SMALL BUSINESS PROGRAMS ACT OF 2007 -- (House of Representatives - November 06, 2007)
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Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
Today, Mr. Speaker, I rise in support of the request to suspend the rules and pass H.R. 3866, the SBA Programs Act of 2007.
I would like to thank Chairwoman Velázquez for working in a cooperative and bipartisan manner to bring this bill to the House floor today.
The bill we are considering today is a highly technical bill, but one of the Small Business Committee's legislative obligations.
The financing programs in the Small Business Act and the Small Business Investment Act of 1958 rely on lending by the private sector. Lenders are protected by guarantees issued by the SBA, promising repayment if the small business borrower fails. Congress must impose limits on the authority of the SBA to issue such guarantees. H.R. 3866 establishes limits that will enable the program to operate even if there is unexpected demand.
Given the current credit crunch, it is certainly possible that the SBA will have a spike in demand. The limits adopted in this bill will ensure that, unlike in some prior years, the program will not be the subject of operational restrictions.
I want to point out that supporting these limits will have no budgetary impact. The SBA's guaranteed loan, certified development company, and debenture small business investment company programs also operate at zero subsidy. That means the programs require no appropriation, and losses are covered by fees charged to lenders and borrowers. Maintaining this zero subsidy still enables Congress to provide for significant expansion of the authorization in order to meet demand, while protecting taxpayers.
The microloan programs, which helps entrepreneurs in many low-income areas and is a valuable job creation tool for a modest investment by the government, also receives an increase in lending authority.
Given the value of the program, I believe that the modest increase more than pays for itself in providing jobs and developing the entrepreneurial culture that continues to maintain the economic viability of this Nation.
In addition, the committee must provide authorization levels for the Small Business Development Center program. The allocation of funds to various centers is based in part on a comparison of funds appropriated to funds authorized. Without an authorization level, the funding formula cannot work. It also is important to point out that the authorization level for the SBDCs is increased by around 3 1/2 percent. This increase takes into account inflation and the administration's request that the centers provide even more counseling. The other major entrepreneurial outreach program of the SBA, the Women's Business Center program, receives an increase of around 17 percent. Now, while this may at first seem like a lot, the authorization in this bill represents the first time in nearly 8 years that the Women's Business Center authorization levels have been set thus representing an adjustment in align with inflation.
Similarly, the PRIME program, which provides additional technical assistance to microloan borrowers, has not received an authorization level since 1999. The authorization of $20 million in this bill represents an increase of $625,000 per year, or just enough, again, to keep up with inflation. I want to point out that the SBA requested a budget increase to cover inflation including the rapid rise in the cost of energy. It is only fair to authorize a similar modest increase for SBA's entrepreneurial outreach in education programs.
Other authorizations in this bill also represent either level funding, such as the SCORE program and the drug-free workplace program or represent very modest increases from prior authorization levels such as the $400,000 increase in funding for BusinessLINC, a valuable program that helps small businesses find contracts to supply large businesses with goods and services.
Two programs received significant boosts in authorization levels, the Office of Veterans Affairs and the HUBZone programs. In time of war, it is important that we provide assistance to our veterans. That includes ensuring that they have the tools necessary to integrate into civilian life through entrepreneurship. On a percentage basis, the authorization increase for the program is significant, but the dollar value is a modest $2 million. Given the sacrifices our veterans have made, this represents only a modest down payment on the debt we owe to them, our veterans.
As for the HUBZone program, the increase arises from the efforts of the committee to ensure that only firms eligible for participation in the program receive Federal Government contracts. This requires additional onsite verification and thus represents the committee's view to the appropriators to significantly increase funding in that area.
Again, I would like to thank Chairwoman Velázquez. Although there are significant philosophical differences between Members, I think the past year has demonstrated what can happen when this body tries to work through those differences without acrimony or questioning of the motives of the other side. Much can be accomplished for the American public, and that is what the people elected us to do. So I want to, again, commend the chairwoman for her willingness to work in a bipartisan manner not only in this bill but many bills that we have dealt with in the past.
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