[Congressional Record Volume 157, Number 42 (Monday, March 28, 2011)]
[Senate]
[Pages S1883-S1888]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SBIR/STTR REAUTHORIZATION ACT OF 2011
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of S. 493, which the clerk will
report.
The assistant legislative clerk read as follows:
A bill (S. 493) to reauthorize and improve the SBIR and
STTR programs, and for other purposes.
Pending:
McConnell amendment No. 183, to prohibit the Administrator
of the Environmental Protection Agency from promulgating any
regulation concerning, taking action relating to, or taking
into consideration the emission of a greenhouse gas to
address climate change.
Vitter amendment No. 178, to require the Federal Government
to sell off unused Federal real property.
Inhofe (for Johanns) amendment No. 161, to amend the
Internal Revenue Code of 1986 to repeal the expansion of
information reporting requirements to payments made to
corporations, payments for property and other gross proceeds,
and rental property expense payments.
Cornyn amendment No. 186, to establish a bipartisan
commission for the purpose of improving oversight and
eliminating wasteful government spending.
[[Page S1884]]
Paul amendment No. 199, to cut $200,000,000,000 in spending
in fiscal year 2011.
Sanders amendment No. 207, to establish a point of order
against any efforts to reduce benefits paid to Social
Security recipients, raise the retirement age, or create
private retirement accounts under title II of the Social
Security Act.
Hutchison amendment No. 197, to delay the implementation of
the health reform law in the United States until there is
final resolution in pending lawsuits.
Coburn amendment No. 184, to provide a list of programs
administered by every Federal department and agency.
Pryor amendment No. 229, to establish the Patriot Express
Loan Program under which the Small Business Administration
may make loans to members of the military community wanting
to start or expand small business concerns.
Landrieu amendment No. 244 (to amendment No. 183), to
change the enactment date.
The ACTING PRESIDENT pro tempore. The Senator from Louisiana.
Ms. LANDRIEU. Mr. President, I appreciate the opportunity the
leadership has provided for Senator Snowe and me to present S. 493 and
continue to discuss this important bill. It is a very important program
that has actually existed at the Federal level for 20 years. It is not
a household word, but it is known very well in the small business
community. It is supported by groups such as the Small Business
Association, the Chamber of Commerce, and many high-tech organizations
because they know the same thing we know, which is this is a very
important Federal program that actually works and is accomplishing its
mission.
It is a government/public-private partnership--a government-business
partnership--with the largest Federal agencies that actually set aside
a small portion of their research and development dollars. The amount
is actually relatively small; 2.5 to 3 percent of all of their
development and research dollars is set aside, and they aggressively
look for small businesses that are able to provide new services,
cutting-edge technology, new methodology, new software, to solve
problems the government is having.
In the process of these small businesses solving problems for the
government--i.e., the taxpayer--the great news is some new businesses
are developed, and they can then be commercialized into the private
market, which is how this program works, which is why it is so
beneficial not only to taxpayers but to the market generally.
I am excited because we have great evidence from the studies and the
surveys of this program that it is meeting and exceeding its
expectations. It is creating thousands of jobs. It is providing an
opportunity for small businesses to compete on a level playing field
with large businesses, and it is providing the taxpayer with some
cutting-edge technology and innovation.
Let me give one example which is close to my heart because we ran
into this problem specifically and directly trying to deal with the
aftermath of Katrina. This is just one example of the kinds of new
technologies that are being developed through this program. This bill,
which we hope will get passed this week if we can negotiate wisely and
smartly on the amendments pending, will reauthorize this program for 8
years. This is a long-term reauthorization, and it is important to send
a signal out to the market and to small businesses and to these
coalitions: We believe in this partnership. We know it can work. We
want to give a long lead time and an 8-year runway to lift off some of
these businesses and launch them and to create the kind of jobs and
entrepreneurial opportunity we know is out there.
This is just one example. A Huntsville, AL, company, GATR
Technologies, inflatable antenna--an inflatable antenna provides
emergency access, cell phone coverage and phone lines over satellite
networks. It was first used by responders in Haiti and Hurricane Ike.
It provides communication support to our Special Operations Forces, to
U.S. Navy, and U.S. Air Force. It so far has created 30 jobs but has
tremendous opportunity; last year, $7 million in sales and this year
approximately $10 million. This technology was launched with a $148,000
grant.
What happened to us in the aftermath of Katrina--and the Presiding
Officer may remember this--is that even the government's best satellite
phones failed to work. So even with a great evacuation plan in place,
with a great medical plan in place, with a great response plan in
place, it is not worth the paper it is written on if you can't
communicate it.
So what we found was when people landed with satellite phones, there
wasn't enough reception base on the ground to be able to communicate.
The technology has advanced significantly since then, but the same
thing happens when you are trying to get communications in a war-torn
place or a catastrophically destroyed place. This technology allows
basically a balloon to be put down onsite, substantially increasing the
communications capabilities.
This is just one example. So an agency had a problem. It couldn't
communicate. It didn't have the right kind of communication technology.
It puts out a small grant. Small business responds. This technology is
created. Potentially, this could go on to develop into quite a large
company. It might morph several times before it goes commercial, but
that is what this program does.
These jobs are being created in Huntsville, AL. We are thrilled for
Alabama. Jobs are created through this program in every State in the
Union.
Here is another example. This is a small business from Watertown, MA.
It is the A123 lithium-ion battery. The advanced lithium-ion battery is
used widely for transportation power grid and commercial and industrial
products. It opened the largest lithium-ion battery manufacturing plant
in North America, in Michigan, a place where we need to be creating
jobs. This program is doing exactly that. It has created more than 400
jobs across the State of Michigan.
I think this grant initially came out of the Energy Department. The
technology was initially developed at MIT, but the road to commercial
success was paved in 2002 when this company was awarded $100,000 for a
small business innovation research grant. So this successfully
leveraged this SBIR grant to take this lab and its product to the
market. It employs now more than 2,000 people globally and has
facilities around the world.
So this is creating jobs for America, new technology for America, but
the world is benefiting from this. In fact, Senator Snowe has joined me
on the Senate floor, and she will remember when we had testimony from
our consultant, Dr. Weissman, who testified that actually as the chief
reviewer of this program, he has been asked to speak in many different
countries about its success.
So while people are trying to eliminate government programs that
aren't working, let's make sure this week in the Senate we take the
opportunity to reauthorize programs that are working and that are
creating jobs at home and serving as a model for entrepreneurship
development all over the world.
I see Senator Snowe is on the floor, so I am going to wrap up my
opening remarks soon. I do want to review briefly. As I said, this
program was designed in 1982 to harness the innovative capacity of
America's small businesses to meet the needs of our Federal agencies.
Senator Warren Rudman from New Hampshire had a great part to play as a
lead sponsor of this bill.
To date, the Small Business Innovation Research Program and the Small
Business Technology Transfer Program have produced more than 85,000
patents and have generated tens of thousands of well-paying jobs across
all the 50 States, in addition to creating jobs overseas that are a
benefit to America as well. This is a good return on the investment we
make for our economy. As I said, it has garnered high praise from well-
respected sources and governments around the world. It is an 8-year
authorization.
In this bill, we update the award sizes, which have not been changed
since 1994. Phase I awards will be increased from $100,000 to $150,000;
phase II, from $750,000 to $1 million. We adopted the House measure
that allows the SBA to update these award guidelines annually instead
of every 5 years. We also put certain amounts of caps on some of the
awards to make sure as many businesses as possible get access to these
awards. This is merit-based. This is not a formula distributed based on
applications. These are based on the quality of the application, the
promise of the technology, and also on the level of need the agency has
for this kind of new technology.
[[Page S1885]]
As I said, it creates a Federal-State technology partnership program.
It improves the SBA's ability to oversee and coordinate these programs.
It provides some administrative funding, which we thought was lacking,
to make sure the agencies themselves have the wherewithal and the
expertise to really get this program maximized in its job-creation
potential. The reason I think this is so important--and Senator Snowe
and I have been almost singly focused on doing everything we can,
leading this Small Business Committee, across party lines and together,
Democrats and Republicans--is to try to put this recession behind us.
This is a fight. This is not something that will happen naturally. It
is going to be by this government in Washington and at the State and
local levels creating atmosphere for businesses to prosper and jobs to
be created.
I have to say I was very pleased to get a copy of the ``Kaufman Index
on Entrepreneurial Activity,'' which I will submit a portion of for the
record. I think people will be pleased to hear its opening paragraph,
as follows:
In 2010, .34 percent of the adult population, which is 340
out of 100,000 adults, created a new business each month.
That means that in America, 565,000 new businesses were created each
month in 2010, approximately. That is pretty extraordinary. Every
month, 565,000 new businesses were launched. We know all of them don't
succeed, but some of them do, and some of them grow to be huge,
extraordinary companies. QualComm comes to mind, and Microsoft comes to
mind. They started as small businesses and grew. The 2010
entrepreneurial activity rate was the same as 2009, but it represents a
substantial increase from 2007 and, most significantly, represents the
highest level over the past decade and a half.
I wish I could say this particular program was responsible for all of
this, but obviously it is not. But it is one of the tools the Federal
Government has, along with our contracting and procurement tools, along
with our Tax Code, along with our other incentives that we passed in
our last small business bill--the new $30 billion lending program,
which is leveraged up to 300 and potentially could leverage up to $300
billion in lending to small businesses on Main Street, not Wall
Street--getting money to small businesses, these 565,000 small
businesses that are started every month by great Americans who are
trying to provide a livelihood for themselves, opportunities for their
families, and strength for their communities. So for innovation and
jobs, fighting hard for them, we are trying to pass this
reauthorization that can contribute to this substantial growth. Things
are looking better. Trendlines are in a positive direction.
Let me show you some other growth lines that are very important. We
had a terribly substantial loss of jobs, as you know, in 2008 and 2009.
The President largely inherited this situation. He did not even take
office until half of this job loss was completed. But I think we have
been working together and the President has been leading a great effort
to turn this situation around and start creating jobs as opposed to
losing them. You can see this is a pretty dramatic turnaround. After
losing 3.6 million in 2008 and 5.5 million in 2009, we have had a net
increase of 1.3 million in 2010, with things looking promising in the
first quarter of 2011--still moving in a very positive direction. I
don't know what these projections are, but I think it will be greater
than 1.3 million, which was last year's increase, which would be
encouraging.
We have a long way to go to make up for the job loss of the great
recession. When Wall Street collapsed, the housing market, the real
estate market was terribly wounded. That is a story for another day.
But the good news is that it looks as if we are recovering.
The unemployment rate is still too high in too many places in this
country. That is why Senator Snowe and I are on the floor again this
week. That is why we are asking our colleagues to be as cooperative as
possible. We know there are so many issues people want to talk about,
and time is limited on the floor. In our minds, we should be almost
singularly focused on job creation and reducing the debt and closing
this deficit. By creating jobs and building businesses in the private
sector--and this is one program that absolutely hits this mark--we can
do all three. We can create jobs and expand economic opportunity. We
are making a dent in the debt, and we are closing the deficit gap by
creating new tax dollars that come in from hard-working Americans in
the private sector.
Mr. President, I am excited to present this bill again. We will have
a lot more information as the day unfolds. I understand we have a vote
on a different matter at around 5 or 5:30 today. Senator Snowe and I
will be on the floor to answer any questions Members might have. We are
not encouraging additional amendments. We already have 89 that have
been filed on this bill. We are hoping to get some of them withdrawn
that are not germane to the bill.
We will be working throughout the week, and hopefully together we can
give a very strong vote of confidence to entrepreneurs who are taking
extraordinary risks in very challenging times. The least we can do is
get the government programs that are there for them to support them up
and running and as strong as possible to help them in their quest to be
successful.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Maine is
recognized.
Ms. SNOWE. Mr. President, I am very pleased to join the chair of the
Small Business Committee to address the pending legislation before the
Senate, which is so essential to helping to revitalize our economy and
most especially the small business sector that is central to the job-
creation abilities in this country.
The programs that would be reauthorized in the legislation pending
before the Senate are extremely important to the ability of small
businesses to be engaged in innovation and advancement in our economy
and the businesses they are in. It helps to assist in the technology
and the entrepreneurial spirit that is so essential for America, which
has obviously been an innovative nation throughout our history.
The two pending programs before the Senate are very crucial. I hope,
like the chair, that we will be able to get to a point to consider the
remaining amendments the Senators may have to offer so that we can move
quickly and expeditiously to vote on the bill, so it can move forward
and ultimately become law. The SBIR and STTR programs have had a
longstanding history, most specifically with the SBIR Program,
regarding innovative research, which has been in law since 1982 because
it has been extremely worthwhile and beneficial. It has been the
subject of numerous reports essentially because it has been able to
produce jobs and the innovation that has advanced this Nation.
In fact, there are two assessments--one by the National Academy of
Sciences and another report from the Information Technology and
Innovation Foundation--both underscoring that it is imperative to
reauthorize these programs but also demonstrating their essential value
to our Nation's economy--most especially from the standpoint that, of
course, small businesses are the job creators.
Two-thirds of all new jobs in America come from small businesses.
Obviously, they represent more than 99.7 percent of the employers in
America. It is absolutely critical that we do everything we can to buoy
this segment of the economy. The more we procrastinate in moving this
legislation forward, the less likely we are going to see jobs created
in our economy and get this economy to move forward. Frankly, it is
critical, given the fact that we need to create more than 285,000 new
jobs per month for 5 years just to return to the unemployment levels we
were experiencing in 2007 at prerecession levels. We could be 10 years
away from normal unemployment and full recovery if we do not make
substantial strides in creating at least 285,000 jobs every month for 5
consecutive years and, most possibly, 8 consecutive years to achieve
5.5 percent unemployment rate. To achieve a 7-percent unemployment rate
would require us to create 300,000 jobs per month.
We experienced an uptick in job creation numbers last month of a
192,000, but that has been the exception, not the norm, over the last
2\1/2\ years. In fact, there are only 3 months in 2\1/2\ years in which
we have achieved those levels.
[[Page S1886]]
I am just underscoring how difficult it is going to be to create the
jobs we need in order to return to normal prerecession levels of
unemployment. That is why the pending legislation is so critical and
vital to this endeavor.
I wish to reiterate some of the anecdotal information that came to
the committee that, again, emphasizes the value of these programs.
Roland Tibbetts, the father of the SBIR Program, summed up its
purpose most vividly when he said that ``SBIR addresses a paradox at
the heart of innovation funding: capital is always short until the test
result are in. At the idea stage, and even the early development stage,
the risks are too great for all but a few investors. But innovations
can't get beyond that stage without funding.''
SBIR provides the funding for promising small firms, by directing
critical research and development funding within 11 critical agencies
within the Federal Government to perform the necessary testing and
assess the validity of an idea and subsequently commercialize the
product. As we know, small businesses are looking for the kinds of
initiatives that can provide the catalyst for creating that innovation.
It is all about taking risks. Risk means investment. There are few
opportunities in America now with respect to having access to early-
stage capital. The programs before us represent just that. It is
important for creating the middle-class jobs we need, and the fact is
that small and medium-size businesses really do the majority of the
hiring and firing, as Thomas Friedman noted in his book, The World is
Flat. When they are hiring people, the economy is robust. When they are
not, it is in recession, which is precisely what we are recovering from
currently.
We have to move these programs forward, and hopefully that
opportunity is going to come sooner rather than later. Hopefully, we
can accomplish that at the end of this week because I think it is
important to send the right message and a signal to give certainty and
stability that small businesses and medium-sized businesses are
desperately searching for.
Dr. Jacobs, cofounder of Qualcomm, who testified before our committee
in February, revolutionized the wireless communication industry. As we
both have noted earlier when we began debating this legislation, they
applied for $1.5 million in SBIR funding almost 25 years ago. Today
they have 17,500 employees. They paid approximately $1.4 billion in
taxes in fiscal year 2010, more than half the cost of the SBIR and STTR
programs annually.
Dr. Jacobs noted in his testimony that SBIR funding ``allowed us to
pursue several innovative programs that otherwise would not have been
possible.'' He went on to note that:
Cutting-edge research leads to breakthrough discoveries,
but in order for companies to attract private funding, they
need support to prove the feasibility of new and often risky
and unproven technologies. For Qualcomm, SBIR provided one
source of that critical start-up funding. . . . it was one of
the critical ``stamps of approval'' that allowed us to
successfully pursue sources of private capital.
Dr. Matt Silver, the cofounder of Cambrian Innovation, an
environmental product development firm from Massachusetts, informed the
committee that six SBIR awards--or, in his words, ``relatively small
grants''--enabled his company to attract angel and direct investment,
hire seven employees, file several provisional patents, and develop
relationships with the Massachusetts Institute of Technology and Penn
State for collaborative R&D, among other opportunities. His company's
story is a remarkable example of the success that can be garnered from
a relatively modest investment by Federal agencies in new and promising
technologies.
Additionally, 2 weeks ago, the House Small Business Committee also
held a hearings on these programs. I would like to briefly share some
quotes from the testimony of several witnesses.
Professor David Audretsch noted that the United States `` . . . is no
doubt more innovative, more competitive in the global economy and has
generated more and better jobs as a result of the SBIR'' Program.
Additionally, he summarized that ``The evidence accumulated from a
broad spectrum of studies utilizing divergent methodologies all comes
to the same result--the SBIR program has unequivocally made an
invaluable contribution to the innovative performance of the United
States.''
There are a number of specific examples of how the SBIR Program has
contributed to the vitality of our economy and how it has advanced the
technological developments that have occurred in America.
Furthermore, the Government Accountability Office has reviewed
different aspects of the SBIR Program over the course of its history
and has come to a number of positive conclusions. Specifically, the
2005 GAO report on the program summarized that, one:
SBIR is achieving its goals to enhance the role of small
businesses in federal R&D, stimulate commercialization of
research results. . . .
. . . more than three-quarters of the research conducted
with SBIR funding was as good as or better than any agency-
funded research. Agency officials also rated the research as
more likely than other research they oversaw to result in the
invention and commercialization of new products--
And--
The SBIR program successfully attracts many qualified
companies, has had a high level of competition, and
consistently has had a high number of first-time
participants.
Combining those assessments that I have just cited with the National
Academy of Sciences's landmark 2008 study, which I have spoken about
earlier, SBIR and STTR clearly provide remarkable benefits to the
American people. But also there is a larger picture for the Nation's
entrepreneurs and job creators.
Small businesses are facing a veritable confluence of challenges from
all sides these days, whether it is exorbitant costs through more taxes
or crippling tax burden and regulations. There are a number of
amendments pending before the Senate that I think would be vital to
enhancing that dimension of helping our small businesses with respect
to fighting burdensome regulations.
That is why Senator Coburn and I have introduced a regulatory reform
bill we hope we will offer as an amendment to the pending legislation
because we think it is important to address the numerous regulations
that have imposed significant burdens on a number of businesses across
this country.
If we just look at the average cost to small businesses in America, a
business with 20 or fewer employees pays $10,585 per employee in annual
regulatory costs. That is 36 percent higher than larger firms.
Additionally, our Tax Code is so complex that taxpayers and businesses
spent 7.6 billion hours and about $140 billion trying to comply with
tax-filing requirements in 2008.
I do believe it is important we make strides in the regulatory arena
because it is clear that small businesses cannot move forward having to
comply with not only the additional costs but also the burden because
there are so few employees in a small business. They are saddled with
incessant and unnecessary paperwork, as we saw demonstrated with the
1099 filing requirement that was included in the overall health care
law.
As we all know--and we are almost in unanimous agreement that we
should repeal that onerous provision, but we have not reached that
point. Hopefully, we will with respect to our legislation. We know
Senator Johanns has filed an amendment to the pending bill, but we want
to address that issue because it has provided a burdensome impact on
small businesses across the country, even though it has yet to be
enforced because it is not required until 2012.
The point is, businesses are already calculating the cost of having
to comply with that paperwork. Because of the additional costs, because
they do not know the extent to which it is going to add to the cost of
their bottom lines, they are hesitant about hiring new individuals or
making investments in capital equipment.
The sooner we can address this issue, the sooner we can repeal it and
resolve the outstanding issues in terms of how we are going to pay for
it, the sooner small businesses can understand the certainty with
respect to this individual provision.
As I have conducted numerous street tours in my State, I can tell you
this is the one issue that comes up repeatedly because, for every small
business, they
[[Page S1887]]
are starting to calculate how many forms they will have to submit to
the IRS for every $600 in business transactions. Not only is that
paperwork burdensome but also it is going to add additional costs, not
to mention, obviously, the fact that we are going to hire thousands
more in Internal Revenue Service agents just to comply with this
particular mandate.
I hope we can tackle this major problem and bring it to a final
conclusion with respect to resolving this issue and to repeal it once
and for all. It is regrettable it has taken so much time to get to this
point. I know we worked mightily to address this issue, but clearly it
is not sustainable for small businesses. I am hopeful we can move
forward with this effort to repeal this provision and this requirement
that clearly will represent, I think, a major step forward in
understanding the dimensions small businesses are facing in today's
environment.
As I stand here with my colleague, the chair of the Small Business
Committee, I hope we can proceed to passing this legislation. I urge
Members to come to the floor if they have amendments to begin to
address those issues so we can advance this legislation at the
conclusion of this week because I do think it is in the best interest
of the small business community but, more importantly, it is also in
the best interest of our Nation's economy, given the fact that we have
to create jobs, and that obviously is not happening to the degree
people deserve in this country.
There are a number of agencies that will be part of the scope of this
legislation that will be setting aside the research and development
dollars that play a critical role in innovation. It does not require
additional funding. It is based on existing research and development
dollars that are already appropriated to these agencies. But it is
saying: Let's set it aside for small businesses to make sure they can
have one piece of the pie when it comes to research and development
because that is where we derive most of the innovation and the
entrepreneurship--from the small business sector of our economy. Not
only can it add jobs in America but, ultimately, as we saw with the
example of Qualcomm, we can add to the dimensions of growth
exponentially for decades to come.
This is a generational issue as well because we know we have to take
the small steps to ultimately reach the large developments that can
occur with the initial investments that are taken even with a modest
sum of money. We know that is true in biotechnology, for example, which
takes 10 to 15 years to bring a drug online. It can require millions,
if not billions, for pharmaceuticals to do that.
Again, the SBIR Program has been essential and central to that
effort. That is why the Biotechnology Industry Organization and the
National Venture Capital Association also support this legislation
because it can provide the initial boost that is a catalyst for the
development of major drug therapies in this country.
Dr. Charles Wessner, who authored the landmark National Academy of
Sciences report, underscored in his testimony to our committee about
the SBIR Program and highlighted the work the SBIR Program created as a
result of these investments. He said:
The program brings in over a third new companies every
year. This is really extraordinary. It is not captured by a
small group. Twenty percent of the companies are created
because of the awards, bringing things out of the research
community into the market, its core function. It encourages
partnership with the university community. . . . Almost 50
percent of the firms that get awards reach the market.
These numbers, again, demonstrate the incredible role the SBIR
Program plays in our Nation's capacity to innovate. That is essentially
why it was created at the outset. If we look historically as to when
the SBIR Program was created, it was in 1982. I was an original
cosponsor of that legislation when I was serving in the U.S. House of
Representatives. But it coincided as well during a similarly difficult
economy. In fact, at that time, we were in the midst of a recession.
Now we are struggling to emerge from a recession and trying to create
jobs. The same was true at that point in time. In fact, we were at the
height of it.
Dr. Jere Glover, who has served as the chief counsel at the SBA's
Office of Advocacy, testified before our committee. He concluded:
Twice before, we have seen the President and Congress look
at the situation where we are coming out of severe recessions
and decide that the SBIR program was important. President
Reagan in the early Congress in 1982 decided that this was an
important thing to do to create jobs, to help grow innovation
and technology. Again in 1992, Congress doubled the SBIR
program, with the support of President Bush. So we have seen
recognition in the past, when you are in a severe economic
time, it is time to call on small business innovation.
He urged us to do that now. I concur with his call for us to use this
opportunity to reauthorize these critical programs that will jump-start
our Nation's economy through small business and talents they bring to
bear when it comes to innovation. It is something we certainly need in
our economy today and our country. More important, it is just not
reauthorizing a program simply for reauthorizing it or because it has
been on the books but because it works, and it has demonstrated it has
worked repeatedly throughout the history of both these programs. That
is why I urge the Senate to move as quickly as possible to adopt these
bills so they can become law.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Louisiana.
Ms. LANDRIEU. Mr. President, I will follow up with a few brief
comments. The transition is important and worth noting. I am so glad
Ranking Member Snowe made reference to the fact that the two of us are
on the floor not just to reauthorize because it is the time for
reauthorization but because this program works, because it is cost-
effective, and because it actually is a job creator. It creates jobs in
the private sector, not necessarily the public sector, although there
are some public sector jobs associated with it that are crucial and
important--people in the agencies working on identifying this new
technology. But the lion's share of these jobs by far is being created
in the private sector.
I wish to show what our challenge is.
Here you can see both President Bush and President Obama faced
extraordinary challenges. This is the Monthly Changes in Private
Payrolls, Seasonally Adjusted from January 2008, when this recession
began, until today. You can see it is absolutely a dramatic loss of
private payroll, reductions in private payroll. This represents
substantial job losses.
But as you can see, it is just now, in April 2010-July 2010, and now
to the present, to February of 2011--I know we are into March but this
doesn't have the final month or two on here--we are making tremendous
progress in turning this around. Again, this is the Monthly Changes in
Private Payrolls. This represents the teeth of the great recession that
caught so many businesses, large and small, off guard.
There are many reasons why this recession happened, and the collapse
of our financial markets, but that is not the subject of this debate.
What is the subject of this debate is how we get out of it, how we
create jobs in the private sector. Senator Snowe and I are proud to
have brought several bills to the floor, this being the latest, that we
believe can contribute to the increase in private payroll.
I want to be clear, because many of our colleagues have been
challenging, and I think appropriately, why we can't eliminate some
government programs; why do we have to keep them all. Senator Snowe and
I have jointly recommended the elimination of two, though relatively
small, programs within the SBA, and we will be reviewing just this week
with the Administrator of the SBA the efficiency of their whole budget.
If we can find other places and other programs to eliminate that are
not hitting their marks, not meeting their goals, we are committed to
working together to do that. But this program we have reshaped, we have
modified, we have improved, and we are strongly and passionately
recommending its reauthorization for 8 years.
We have together reviewed nine studies of the National Research
Council, studies by the Government Accountability Office to help guide
our committee in the drafting of this bill. We have included many
additional policy goals and some former goals and appropriate interest
to balance. We wanted
[[Page S1888]]
to improve the diversity of the programs geographically and otherwise
so more States and individuals could participate. We also wanted to
maintain a fair playing field so true small businesses could continue
to compete for this very small but important percentage of overall R&D.
We wanted to encourage exploration of high-risk, cutting-edge research.
As Dr. Charles Wessner said--the lead assessment adviser on this
program--if every program you give money to is working, or every
business you are awarding grants to works, you are not running your
program correctly, Senators. Because this is high-risk early funding,
where it is the most difficult funding for these businesses to receive.
Obviously, once they show promise, there are any number of investors
and capital out there looking right now for good investments,
particularly right here in the United States. So at a certain point, at
a certain level, with certain proven technologies, there is enough
venture capital out there to take these programs to the next level. But
what is not there right now is that first dollar, that early $150,000
grant that says: We think you have something of promise. Go ahead and
try it. They try it for a year or two, they come back, and they can get
another $150,000, up to $1.5 million.
Eventually, it may collapse because it wasn't what people thought,
and that money is lost. But the great news is that collectively,
cumulatively, this program makes money for the taxpayer--it does not
lose money--although not every grant is successful. We wouldn't want
that. This is a fairly high-risk, early form of capital, but it is a
smart use of taxpayer dollars, and that is why Senator Snowe and I
enthusiastically recommend it.
This program has been supported by every President. President Reagan
was supportive, President Bush was supportive, President Clinton has
been supportive, and now President Obama has signaled his support as
well. So we are very proud to be able to present this.
Mr. President, I ask unanimous consent to have printed in the Record
another report regarding the state of small business--not the entire
report but some parts of it that are central to this debate, sponsored
by Network Solutions, the University of Maryland, Robert H. Smith
School of Business.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Introduction
The competitive health of America's small businesses is as
low as it has been since the Small Business Success Survey
began tracking at the onset of the recession. There continues
to be a struggle to provide capital and find new customers,
while there is an unprecedented lack of confidence in
competing with big business. Yet, small businesses are
starting to grow and return to the black. After reaching a
low point in the summer, technology investment is on the rise
and social media adoption continues to grow. Despite poor
competitive health now, owners are becoming increasingly
optimistic about the economy and their future business
success. Over a quarter plan to add staff in 2011, and if
they carry out their plans, will create 3.8 million jobs.
Ms. LANDRIEU. Mr. President, this portion of the report says,
interestingly enough:
After having reached a low point in the summer, technology
investment is on the rise and social media adoption continues
to grow. Despite poor competitive health now, owners are
becoming increasingly optimistic about the economy and their
future business success.
They have been taking this survey of small businesses since the
recession started, and the report continues:
Over a quarter plan to add staff in 2011, and if they carry
out their plans, will create 3.8 million jobs.
Again, it is the magic of small business. We have 27 million small
businesses in America. If every one of them, obviously, created one
additional job, that would be 27 million more jobs. And we could use
it. That is not going to happen, but if even a portion of them added
one job to their bottom line, we know they could have an impact. It is
important for programs such as this and getting capital at their local
bank, being able to access credit from credit cards, that have
reasonable charges and transparent charges--which I am proud to have
been a part of helping on--and it is getting access for new
technologies to find a friend at the Federal Government who will step
up and help them grow their business. We strongly recommend this
program.
I am going to yield the floor at this time, but we do have several
amendments that are pending, and we will have to organize those votes
sometime this week. We have over 89 amendments that have been filed,
but we are hoping some of the Members, if they do not feel they have to
offer those amendments, will withdraw them. Some of them are not
germane to this bill and we wish to keep this bill very focused on
small business.
I do want to join Senator Snowe in support of the repeal of 1099,
which is represented by the Johanns amendment, and Senator Menendez may
have a perfecting amendment to that, I understand, and I look forward
to working with Senators Johanns and Menendez to get that regulatory
burden lifted off the back of small business. It doesn't go into effect
until 2012, but small businesses around the country are quietly
alarmed, as they should be, in my view, regarding that additional
paperwork that would be required. There is a fair amount of across-the-
board support on both sides of the aisle for that repeal, and I hope we
can get that done sometime this week as well, either specifically
attached to this bill or parallel to this effort, because it is a very
important effort for small businesses to get that new 1099 requirement
repealed, as well as getting this bill passed.
Mr. President, with that, I yield the floor, and I suggest the
absence of a quorum.
The PRESIDING OFFICER (Mr. Franken). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. LEAHY. I ask unanimous consent that the order for the quorum call
be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________