[Congressional Record Volume 155, Number 26 (Monday, February 9, 2009)]
[Senate]
[Pages S2032-S2035]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             SMALL BUSINESS

  Ms. LANDRIEU. Mr. President, I have a great deal of respect for the 
Senator from Iowa. He has served with such distinction in this body. 
However, I have to rise to say that while he is sincere in his opinion, 
I am very proud that 61 Senators cast a vote for the opposite view; 
that view being that the failed policies of the past were just that, 
failed, and have left America wanting.
  We have a very serious economic crisis that is not going to be solved 
by the same old tired, failed, bankrupt policies as part of what the 
Senator expressed continues to want to carry out--policies that give 
untargeted tax cuts to those at the top of the tax bracket and hope and 
pray that it trickles down to everyone else; policies that empower the 
individual at the expense of the collective effort, and other policies 
that have left this country wanting. That is why 61 Senators came to 
the floor of the Senate and rejected those old notions and set a new 
course. Our President, with his election and now his leadership since 
that election, is leading us to adopt new strategies; a collective 
energy, recognizing that individuals alone cannot, no matter how 
individually empowered, build the highways and infrastructure necessary 
or transform the economy in a new way that can be invigorating and 
hopeful to the American people who are in desperate need of a new 
course.
  So I wished to come to the floor, though, to briefly speak about some 
of the things that are in the underlying bill we voted on to invoke 
cloture that have to do with small business: expanding it, highlighting 
it, focusing on small business. Before I do that with my colleague, 
Senator Snowe, my good friend from Maine, let me also mention it is my 
hope, as this bill moves through the process of conference, that the 
House Members and the Senate Members, along with the President and the 
administration, can give a bit more focus on the infrastructure 
portions of this bill. It is something I think the Presiding Officer, 
Democrats, and Republicans have said: If the bill was light in 
anything, it may be light on the infrastructure piece. That is not to 
say that not a lot of good effort has gone into that, but perhaps we 
could make the bill stronger, which it has gotten, in my view, stronger 
at every step. Whether it is highways, waterways, high-speed rail, 
flood control, wetlands, coastal restoration, help with sewer and 
water, broadband, transformation of our electric grid, and, yes, 
investing in the infrastructure of science and technology in this 
country, we are woefully behind.

  So I am hoping--one final point on that and then I will get to our 
colloquy on small businesses in a minute--I am hoping our Governors, 
Republican and Democratic alike, will take this as it is intended: an 
opportunity to help them balance their ships of State as we move 
through these rocky and rough waters over the next 12 to 18 months; 
that they take this money in the spirit it was given: to be a partner 
with them and the mayors and county commissioners, and in my State, 
parish officials, to help keep people employed, to help target this 
effort to where we can create the kind of jobs people most certainly 
need.
  One of the best parts of the debate this weekend and one of the most 
moving was when Barbara Boxer, and then again today Byron Dorgan, put 
the picture of the 1,000 people in line for 35 firefighter jobs. I wish 
to remind my friends on the other side that people don't want speeches, 
they want jobs. If 1,000 people line up for 35 firefighter jobs, that 
is what this bill is intended to do.
  It leads me to the colloquy Senator Snowe and I wished to come to the 
floor to engage in about the underlying bill and some of the advantages 
and provisions this bill has for small business.
  First, let me thank the Senator for her leadership over the years as 
a chair and ranking member of this important committee. Let me also 
acknowledge the great leadership in recent years of Senator John Kerry, 
the chairman of the Small Business Committee. Particularly in regards 
to this particular bill, working out some bipartisan provisions that we 
could include, I wish to thank Senator Durbin and his staff who worked 
closely with us.
  I wish to begin my brief colloquy with a statement that might be 
surprising to some who are listening, that 40 percent of all the 
capital in the country for small business, basically, comes through or 
touches the Small Business Administration. That is how important this 
small department of only 2,000--it used to have 3,000 people--it was 
terribly, and unjustifiably, in my view, cut under the previous 
administration. I wish to acknowledge that Senator Snowe has been a 
fierce and effective advocate. In the case of those cuts, she argued, 
sometimes successfully and sometimes not, those cuts shouldn't take 
place. Nonetheless, the Presiding Officer has started a small business 
that turned into a large business, and he knows that one of the great 
challenges right now is access to capital and affordable capital. We 
are not talking about access to being able to use a credit card at 21 
percent or 15 percent. That is not affordable capital. We are not 
talking about mortgaging your house only to watch the value fall by 50 
percent. We are talking about things that could really spur the flowing 
of the capital markets in this country.
  Briefly, in the underlying bill we voted cloture on, we have 
eliminated the fees associated with the 504 economic development 
program, the 7(a) program, and the 504 program.
  Lending is down by 40 to 60 percent, depending on the State. In 
Louisiana, we are down 60 percent. We think by eliminating these fees, 
it may spur banks to lend money and borrowers to come forward for this 
access to capital.
  For over 50 years, the SBA's lending programs provided critical 
financing to small business owners who could not get affordable loans 
in the conventional market. In the wake of the financial crisis and 
this recession/depression, the SBA loan programs have not filled the 
void left by increasingly tight markets for conventional bank loans. We 
hope some of the provisions in this bill will help reduce that trend.
  The fee waivers supported by the U.S. Chamber of Commerce and other 
business groups are very encouraging by the results when we did this 
the last time, after the 9/11 attacks--what that might mean to spur 
economic growth in this country in the next few months and years to 
come.
  Let me also mention that in the underlying bill, we specifically 
targeted microloans. This might also be surprising to many, but the 
microloan program provides very small loans--on average about $13,000 
per loan. That seems to be very small, but sometimes I think we get 
caught up in billions and billions and we forget that sometimes $5,000, 
or $10,000, or $20,000 is all it takes to get a good idea off the 
ground and to help create jobs in America.
  I want to say, since so many Government programs get a bad rap and a 
black eye, this program--in large measure, my colleague from Maine 
helped to start it in 1992--the microloan program has been one of the 
most successful programs to date, having just one loss in its 18-year 
history, just one loss. Microloans are made to the smallest of 
businesses, typically home-based businesses, startups, newly 
established or small businesses. The program has always also been a 
great way to meet the needs of minority women and rural small business 
owners.
  The final part of this bill I want to mention before turning it over 
to my colleague is the venture capital funds that will also stimulate 
the flow of venture capital to emerging small businesses by providing 
flexibility for participants in the SBA's Small Business Investment 
Company programs, SBIC programs, which have been successful. The 
language in the underlying bill will give them the flexibility to even 
be more successful. The occupant of the chair knows, Virginia's economy 
is growing and being spurred by new investment in small business. The 
Chair has had, as Governor of that State, a

[[Page S2033]]

front-row seat. These are some of the things we have put in the 
underlying bill.

  I will mention one final item. The good Senator from Maryland, Ben 
Cardin, secured on the floor of the Senate, in addition to the work we 
had done originally on this proposal, a surety bond amendment, which 
was passed by a pretty overwhelming vote in the Senate, which will help 
small businesses secure--particularly in the areas of construction--
those surety bonds that will enable them to be part of this new 
stimulus package.
  I am proud of the work we have done. Again, if it can be improved in 
conference, I would be open to that.
  I would like to turn the final part of this presentation over to the 
good Senator from Maine for comments about the financing portion, as 
well as some other portions I spoke about.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maine is recognized.
  Ms. SNOWE. Mr. President, I commend my colleague, Senator Landrieu, 
from Louisiana, the new chair of the Small Business Committee. I am 
confident that she is going to champion small businesses and the 
critical role they play in our Nation's economy. I look forward to 
joining forces with the Senator from Louisiana. She is going to be an 
effective and eloquent advocate on behalf of the men and women who make 
up the millions of small businesses across this country, which are the 
lifeblood of our Nation's economy.

  One of the things we learned during the aftermath of Hurricane 
Katrina is that over 85 percent of businesses in Louisiana were small 
businesses. Similarly, in my home state of Maine, over 97 percent of 
all businesses are small businesses. So we understand the imperative of 
doing everything we can to reinforce and leverage the resources we have 
at the Federal level to support the engine of our economy; and that is, 
of course, America's small businesses. They are too often overlooked, 
Mr. President, in the role they play in our Nation's economy and in 
their job creation potential--creating two-thirds of all net new jobs 
in America.
  At a time of cataclysmic job loss, we have to look to small 
businesses to spur economic growth. I am concerned because I have taken 
many street tours across my State, and have seen first hand what we are 
seeing unfold all across America, small businesses closing their doors. 
So I know that we must do everything conceivable to reinforce, and 
bolster the resources of the Small Business Administration, to help it 
make a difference in creating jobs.
  Frankly, all too often small businesses are overlooked, unrecognized, 
and not acknowledged for the indispensable role they play in driving 
our Nation's economy. Nationally, unemployment is at 7.6 percent. In 
the past 4 weeks, more than 2.3 million people have filed new claims 
for jobless benefits. Those losses will only cascade even further if 
small businesses are unable to access the capital needed to help them 
start, grow, and expand their operations. It is one of the issues I am 
working on as we speak. Certainly, through the Troubled Asset Relief 
Program and with the respective Federal agencies, I think we should 
have a phone line so small businesses can call to find out how we can 
match up their needs for lending with banks and financial institutions 
across this country.
  As we speak, we are finding that more and more small businesses are 
unable to get the lines of credit they need to continue to carry on 
their business. Certainly, in a multiseason State such as Maine, people 
cannot do some things during the course of the winter, but they want to 
maintain their workforce and are unable to because they cannot access 
the line of credit that is indispensable to survival. There are a 
number of things we can do at the Federal level, much of which is 
included in this stimulus plan pending before the Senate.

  I agree with my colleague, Senator Landrieu that we must focus upon 
initiatives that are crucial to creating jobs. After all, when 
everybody talks about the stimulus plan, how to evaluate it, as I said 
last week, we need to create a rigorous standard by which we measure 
job creation in this legislation. It is absolutely essential in 
building the confidence that this stimulus plan will work.
  The way to do that is to look at some of the provisions targeted 
toward the small businesses, which will play a key role in our economy. 
When you realize that firms with fewer than 500 employees comprise 99 
percent of all businesses in America. And according to the SBA, small 
businesses have greater potential to recover faster than larger 
businesses during the course of a recession. But small businesses are 
fighting for survival.
  That is why Senator Landrieu and I worked to ensure that key 
initiatives were included into this bill, which will be critical for 
small business success during these very difficult economic times. We 
collaborated on these initiatives because we know that they are 
paramount to securing a robust future for small businesses.
  SBA lending numbers are in a free fall. That is demonstrated in 
several of the charts I have here. The 7(a) loan volume has dropped 
from over $3.2 billion to under $2 billion, respectfully, compared to 
the same quarter last year. In terms of percentage impact, that is a 
43-percent decline. For startup 7(a) loans, the numbers are just as 
bad. Nationally, startup loans are down over 40 percent, when compared 
to the first quarter of fiscal year 2008 to the current fiscal period.

  In Maine, for example, if you look at 7(a) lending, it has declined 
by nearly 69 percent for the first quarter of fiscal year 2007, 
compared to this quarter of fiscal year 2009. That is why it is 
absolutely urgent that we make sure the initiatives that are included 
in the Senate-passed version of the stimulus plan are maintained and 
preserved in conference. They will go a long way toward addressing and 
minimizing many of the problems small businesses face.
  For example, Senator Landrieu and I worked in tandem on some of these 
key initiatives, which include those to reduce or eliminate fees for 
504 and 7(a) loans, for instance. This is a departure from the approach 
taken in the House but, frankly, reducing these fees will provide a 
greater incentive for both small businesses and lenders to participate 
in the program, rather than just increasing the guarantee, which is 
reflected in the House-passed version of the stimulus plan.
  We will also be able, through supporting these programs, to reduce 
the cost of SBA loans for borrowers. These SBA loans will help to 
create or retain 750,000 jobs.
  Additionally, we have included provisions to increase funding, as 
Senator Landrieu indicated, for the SBA's vital microloan program. 
These microloans are not only easy to process, they are effective and 
accessible to small businesses. Again, these loans have demonstrated 
time and again their job creation value and potential. We have improved 
the venture capital program and increased the size of loans that small 
businesses can take under the SBA's 7(a) and 504 lending programs. 
Another key component is the automation of the SBA's loan processing, 
which must be improved. It would be easier for lenders, particularly 
small ones and those in rural areas, to participate in the loan 
programs because, increased automation will result in increased usage 
of these key programs. Most critically, this automation would reduce 
the regulatory burden on small businesses. In fact, the SBA Office of 
Advocacy has determined that the cumulative annual cost of Federal 
regulations to small businesses is more than $1 trillion. So automation 
would take a step toward reducing that burden, and it would make a 
tremendous difference for many in my State, in Louisiana, and across 
the country.

  As a member of the Finance Committee, I also want to highlight key 
tax provisions in the stimulus plan. Again, I express my gratitude to 
Senator Landrieu for her advocacy of these initiatives because they are 
essential. The first is an extension of Section 179 Small Business 
Expensing at the $250,000 level for 2009 and 2010. That has 
demonstrated--repeatedly in the past--to create jobs. We need to use 
proven programs, like this, in the stimulus that have job creation 
value.
  I am very pleased that level of $250,000 will be extended both in 
2009 and 2010 so that small businesses can make investments in plant 
and equipment that they can deduct immediately. In 2005, the most 
recent year

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for which data was available, according to the IRS, more than 4.5 
million small businesses claimed the section 179 expense deduction. 
These are 4.5 million job-creating engines, which this provision could 
assist at this difficult time in America.
  The other provision, of course, is the 5-year net operating carryback 
of losses which will allow companies to use these losses against prior-
year profits to gain immediate tax refunds.
  Thank you, Mr. President, for allowing me to speak about these key 
small business provisions in the stimulus bill. As we focus our 
attention on this stimulus package, we have to measure each and every 
initiative by its job-creation capabilities and as a catalyst for 
creating those jobs. As Senator Landrieu indicated, there is no greater 
catalyst for job creation in this country than small businesses. I have 
often stated that we have ignored and overlooked their tremendous 
potential.

  The stimulus package, which is pending before the Senate, will 
bolster small businesses through a variety of initiatives. I am pleased 
we were able to incorporate these provisions, through the support of 
Senator Landrieu and many members of the Senate Finance and 
Appropriations Committees and particularly Senators Baucus and 
Grassley, Finance Committee chair and ranking member, and Senators 
Inouye and Cochran, Senate Appropriations Committee chair and ranking 
member. Thank you to all of those who realized how vital these 
initiatives will be to creating jobs. I hope that in the conference 
committee these initiatives will be preserved because at the end of the 
day, this package will be measured in terms of its ability to jump-
start this economy. And we know that small businesses will be on the 
front lines of job recovery, if given the resources and the ability to 
do so.
  Again, I thank my colleague from Louisiana for being such a critical 
advocate and for her leadership on the Small Business Committee. I am 
looking forward to working with her in the future.
  Mr. President, I yield the floor.
  Ms. LANDRIEU. Mr. President, if my colleague will yield for a moment, 
I want to mention as we close, I am so happy and excited about the 
President's nominee for the Small Business Administration. I had the 
opportunity to meet her for the first time today.
  I ask my colleague from Maine, who is actually very familiar with 
this nominee, and she is from Maine, if the Senator would share a word 
or two about the particular qualifications of this nominee as we get 
ready to start this process. Through the Chair to my friend from Maine, 
it is indicative of the President's focus and his interest and his 
understanding by giving us such a quality nominee to consider.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. SNOWE. Mr. President, I appreciate that Senator Landrieu has 
raised for discussion the tremendous credentials that are offered by 
Karen Mills. There is no question that she has a tremendous background 
both in manufacturing and venture capitalism and in understanding the 
role that small businesses play in our Nation's economy.
  She has had firsthand experience, not only through her family's 
business endeavors, but also through her work in venture capitalism in 
helping to shape and rebuild various businesses. She understands and 
appreciates the resources that are necessary and essential to 
rebuilding businesses and the access to capital that is required.
  Also, she played a pivotal role in Maine's economy, in encouraging 
the use of cluster development. She has worked extensively with the 
Brookings Institute on how to nurture cluster development in various 
small and rural communities, to help rebuild and reshape their local 
economies.
  What we have recognized, and what she has certainly demonstrated time 
and again through her own personal firsthand experience, is that it 
does not take a lot of resources to nurture and create small businesses 
as a foundation for a local economy. It is that type of experience she 
will bring to the Small Business Administration.
  In fact, I had the opportunity to meet with her this afternoon as she 
prepares for the confirmation hearing. There is no question that she 
has widespread knowledge on what it will take to rebuild the Small 
Business Administration helping it to be far more responsive and 
receptive to small businesses, to understand what they need, to link 
them up with lenders, to provide the technology required to make the 
agency much more effective and responsive to the needs of small 
businesses across the country.
  I am looking forward to working with Ms. Mills and the chair of the 
Small Business Committee because I believe that Ms. Mills is 
outstanding in her capabilities and truly appreciates the role small 
businesses play in America's economy. Mr. President, I ask unanimous 
consent to have a biography of Ms. Mills printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  Biography of Ms. Karen Gordon Mills

       Ms. Karen Gordon Mills is the President of MMP Group, Inc. 
     Previously, she was the Co-Founder and Managing Director at 
     Solera Capital. Before founding MMP Group, she was the 
     Managing Director and Chief Operating Officer of the 
     Industrial Group for E.S. Jacobs and Co., from December 1983 
     to January 1993. In this role, Ms. Mills personally led seven 
     leveraged buyout transactions and had an influential or board 
     role in six others: Ms. Mills background includes consulting 
     for McKinsey and Co. both in the U.S. and in Europe, and 
     working as a Product Manager for General Foods. She has been 
     a Director and Member of Audit and Compensation Committees of 
     Arrow Electronics Inc. since 1994 and Director and Member of 
     its Audit Committee of ArmorAll Products Inc. since 1994. Ms. 
     Mills serves as Director of Latina Media Ventures LLC, 
     Triangle Pacific Corp. since 1988, Annie's Homegrown Inc., 
     Scotts Company, and Guardian Insurance Company. Ms. Mills 
     chairs Governor Baldacci's Council on Competitiveness and the 
     Economy. She also sits on the Governor's Council for the 
     Redevelopment of the Brunswick Naval Air Station, which 
     recently went on the BRAC closure list, and serves on the 
     Boards of the Maine Technology Institute and the Maine Nature 
     Conservancy. Ms. Mills is a member of the Council on Foreign 
     Relations and has been Vice Chairman of the Harvard 
     Overseers. Ms. Mills has an A.B. in Economics from Radcliffe 
     College, Magna Cum Laude. She also holds an M.B.A. from 
     Harvard Business School where she was a Baker Scholar.

  Ms. LANDRIEU. Mr. President, I thank the Senator for her testimony in 
regard to Karen Mills and will commit as the new chair of this 
committee to move her nomination through with dispatch.
  I will say before I give closing remarks, a word to banks and credit 
unions, particularly community banks, that I am intent in a leadership 
position on this committee to have the SBA be a better partner to 
community banks and credit unions as we really leverage the power of 
the SBA. Too often in the past, it has been seen as a problem or too 
complicated or too bureaucratic. I am looking forward to making that a 
much smoother, more powerful, muscular partnership so that our small 
businesses in America can have a model, the best in the world. It is 
going to be exciting to work on.
  I thank the Senator from Maine and look forward to having a very 
strong partnership with her in the months ahead.
  Is there any further business?
  Ms. SNOWE. Mr. President, one other issue that is critical, which 
Senator Landrieu and I both share, is that of elevating the Small 
Business Administration to Cabinet-level status. As I have said before, 
this will underscore the critical role that small businesses play in 
our economy. I know Chair Landrieu shares and supports such an 
initiative. It is long overdue and unquestionably should be done. We 
should elevate the status of the agency to give it the prominence and 
profile it deserves on behalf of the men and women of our Nation's 
small business community. There should be far more focus upon the role 
that they can serve in not only our domestic marketplace, but the 
global marketplace as well.
  I will continue to call for the elevation of this critical position. 
I have advocated it for years. In light of where we are today in the 
economy, and the increase in unemployment, it is even more imperative 
that we increase the prominence of small businesses in the President's 
cabinet because, again, doing so will provide the attention and 
resources they require to survive and be prosperous.
  Ms. LANDRIEU. Mr. President, I agree with the Senator from Maine. I 
was happy to join with her in a letter to the President urging him to 
take this step. Hopefully, he will consider that request and give it 
every consideration.

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