Small Business Boost from the U.S. Senate? Don’t forget Energy!

We all know that the Small Business Administration (SBA) is one of the most helpful of all Federal agencies. Since 2001, the SBA has provided $114 billion in guaranteed loans to small businesses through its programs promoting entrepreneurship and $15 billion in direct loans to homeowners, renters, and businesses that were victims of disasters. The SBA has also facilitated greater access for small businesses to compete for Federal contracts, reaching nearly $397 billion of Federal contracts through 2006; and they have done all this in a manner that strengthens free market competition. In his 2009 budget, President Bush acknowledges this legacy of success and makes some solid proposals to build on that success. However, does he go far enough? Some folks in the Senate don’t think so.

The United States Senate is pushing a program that will go well beyond what the President is calling for to help small business. The sponsors, Senators Olympia Snowe (R-Maine) and John Kerry (D-Mass.), the Chairman and Ranking Member of the Senate Committee on Small Business and Entrepreneurship, worked with the members of the Senate Budget Committee to secure $101 million for the Small Business Administration over and above the President’s request for the agency for 2009.

The Senate Plan

The Senate budget blueprint increases funding over the president's request for the following programs:

Capital Programs

  • Greater oversight of lenders in the 7(a) program by providing $9 million for lender oversight activities and dedicating $1.4 million to reduce 504 program fees. The 7(a) and 504 loan programs are the largest source of long-term capital for small businesses. These programs helped to create or retain over 824,000 jobs last year.
  • Increasing Microloan funding to $3.6 million (from zero) and Microloan Technical Assistance to $20 million (the President's budget sought to eliminate it). Last year, small businesses received more than $31 million in microloans, proportionally helping more women and minorities than other programs.
  • New Markets Venture Capital to $5 million (from zero) and New Markets Technical Assistance to $5 million (from zero). These programs promote economic development and the creation of job opportunities through equity investments in low-income areas.

Entrepreneurial Development and Outreach Programs

  • Small Business Development Centers to $105 million (from $87 million). The 950 SBDC offices around the country provided counseling to 600,665 businesses last year.
  • Women's Business Centers to $17 million (from $11.9 million). The 95 Women's Business Centers, which provide business assistance to socially and economically disadvantaged women and men, last year helped 147,000 businesses.
  • SCORE Program to $7 million (from $4.95 million). In the SCORE program, volunteers provide one-on-one counseling to small business owners.
  • Veterans Programs to $2.3 million (from $743,000).
  • Native American Outreach to $2 million (from $730,000).
  • U.S. Export Assistance Centers to $8 million (from $6.4 million). These centers help small businesses compete and succeed in the global marketplace.
  • Program for the Investment in Microentrepreneurs to $5 million (the President's budget proposal sought to eliminate it). PRIME provides training and business assistance to low-income and very low-income entrepreneurs.
  • Veterans Programs at SBDCs to $3.25 million. A veterans entrepreneurship bill signed into law in February 2008 established a grant program for SBDCs to provide more information to veterans about small business resources.
  • Energy Efficiency Programs at SBDCs to $3.25 million. The energy bill signed into law in December 2007 established a grant program for SBDCs to provide more information to small businesses about how to become more energy efficient.

Contracting Programs and Assistance

  • Hiring additional Procurement Center Representatives to $11.6 million (from $6.6 million). PCRs monitor federal contracts and "break out" contracts for small firms.
  • 7(j) Technical Assistance Program to $5.5 million (from $1.5 million). This program provides small disadvantaged businesses with training in financing, business development, management, accounting, and marketing.
  • HUBZones to $5 million (from $1 million). Historically Underutilized Business Zones create incentives for contracting with small firms to create jobs in underserved communities.

The President’s Plan

According to the White House, The President’s 2009 Budget will provide $28 billion in loan guarantees for small businesses; target $85 billion in Federal contracting dollars for small businesses; focus and strengthen product delivery to less-served markets; support disaster recovery through an improved disaster loan program; and make critically needed investments in the Agency itself. Here is how it breaks down:

Promoting Small Business Development and Entrepreneurship

  • Enhances the Section 7(a) Guaranteed Loan Program. $17.5 billion in guaranteed loans for small businesses’ working capital and other business expenses, a 29% increase over 2007 lending. The Small Business Administration (SBA) will continue to focus its attention on providing assistance to underserved markets.
  • Expands the Section 504 Guaranteed Loan Program. $7.5 billion in guaranteed debentures that allow Certified Development Companies to support infrastructure investments, a 19% increase over 2007 lending.
  • Supports contracting assistance. Improves small business access to Federal prime and sub-contracting opportunities, including automating SBA’s processes and systematically reviewing small business size standards.

Improving Disaster Assistance

  • Supports the Disaster Loan Program. $1.1 billion in 2009 direct loans, the normalized 10-year average loan volume, as well as program improvements initiated in the aftermath of the 2005 GulfCoast hurricanes, including:
    • An electronic application capability for disaster victims, which will be operational in Summer 2008;
    • A re-engineered loan processing and approval system that has shortened the interval between loan application and disbursement; and
    • A recently completed Disaster Response Plan to ensure SBA is better prepared to respond to catastrophic events in the future.

Investing in SBA’s Workforce and Technology Systems

  • Promotes core Agency investments. Supports important investments in information technology systems and human capital initiatives, including:
    • Continued procurement of a modern loan management and accounting system to replace an aged mainframe system, to ensure good stewardship of a loan portfolio that has grown by 59% since 2001, to $85 billion.
    • A training initiative focused on improving the core competencies of SBA staff.

Major Savings and Reforms

  • Operates SBA’s Microloan program on a zero-subsidy cost basis, and eliminates non-credit technical assistance that is widely available through other SBA programs. As currently structured, the program is too expensive, costing the taxpayer 88 cents for every dollar loaned.

Will These Programs Be Enough?

Taken together, these programs would do a great deal to help small businesses, but as far as pulling the nation’s economic chestnuts out of the fire, and thereby generating the kind of prosperity that benefits small business, there is still much more to be done. As long as energy continues to skyrocket, taking almost every other sector of the economy—at least those dependent on transportation—with it, the economy will never be what it can be. In fact, whatever is gained from these programs could easily be lost, drowned in a sea of overwhelming oil costs.

 

In an article written by Chuck Norris entitled “Congress, Get off Your Gas and Drill!” Norris lays out the case to do something now very clearly. Here is an excerpt:

Instead of whining and blaming, Congress needs to take some practical steps now to stop the insanity at the pumps, reduce our dependence on foreign oil, open up some temporary energy production avenues for economic relief (like shale development) and focus more of their taxpayer work time into establishing further alternative ways of producing energy for everything (from coal, electrical, natural gas, hydrogen, solar, nuclear, wind, etc.) Being the wealthiest nation on Earth, there is simply no reason or justification for us to be dependent on fuels that we can't produce in our country.

If you're sick and tired of giving away $2 of every gallon of gas to foreign dictators, making other oil-producing countries, cartels and tycoons rich beyond their imagination, and watching the federal government flail for energy solutions and bow to international powers –all of whom are sucking the very life out of the American people, economy and threatening national security – I implore you to sign and pass along the petition, "Drill here, drill now, pay less" at Newt Gingrich's American Solutions website. We're hoping to send millions of signatures to Congress demanding an immediate emergency session and resolution to our economic and national security crisis revolving around soaring oil and gas prices.

This is what it pretty much boils down to: We are making people who hate us rich, funding the terrorism that is used against us and our allies, and, in the process, we are impoverishing ourselves. This doesn’t have to be the case. President Bush has proposed opening American lands and territorial waters for oil exploration. The mere announcement of that will have an effect on oil prices. Imagine how much more of an effect will come from actually drilling that oil and bringing it to market.

 

The Bottom Line

The U.S. Economy is not made up of discreet sections that can rise and fall without affecting the sections around it. The economy is a complex web made up of many connected and interdependent components. Each of these components have their own issues, but so does the economy as a whole. One may address the specific issues affecting a single component, but unless the more general issues are also dealt with, the results will be marginal at best. Right now, the greatest issue facing Washington is Energy.

 

So, before the Congress and the two presidential candidates can weigh in the idea of domestic energy exploration and extraction, and apply their shiveringly harmful environmental ideologies to kill it, we the people must act. If we don’t, then what good will the rest of these programs really be?

 

Regardless of your politics, if you care about the future of our economy and our nation, visit the American Solutions website and sign and pass along the petition, "Drill here, drill now, pay less." This is a non-partisan effort to reduce energy costs by implementing the only economically viable solution we have—to drill here. On the 6th of June, former House Speaker Newt Gingrich and American Solutions delivered the petition with 350,000 signatures to the Senate. As of today, June 10, 21 days into the campaign, at 11:30am, the signature count stands at 472,946. That is an average of 22, 521 signatures a day! When they get to 500,000, Gingrich and company will give the petition to the House of Representatives and then he and the rest of the organization will try to get more than a million more before the upcoming Democratic and Republican conventions. Let’s see what kind of difference we can make.