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Snowe Challenges SBA to do More for American Small Businesses
Senate Small Business Committee Hearing Focuses on the Budget Needs of the SBA
March 5, 2007
Washington D.C. – While congratulating Small Business Administration Administrator Steven Preston for his vision and approach to meeting the needs of the nation’s small businesses, Olympia J. Snowe (R-Maine), Ranking Member of the Senate Small Business and Entrepreneurship Committee today challenged the SBA to improve its financial, technical, and contracting assistance programs to better support the more than 25.8 million small businesses in the United States.
Below is text of Senator Snowe’s statement from this morning’s hearing as prepared:
As the new Administrator, Steve has made it his number one mission to promote small business development through the Small Business Administration’s (SBA’s) business financing, technical assistance, and government contracting programs. I applaud his new vision to create a more innovative approach in the way SBA responds to the evolving needs of our nation’s 25.8 million small businesses. I also commend Steve’s enthusiasm and dedication to renewing the SBA and I certainly look forward to working with Steve as he paves the way for an even stronger and robust SBA.
The spirit of our nation’s entrepreneurs is translated through the tremendous and often overlooked contributions they make to our economy. Small businesses represent 99 percent of all employers, create nearly 75 percent of all net new jobs, and employ 51 percent of the private-sector workforce.
America’s small businesses take risks others don't! They transform their ideas and dreams into realities which keeps our nation competitive and growing. They are the back bone of communities, breathing life into areas once devastated by manufacturing closures, disasters, and economic recessions. And they truly are the foundation, the base and the core of our economy.
Given these facts, I am truly disappointed by the proposed funding level of $814 million for the SBA’s Fiscal Year 2008 budget. Excluding the Disaster Loan program, only $463 million will go to the SBA’s core programs, which continues a trend of limiting the SBA’s true potential. Over the last 7 year period, funding for the SBA’s programs has been reduced by an outstanding 31 percent! When, you take a step back, the SBA's budget represents less than 3/100ths of a percent of the total Federal budget. At the same time, our investment in the SBA has helped to create or retain over 5.3 million jobs since 2001. With these types of numbers, we should be asking how much more can we invest? Not where we can make cuts!
Just last week, Administrator Preston attended a Small Business Manufacturing Forum I held in Lewiston, Maine, to address the 20,700 jobs lost in my home state since 2000. We heard firsthand from over 90 small business manufacturers the barriers that hinder their success and the opportunities that have helped manufacturers grow and expand their business. Most importantly, these small businesses asked for a practical guide to the resources available to them so they can be more innovative and competitive domestically and globally. I’m sure this same story could be told across the nation...and I ask that Steve work with Congress to better promote SBA’s programs and services.
Indeed the SBA has been faced with tremendous challenges, making many well-documented mistakes and quite frankly abdicating its responsibilities following the 2005 Gulf Coast hurricanes. The SBA failed to accurately monitor its disaster financial information and implement its disaster transformation workforce strategy, leaving disaster victims waiting longer than 70 days for their loans to be processed. This tragic response to a tragic and devastating disaster must not be repeated!
That is why, I have made reforming and improving the Disaster Loan program a top priority. The SBA desperately needed a full complement of resources to respond to this unprecedented disaster. I have worked with Chairman Kerry and Senators Landrieu and Vitter, to introduce legislation designed to remedy the problems that prevented or delayed disaster victims from receiving immediate and necessary funding following the 2005 Gulf Coast hurricanes.
And under Steve’s leadership, the SBA has taken great strides to disburse or partially disburse 98 percent of the approved loans totaling over $5.1 billion to help rebuild businesses and homes in the Gulf region. I applaud Steve’s commitment to reverse the SBA’s downward spiral and transform the SBA into a customer focused institution. We must move beyond past criticism of the agency and implement solutions to problems so that the SBA can exhibit the same passion for excellence found in the entrepreneurs it serves.
While the SBA is taking steps in the right direction, the FY2008 budget proposal has several misplaced priorities. I am especially concerned about eliminating the subsidy of the SBA’s Microloan program and transferring the technical assistance duties to the Small Business Development Centers, Women’s Business Centers, and SCORE. This relatively inexpensive program provides loans of up to $35,000 and technical assistance to new and growing small businesses. This type of service is especially critical for our next generation of entrepreneurs who are looking start or grow a business. In fact, in my own State of Maine, the Microloan program has made 94 loans over the last two years, for a total of over $1.7 million. The elimination of this subsidy, will tie the hands of our nation’s micro-entrepreneurs that are typically located in rural and underserved communities and have no other resource for financing. Let’s not make it more costly for them to get financing.
Additionally, I will continue to oppose the Administration's proposals to insufficiently fund programs such as the Small Business Development Centers, Veteran’s Business Development, SCORE and Women’s Business Centers which served over 1.2 million clients in 2006. Not only have these programs been level-funded for the last 5 years but the SBA proposes to increase their responsibility to take on Microloan technical assistance. These programs time and again have exceeded its potential and proven its worth. It is time to provide them with the necessary resources they need to reach and assist more small businesses.
Also, with the Federal contracting market now exceeding $314 billion a year, small businesses are looking to the SBA for assistance with fair access to prime contracting and subcontracting opportunities. I am concerned that the SBA has failed to fix regulatory loopholes identified by the GAO that allows large contractors to acquire small business set-asides.
Small businesses yearn to grow, flourish and thrive, and the SBA has the experience and the resources to be their bridge to success. However, a steady decline in the SBA's budget could jeopardize its ability to provide this positive economic stimulus in the future. More importantly, if we fail to provide sufficient support to SBA’s core lending and business development programs, we threaten to reduce small businesses’ ability to compete. The American economy needs a strong and vibrant Small Business Administration. This Committee is here to help you, Administrator Preston, improve the SBA in any way possible to ensure the success of tomorrow’s entrepreneurs.
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