WASHINGTON, Jan. 8 /PRNewswire-USNewswire/ -- One month before the President
submits his 2009 budget request to Congress, Senators John Kerry (D-Mass.) and
Olympia Snowe (R-Maine), Chairman and Ranking Member of the Committee on Small
Business and Entrepreneurship, urged the Bush Administration to support
America's small businesses by increasing funding for the Small Business
Administration (SBA). Since the Bush Administration has taken office, the
SBA's budget has been cut by 31 percent. For 2008, Congress passed the first
real funding increase for core small business programs - adding almost $40
million over the previous year's budget request and actual funding.
"President Bush talks a lot about helping small businesses, but he hasn't
delivered. We are facing a tightening credit market and a tough employment
outlook due to the sub-prime mortgage crisis, which means it's more important
than ever that the Bush Administration puts their money where their mouth is
and fully invests in America's entrepreneurs," said Senator Kerry. "The
Democratic led Congress just passed the first funding increase for small
business programs in seven years, and we'll continue to fight for small
businesses in a bipartisan way. We need to invest in training, capital and
contracting programs that will help America's small businesses remain
competitive, drive our economy and create jobs."
"As small businesses are our nation's true job creators, it is critical that
President Bush and Congress work together to adequately fund the Small
Business Administration," said Senator Snowe. "While the Fiscal Year 2008
Consolidated Appropriations Act took a solid step toward raising SBA funding
levels, I urge President Bush to use his upcoming Fiscal Year 2009 Budget to
build on this momentum and propose sufficient funding for the Agency's vital
lending and business development programs. For an agency that receives a mere
fraction of the total Federal budget, the SBA has consistently proved its
value by creating or retaining more than 5.3 million jobs in the United States
since 1999."
Since 1999, the SBA's programs and services have helped to create or retain
over 5.3 million jobs in the United States. Cuts in funding to the SBA have
led to staffing shortages and lax oversight that resulted in $76 million in
fraudulent loans issued by one of the SBA's largest lenders.
Senators Kerry and Snowe will hold an oversight hearing at the end of the
month to examine staffing shortages at the SBA, among other issues.
The full text of the letter to the Director of the Office of Management and
Budget, James Nussle, is pasted below:
January 8, 2008
The Honorable Jim Nussle
Director
Office of Management and Budget
725 17th Street, NW
Washington, DC 20503
Dear Director Nussle:
As Chairman and Ranking Member of the Senate Committee on Small Business and
Entrepreneurship, we would like to express our strong and continued support
for the U.S. Small Business Administration (SBA). Congress sent a signal with
the increase provided over the President's request for SBA in the Fiscal Year
2008 Consolidated Appropriations Act that the budgets the Administration has
submitted in previous years have not been sufficient. The Congress is doing
all it can to repair the damage caused by those inadequate budgets, but can
only do so much when the Administration sets the base number so low. We urge
you to include sufficient funding for SBA's vital lending and business
development programs in the President's Fiscal Year 2009 Budget request.
America's small businesses are the backbone of our nation's economy, having
created 60 to 80 percent of net new jobs annually over the last decade and
generating more than half of the nation's non-farm private Gross Domestic
Product. Given the credit crunch caused by the subprime mortgage crisis, the
government loans backed by the SBA are more important than ever. They provide
capital to small firms that can't access credit through normal channels and
provide an incentive for banks to offer loans to minorities, women, and
veterans, as well as in distressed areas of our country. Therefore, we are
hopeful that the budget will reflect a realistic level, avoiding underfunding
of the Agency's vital programs and services.
The SBA is a tremendous resource and has achieved a lot with little. Even with
a budget that reflects less than 2/100ths of a percent of the total Federal
budget, the agency continues to significantly contribute to our economic
growth and job creation. The SBA's programs and services have time and again
proven their value, having helped to create or retain more than 5.3 million
jobs in the United States since 1999.
However, instead of supporting this important resource, the Administration's
proposed budget of $464 million for Fiscal Year 2008 represented an astounding
31 percent reduction in SBA's overall budget since 2001. That was a step in
the wrong direction. We cannot, on one hand, cite how important small
businesses are to our country and our economy, and, on the other hand, refuse
to support the SBA with the resources required to meet its missions.
In order for the SBA to meet the evolving needs of 21st century small
businesses, the Fiscal Year 2009 budget request must provide essential support
for the SBA's core programs and services that continue to prove their success
and economic importance, including Small Business Development Centers, the
Microloan program, Women's Business Centers, the HUBZone program, Procurement
Center Representatives, the 7(j) Technical Assistance Program, Veterans
Business Development and SCORE, among others.
Additionally, the Fiscal Year 2009 budget request must provide essential
funding to increase and improve lender oversight. According to the SBA, about
$67 billion of 7(a) and 504 loans are in the marketplace, and at risk is about
$53 billion in SBA guarantees. Many members of the Committee are concerned
that the SBA does not have the resources or staff to protect the public's
interest in these loans. Over the past five years, the SBA's Office of
Inspector General (OIG) has issued more than 60 reports on general lender
oversight issues, including a lender fraud scheme that uncovered $76 million
in fraudulent SBA loans. The Committee has serious concerns about the
effectiveness and appropriateness of SBA's current oversight, how it is
conducted, and the reasonableness of fees being charged. The Committee urges
the Administration to include adequate funding to ensure proper and adequate
oversight of SBA lenders, including providing more oversight staff and funding
to offset the costs of meaningful onsite and offsite lender reviews of lenders
participating in the SBA's 7(a) and 504 lending programs.
For more than 50 years, the SBA has been a vital resource to small businesses,
helping millions of Americans start, grow, and expand their businesses. We
respectfully ask that you provide the Small Business Administration with
sufficient funding to fully meet the agency's mission in the President's
Fiscal Year 2009 Budget.
Sincerely,
John F. Kerry
Chairman
Olympia J. Snowe
Ranking Member
SOURCE U.S. Senate Committee on Small Business & Entrepreneurship
Laurel Brown (Kerry), +1-202-224-0216, or John Gentzel (Snowe),
+1-202-224-8667, both of the U.S. Senate Committee on Small Business &
Entrepreneurship
