News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman

For Immediate Release
February 27, 2008     

CONTACT: Erin Donar/ Jaime Zapata,  (202) 226-3636

House Committee on Small Business Rejects
President’s FY 2009 Budget
Panel Votes to Bring Real Support to the Nation’s Entrepreneurs

WASHINGTON, D.C. — When times are tough, it makes sense to focus on what works.  Fortunately, no one works harder or more efficiently than small businesses.  Faced with the threat of a recession, our nation is right to look to them to lead the way to economic recovery.  We can’t expect small firms to do it all alone, however.  They need and deserve our support.  Earlier this month, the Bush Administration issued its FY 2009 budget, which slashes programs specifically designed to help entrepreneurs.  Today, the House Committee on Small Business voted to reject the Administration’s proposal.  The panel also submitted its own recommendations, which ensure America’s small firms can continue their work and help get our economy back on track.

“The Administration’s budget for FY 2009 is short on new ideas, continuing eight years of systematic eradication of federal initiatives meant to spur entrepreneurship,” said Chairwoman Nydia M. Velazquez.”

For FY 2009, the President proposed slashing programs under the Small Business Administration (SBA) by 15%.  That amounts to an aggregate reduction of more than 50% since 2001.  Initiatives such as the Small Business Development Centers (SBDCs) and the Women’s Business Centers (WBCs)—both of which provide crucial technical assistance to entrepreneurs—are cut.  The same is true for the 7(a) loan program, whose lender fees are raised to the highest allowable level despite a growing need for affordable capital.  The budget also terminates funding for several other important programs, among them: Microloans—one of the SBA’s only sources of assistance for low-income entrepreneurs—as well as PRIME, the New Markets Program and SBIR Fast.

“Many SBA programs have been shown to put two dollars into the Federal Treasury for every one dollar that is invested,” said Chairwoman Velázquez.  “Cutting initiatives such as these, which foster economic growth and reduce the deficit, is remarkably shortsighted and irresponsible,”

The Committee’s proposal recognizes the central role played by affordable capital and high quality technical assistance in the fostering of entrepreneurial success.  The panel’s Views and Estimates call for fully funding proven SBA programs, among them SBDCs and WBCs.  They also provide respective loan levels of $20 billion and $30 million for the 7(a) and Microloan programs, and ensure that the agency will better serve entrepreneurs while eliminating fraud from federal contracting programs.

“America’s small businesses deserve our support, and we don’t shy away from that responsibility,” said Chairwoman Velázquez.  “Giving entrepreneurs the tools they need to succeed is the way to strengthen our faltering economy.”

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