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55–265 PDF 2010

MARKUP ON VIEWS AND ESTIMATES 

OF SBA BUDGET FOR FISCAL YEAR 2011 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

March 4, 2010 

Small Business Committee Document Number 111-059 

Available via the GPO Website: http://www.access.gpo.gov/congress/house 


Congress.#13
HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

DENNIS MOORE, Kansas 

HEATH SHULER, North Carolina 

KATHY DAHLKEMPER, Pennsylvania 

KURT SCHRADER, Oregon 

ANN KIRKPATRICK, Arizona 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

DAN LIPINSKI, Illinois 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

DEBORAH HALVORSON, Illinois 

SAM GRAVES, Missouri, Ranking Member 

ROSCOE G. BARTLETT, Maryland 

W. TODD AKIN, Missouri 

STEVE KING, Iowa 

LYNN A. WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BLAINE LUETKEMEYER, Missouri 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KAREN HAAS, Minority Staff Director 

(II) 

STANDING SUBCOMMITTEES 

Subcommittee on Contracting and Technology 

GLENN NYE, Virginia, Chairman 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

KURT SCHRADER, Oregon 

DEBORAH HALVORSON, Illinois 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

AARON SCHOCK, Illinois, Ranking 

ROSCOE BARTLETT, Maryland 

W. TODD AKIN, Missouri 

MARY FALLIN, Oklahoma 

GLENN THOMPSON, Pennsylvania 

Subcommittee on Finance and Tax 

KURT SCHRADER, Oregon, Chairman 

DENNIS MOORE, Kansas 

ANN KIRKPATRICK, Arizona 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

DEBORAH HALVORSON, Illinois 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

VERN BUCHANAN, Florida, Ranking 

STEVE KING, Iowa 

W. TODD AKIN, Missouri 

BLAINE LUETKEMEYER, Missouri 

MIKE COFFMAN, Colorado 

Subcommittee on Investigations and Oversight 

JASON ALTMIRE, Pennsylvania, Chairman 

HEATH SHULER, North Carolina 

BRAD ELLSWORTH, Indiana 

MARY FALLIN, Oklahoma, Ranking 

LOUIE GOHMERT, Texas 

(III) 

Subcommittee on Regulations and Healthcare 

KATHY DAHLKEMPER, Pennsylvania, Chairwoman 

DAN LIPINSKI, Illinois 

MELISSA BEAN, Illinois 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

LYNN WESTMORELAND, Georgia, Ranking 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

Subcommittee on Rural Development, Entrepreneurship and Trade 

HEATH SHULER, North Carolina, Chairman 

MICHAEL MICHAUD, Maine 

BOBBY BRIGHT, Alabama 

KATHY DAHLKEMPER, Pennsylvania 

ANN KIRKPATRICK, Arizona 

YVETTE CLARKE, New York 

BLAINE LUETKEMEYER, Missouri, Ranking 

STEVE KING, Iowa 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

(IV) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

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

Graves, Hon. Sam .................................................................................................... 2 

APPENDIX 

Views and Estimates of SBA Budget for Fiscal Year 2011 .................................. 5 

(V) 

(1) 

FULL COMMITTEE MARKUP ON VIEWS AND 

ESTIMATES OF SBA BUDGET FOR FISCAL 

YEAR 2011 

Thursday, March 4, 2010 

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 Vela ́zquez 

[chairman of the Committee] presiding. 

Present: Representatives Vela ́zquez, Moore, Schrader, Clarke, 

Bright, Halvorson, Graves, Westmoreland, Luetkemeyer and 

Thompson. 

Chairwoman VELA ́ ZQUEZ. I am pleased to call this morning’s 

mark-up to order. 

Today the Committee meets to consider its views and estimates 

of the Small Business Administration’s Fiscal Year 2011 budget. 

This discussion comes at a time when the economy is beginning to 

turn a corner. Most Americans, including the President, are looking 

to entrepreneurs to maintain that momentum. By providing robust 

funding for small business programs, we can further that progress 

and keep our recovery strong. 

Needless to say, I was pleased to see President Obama boost 

funding for the SBA. However, I have concerns about how that 

money will be spent. As of now, 89 percent of SBA’s new resources 

will go to unauthorized programs and agency overhead. This leaves 

a mere 2.6 percent increase for core programs. 

It is my hope that through the adoption of these views, we can 

change that trend and redirect funds to the programs that entrepreneurs have always relied on. 

Just as the downturn has forced small firms to make smart 

choices, SBA should do the same. That means spending widely and 

investing strategically. This is why we need to support programs 

like the new markets venture capital, which is making the government money. Even amidst the worst investment climate in decades, 

that initiative which receives no funding in this budget has managed to generate revenue for the Treasury, helping reduce deficits. 

But rather than providing any resources to NMBC, this proposal 

instead invests in riskier ventures, like SBA Express, which could 

cost taxpayers as much as $128 million FY 2011. 

More than anyone, small business owners understand the importance of fiscal restraint. The reviews before us take a page from 

2 

those entrepreneurs and do more than simply increase spending. 

On the contrary, they offset new investment by cutting unnecessary costs and terminating six under performing programs. 

Entrepreneurial development programs have a track record of 

solid returns. In fact, every one dollar spent on these efforts puts 

another $2.87 back into the Treasury. Most of these programs, such 

as Small Business Development Centers are catalysts for job creation. Unfortunately, the FY 2011 budget will flat fund virtually all 

of them. It, instead, invests in proven efforts like the Emerging 

Leaders Program, which does essentially the same thing as SBDCs, 

only at twice the cost. The end result is spending $6,000 on each 

job created when we could do the same and spend only $3,000. 

Everyone agrees we need to get capital flowing to small businesses. In doing so, it is important for the lending process to be as 

accessible as possible. While it is never a good thing to increase 

costs on small business loans, this is particular true during an economic downturn. So the agency’s proposed increase in lending fees 

is ill-timed, to say the least. 

In the last two years, we have seen considerable declines in private industry. The one sector that has grown is the federal marketplace. Between the years 2000 and 2008, it was than doubled in 

size. Historically, the SBA’s contracting programs have helped 

business tap the expanding world of opportunity. However, following a recent wage of fraud, not all of these programs are running at full capacity. 

The Committee is well aware of this problem and is making fraud protection a top priority. However, the $2 million that this 

budget suggests for fraud control will not even put a dent in the 

$500 million in HUBZone and veteran disabled fraud the GA0 has 

uncovered, let alone waste that hasn’t been identified. 

In these views, we provide the agency with a blueprint for fighting fraud. That plan will insure only honest entrepreneurs, not 

large corporations, receive small business contracts. 

After eight years of neglect, it is time to rebuild the SBA, and 

the overall funding level proposed in the President’s budget is a 

welcome sign. But the agency needs to be judicious in its spending. 

These views give the SBA the direction and support it needs to 

make sound investments and promote its core mission, strengthening our nation’s small businesses. 

I now will yield to Mr. Graves for any comments that he may 

have. 

Mr. GRAVES. Thank you, Madam Chair, and I want to thank you 

for holding this mark-up today on the Committee’s views and estimates of the President’s proposed SBAbudget for fiscal year 2011. 

The President has repeatedly stated that small businesses will 

lead our economic recovery. Yet the Committee continues to hear 

reports that small businesses are unable to access capital, have difficulty obtaining federal government contracts and are hamstrung 

by ever increasing regulatory burdens. Small Businesses simply 

cannot thrive under these conditions. The soaring federal deficits 

are piling up as a result of Washington’s spending addiction further impeding economic growth in America. 

Unsustainable deficits can result in higher interest rates that hit 

small businesses especially hard. As a result, the businesses must 

3 

devote more of their cash flow to larger interest payments, making 

it less likely that they will have the resources to hire employees or 

expand their operations. 

Additionally the continued uncertainty about the future of far 

reaching legislation, such as health care reform and the proposed 

national energy taxes, all but have frozen business expansion and 

job creation nationwide. Until entrepreneurs can get an accurate 

idea of the new government regulations that lay ahead, they are 

unlikely to invest in expanding their enterprises. 

In an effort to incentivize small business lending, the administra- tion has proposed reallocating $30 billion in return TARP funds to 

establish a new small business lending fund. Given our responsibility and legislative mandate under House rules, the House Small 

Business Committee has an obligation to hear directly from Treasury Secretary Geithner about this proposal as he is the primary 

proponent and likely overseer of this new small business lending 

facility. Secretary Geithner must share with us the plans for the 

execution and the expected results of this fund before it is established. 

With respect to the SBA budget, I am particularly concerned 

about the lack of resources that will be devoted to increasing procurement opportunities for small businesses. 

I recently introduced the Helping Small Businesses Compete Act, 

a bill designed to improve the ability of small businesses to obtain 

federal government contracts. It is imperative that the SBA find 

ways within current resources to increase the number of trained 

personnel that can find and review federal procurement opportunities for small business owners. I certainly respect some of the 

Chairwoman’s well founded criticisms of the budget, but I simply 

cannot concur with the proposed budget views and estimates, and 

I will be filing a separate set of views and estimates with the Budget committee. 

And with that I will yield back. 

Chairwoman VELA ́ ZQUEZ. Are there any other members who wish 

to be recognized on the views and estimates? 

[No response.] 

Chairwoman VELA ́ ZQUEZ. Well, the Committee now moves the 

consideration of the views and estimates of the Small Business Administration FY 2011 budget. The Clerk will report the title of the 

document. 

The CLERK. The views and estimates for the Small Business Administration’s budget for Fiscal Year 2011. 

Chairwoman VELA ́ ZQUEZ. 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.] 

Chairwoman VELA ́ ZQUEZ. Seeing none, the question is on agreeing to the views and estimates. A those in favor say aye. 

[Chorus of ayes.] 

Chairwoman VELA ́ ZQUEZ. All those opposed, no. 

[Chorus of nays.] 

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

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At this point I would like to yield to Mr. Graves for an unanimous consent request. 

Mr. GRAVES. I would request unanimous consent to file my views 

on the budget estimate. 

Chairwoman VELA ́ ZQUEZ. Without objection, so ordered. 

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 mark-up is now adjourned. 

[Whereupon, at 10:14 a.m., the Committee meeting was adjourned.] 

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