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40–234 PDF 2008

FULL COMMITTEE MARKUP OF VIEWS

AND ESTIMATES OF THE SMALL

BUSINESS ADMINISTRATION’S PROPOSED

BUDGET FOR FISCAL YEAR 2009

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF 

REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

FEBRUARY 27, 2008

Serial Number 110-74

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

HEATH SHULER, North Carolina 

CHARLIE GONZA ́ LEZ, Texas 

RICK LARSEN, Washington 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

HENRY CUELLAR, Texas 

DAN LIPINSKI, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

BRUCE BRALEY, Iowa 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

BRIAN HIGGINS, New York 

MAZIE HIRONO, Hawaii 

STEVE CHABOT, Ohio, Ranking Member 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

STEVE KING, Iowa 

JEFF FORTENBERRY, Nebraska 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

DAVID DAVIS, Tennessee 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KEVIN FITZPATRICK, Minority Staff Director

STANDING SUBCOMMITTEES 

Subcommittee on Finance and Tax

MELISSA BEAN, Illinois, Chairwoman 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

VACANT, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Contracting and Technology

BRUCE BRALEY, IOWA, Chairman 

HENRY CUELLAR, Texas 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

JOE SESTAK, Pennsylvania 

DAVID DAVIS, Tennessee, Ranking 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

MARY FALLIN, Oklahoma

(II) 

Subcommittee on Regulations, Health Care and Trade

CHARLES GONZA ́ LEZ, Texas, Chairman 

RICK LARSEN, Washington 

DAN LIPINSKI, Illinois 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

LYNN WESTMORELAND, Georgia, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

MARILYN MUSGRAVE, Colorado 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida

Subcommittee on Urban and Rural Entrepreneurship

HEATH SHULER, North Carolina, Chairman 

RICK LARSEN, Washington 

MICHAEL MICHAUD, Maine 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JEFF FORTENBERRY, Nebraska, Ranking 

ROSCOE BARTLETT, Maryland 

MARILYN MUSGRAVE, Colorado 

DAVID DAVIS, Tennessee

Subcommittee on Investigations and Oversight

JASON ALTMIRE, PENNSYLVANIA, Chairman 

CHARLIE GONZA ́ LEZ, Texas 

RAUL GRIJALVA, Arizona 

VACANT, Ranking 

LYNN WESTMORELAND, Georgia

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1

Chabot, Hon. Steve .................................................................................................. 2

APPENDIX 

Prepared Statements: 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 5

Chabot, Hon. Steve .................................................................................................. 7

Altmire, Hon. Jason ................................................................................................. 8

(V) 

(1)

FULL COMMITTEE MARKUP OF VIEWS 

AND ESTIMATES OF THE SMALL 

BUSINESS ADMINISTRATION’S PROPOSED 

BUDGET FOR FISCAL YEAR 2009

Wednesday, February 27, 2008

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 10:00 a.m., in Room 

2360 Rayburn House Office Building, Hon. Nydia Velaquez [chairwoman of the Committee] presiding. 

Present: Representatives Velaquez, Grijalva, Lipinski, Altmire, 

Clarke, Ellsworth, Johnson, Hirono, Chabot, Bartlett, Musgrave, 

Davis and Buchanan. 

OPENING STATEMENT OF CHAIRWOMAN VELA ́ ZQUEZ 

Chairwoman VELAQUEZ. I am pleased to call this morning’s 

markup to order. 

Today the Committee will consider its views and estimates of the 

Small Business Administration’s FY 2009 budget. The task comes 

before us at a time when our nation is in dire need of the job creation and growth that are hallmarks of the small business economy. 

Across America consumers are spending less on goods and services. Credit markets are tightening. And in the wake of the prime 

mortgage crisis, people are losing their homes. The situation calls 

for prompt action, and small businesses are ready to do their part 

to get the economy back on track. 

Unfortunately, the Administration’s budget for FY 2009 is little 

different from those of the past eight years. It lacks new ideas, and 

instead chooses to continue the systematic eradication of the Small 

Business Administration. During the 1990s, the agency had a seat 

at the President’s elbow and a budget of $1 billion. The Small Business Administration expanded essential services to entrepreneurs 

and helped them lead one of our nation’s greatest periods of economic prosperity. 

Today, the agency is a shell of its former self, as evidenced by 

the low morale of its employees. And its budget has been cut by 

more than 50 percent. For FY 2009 alone, 18 out of 26 core programs have been cut, flat-funded, or terminated all together. For 

instance, despite a demonstrated need for expanded technical assistance, the Administration cut the Small Business Development 

Centers and the Women’s Business Centers. Funding is also 

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slashed for the 7(a) loan program, and its lender fees are increased 

to the highest allowable level. 

These would be questionable decisions in an average year, but 

they are especially troubling when 80 percent of banks are tightening lending standards, and the economy has called out for an immediate infusion of capital. 

A wrong-headed approach is taken where the Microloan program 

is concerned. Whereas entrepreneurs of the past, including women 

and minorities in low-income areas, could look to this initiative for 

capital, the Administration’s budget turns its back on them. In fact, 

instead of fostering the growth of small entrepreneurs, it raises interest rates on those who can least afford to pay them. 

It is all remarkably short-sighted, considering that many of these programs have been shown to put $2 into the Federal Treasury for 

every dollar invested. In other words, investing in small businesses 

is not only good for the economy, it helps reduce the deficit. Clearly, small businesses and the American people, as a whole, deserve 

far better than the President’s budget. 

I, for one, believe it is time for the Small Business Administration to step up to the plate and draw on its lending, entrepreneurial development, and contracting programs to spur the economy. The views and estimates we have before us today take needed 

steps to remedy eight years of shortfalls and focus on fostering the 

type of growth that will bring us back from the brink of this looming recession. Our recommendations include $150 million for the 7(a) program, which will allow the agency to do over $20 billion in lending. We 

also encourage fully funding the SBDCs and WBCs, bringing small 

firms the professional support they require to succeed. 

We have an important opportunity to do the right thing for small 

businesses and the country this morning. In light of that, I urge 

each of you to support the Committee’s views and estimates. 

I will now yield to Mr. Chabot for any comments he may have. 

OPENING STATEMENT OF MR. CHABOT 

Mr. CHABOT. Thank you. Good morning, and I would like to 

thank the Chairwoman for holding this markup today on the Committee’s views and estimates of the President’s proposed Small 

Business Administration budget for Fiscal Year 2009. 

The budget submission for 2009 is not substantially different 

from the submission for the last fiscal year. The Chairwoman’s 

views make some salient criticisms, and I concur with those. One 

of the most important things we can do as a Committee is to ensure that the SBA has the tools it needs to fulfill its mission to 

help small businesses—the backbone of our country’s fundamental 

economic strength. Despite agreements with the Chairwoman, I 

cannot fully concur with her views and estimates and will be filing 

separate views with the Budget Committee. 

I believe that the President’s budget request proposes realistic 

funding levels, given the budgetary constraints facing the country. 

I think that the budget accomplishes a good deal by providing additional resources to train SBA employees, hire more workers that 

can provide assistance to small businesses seeking Federal Government contracts, and increase outreach to America’s veterans. HowVerDate 0ct 09 2002 10:56 May 05, 2008 Jkt 033615 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 G:\CLERK SB-LD\HEARINGS\TRANSCRIPTS\40234.TXT LEANN
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ever, not everything in the SBA budget request comports with my 

stated objective that the agency have the resources available to 

meet the needs of small businesses and prospective entrepreneurs. 

For example, when inflation is taken into account, the ability of 

the SBA’s entrepreneurial development partners to meet the needs 

of their clients could be called into question. Similarly, an increase 

in the number of procurement center representatives is a start, but 

an insufficient one in my estimation. The SBA needs to allocate 

more personnel for this vital role in increasing small business participation in the federal procurement system. 

Finally, the SBA, yet again, requested a zero subsidy for the 

Microloan Program. As a supporter of microlending and the benefits that accrue to low-income areas, I believe that the small 

amount in the budget devoted to microloans is well worth it. That 

being said, I must respectfully disagree with the concept that simply having more money thrown at a problem will solve it. 

Administrator Preston has tackled a number of problems from 

disaster loan backlogs to employee morale. He has done so within 

severe budget constraints. Sometimes all it takes is asking the 

right question and someone who wants to find a solution to the 

problem. Developing those solutions takes brainpower—something 

that federal budgetary resources cannot buy. 

It is my firm belief that Administrator Preston will continue to 

strive to make the agency the best it can be before he leaves it to 

the next Administrator. I certainly respect the Chairwoman’s passion and devotion to the interests of small businesses. However, if 

it is true that the SBA remains a troubled agency, pouring more 

money into it may not be the optimal solution for America’s small 

businesses and budding entrepreneurs. 

And I yield back, Madam Chair.

Chairwoman VELAQUEZ. Thank you, Mr. Chabot. 

Are there any other members that wish to be recognized on the 

views and estimates? 

[No response.] 

The Committee now moves to consideration of the views and estimates of the Small Business Administration’s FY2009 budget. The 

Clerk will report the title of the document.

The CLERK. A letter to the House Committee on the budget, expressing the Small Business Committee’s views and estimates on 

the Fiscal Year 2009 budget for the U.S. Small Business Administration.

Chairwoman VELAQUEZ. I ask unanimous consent that the views 

and estimates document, in its entirety, be open for amendments 

at this time. Does any member seek recognition for the purpose of 

offering an amendment? 

[No response.] 

Seeing no amendments, the question is on agreeing to the views 

and estimates. All those in favor, say aye. 

[Ayes.] 

All those opposed, no. 

[Nos.] 

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The ayes have it, and the views and estimates are agreed to. 

Yes, sir. 

Mr. CHABOT. Madam Chair, just for the record, I wanted to note 

that we will be filing Republican views on the budget. 

Chairwoman VELAQUEZ. Without objection. 

I ask unanimous consent that the Committee be authorized to 

correct punctuation and to make other necessary technical corrections on the document considered today. Without objection, so ordered. 

This markup is now adjourned. 

[Whereupon, at 10:22 a.m., the Committee was adjourned.]

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