
     needed lending and credit to small business at the worst 
     possible time as our economy has slowed dramatically and 
     small business lending has become more difficult. Therefore, 
     the Kerry-Bond amendment would restore the appropriation for 
     the 7(a) small business loan program and prevent onerous new 
     fees from being levied on borrowers and lenders.
       This amendment shares bipartisan support. The Chairmen and 
     Ranking Members of the Senate Small Business Committees 
     oppose new taxes on small businesses in the form of higher 
     loan fees. Specifically, Small Business Committee Chairman 
     Chris Bond and Ranking Member John Kerry have asked for the 
     $118 million appropriation to support the 7(a) loan program 
     to be restored in the FY 2002 Budget. The ICBA applauds the 
     bipartisan efforts of Senators Kerry and Bond in offering 
     their amendment.
       We urge every Senators' support for the Kerry-Bond 
     amendment so that small businesses have continued access to 
     needed credit and that the 7(a) loan program is not 
     devastated by taxing new fees.
                                  ____

                                     Association of Small Business


                                          Development Centers,

                                                        Burke, VA.
     Hon. John F. Kerry,
     Ranking Minority Member, Senate Small Business Committee, 
         Russell Senate Office Building, Washington, DC.
       Dear Senator: We wish to commend you for prosing an 
     amendment to the Budget Resolution calling for the 
     restoration of funding for the Small Business Development 
     Center (SBDC) and 7(a) Guaranteed Loan Programs. During this 
     period of economic downturn, it is even more important 
     that funding for these two critically important programs 
     not be compromised as hundreds of thousands of small 
     businesses will need management and technical assistance 
     and long term debt financing more than ever.
       As for the SBDC Program specifically, we are proud to 
     report that the most recent impact survey of the program 
     found that in one year SBDC's helped small businesses create 
     92,000 new jobs, generate $630 million in new tax revenues, 
     increased by 67,000 the number of entrepreneurs counseled 
     above previous levels, and provided training to more than 
     84,000 small business owners than were trained during the 
     last reporting period. In all, over 750,000 small business 
     and preventure clients received SBDC assistance in the last 
     fiscal year. And that was during good economic times.
       Your seeking funding of $105,000,000 for the SBDC Program 
     is bipartisan as Senator Kit Bond, Chairman of the Senate 
     Small Business Committee in his Views and Estimates letter to 
     the Senate Budget Committee called for the same funding 
     level. Likewise Senator Bond opposed any funding cut for the 
     7(a) Guaranteed Loan Program. Both recommendations we 
     applaud.
       We also understand that your amendment would restore 
     funding for the New Markets and PRIME programs. This 
     association has taken no formal position regarding funding 
     for these well intended programs.
       Thank you for soliciting our views. We appreciate your 
     leadership regarding these two outstanding SBA programs.
           Sincerely,
                                                 Donald T. Wilson,
     Director of Government Relations.
                                  ____



                                                   Wesst Corp,

                                   Albuquerque, NM, April 5, 2001.
     Hon. John F. Kerry,
     U.S. Senate, Washington, DC.
       Dear Senator Kerry: On behalf of the Association of Women's 
     Business Centers, I am writing to voice our full support for 
     the amendment you have introduced (#183) which would provide 
     adequate funding for the Small Business Administration's 
     programs targeted to lending and business assistance.
       As you know, the SBA programs serve the credit and business 
     development needs of women, minorities, and low-income 
     entrepreneurs all across the United States and Puerto Rico. 
     It is absolutely critical that these programs, particularly 
     the Women's Business Centers Program, the Microloan Program, 
     PRIME, and the National Women's Business Council, receive the 
     funding you have recommended in your amendment so that 
     existing and emerging entrepreneurs throughout the country 
     continue to have opportunities to realize the American dream 
     of business ownership.
       As an advocate for tens of thousands of women business 
     owners across the country, the AWBC applauds your vision and 
     leadership in helping to ensure that these critical SBA 
     programs continue to serve the entrepreneurial and credit 
     needs of the American people.
       We look forward to working with you in the months ahead to 
     ensure the passage of this amendment.
       Thank you very much for your ongoing support.
           Sincerely,
                                                     Agnes Noonan,
     Chair, AWBC Policy Committee, Executive Director.
                                  ____

                                        The Association of Women's


                                              Business Center,

                                        Boston, MA, April 5, 2001.
     Hon. John F. Kerry,
     U.S. Senate,
     Washington, DC.
       Dear Senator Kerry: As the President of the Association of 
     Women's Business Centers (AWBC), I am writing on behalf of 
     the 80+ Women's Business Centers who have been funded by the 
     Small Business Administration's Office of Women's Business 
     Ownership. We write to support your amendment #183 to 
     increase funding for the SBA programs and, in particular, to 
     fund the Women's Business Center Program at $13.7 million.
       The President's budget only provides level funding of $12 
     million for the WBC program, which is inadequate at this time 
     as women are continuing to start two-thirds of all new 
     businesses. Clearly, we need an increase in funding at this 
     time to continue to ensure that we are keeping pace with this 
     fast growth and providing services to as many women business 
     owners as possible.
       Thank you very much for your continued support and advocacy 
     on our behalf.
           Sincerely,
                                                Andrea C. Silbert,
           President, AWBC, and CEO Center for Women & Enterprise.

[[Page S3831]]

     
                                  ____
                                                  Houston, TX,

                                                    April 5, 2001.
     Senator John Kerry,
     Washington, DC.
       Dear Senator Kerry: Since I work with small business owners 
     every day to help them obtain the financing they require to 
     start a new business, acquire a business or expand an 
     existing business, I wanted you to know that I strongly 
     support you and your efforts regarding Amendment 183.
       Thank you for your continued good work.
           Sincerely,
     Chairman Rosales.

                          ____________________