News From the
Committee on Small Business
Nydia M. Velázquez, Ranking Democratic Member

For Immediate Release
May 23, 2006

CONTACT: Kate Davis, Allyson Ivins, (202) 225-4038

Democrats Call for Fair, Open Process to Reauthorize SBA
With mark-up in limbo, Democrats seek full review of bill

WASHINGTON - Today, Democrats on the House Small Business Committee, in a letter to the Chairman, called for an open process in reviewing legislation to reauthorize the Small Business Administration (SBA).

The focus of the letter was on H.R. 5352, the Small Business Reauthorization Act of 2006, which had been introduced on Thursday, May 11, and the mark-up notice that was issued the same day. H.R. 5352 sought to reauthorize the agency in a limited fashion with little, if any, input from Committee Members in its development. This resulted in over 50 amendments being filed to improve the underlying bill. As a result, the Committee Chairman chose to postpone the mark-up, leaving the next steps in reauthorizing the struggling agency up in the air. This comes at a critical time for the SBA - the Administrator resigned only weeks ago, the agency has come under intense criticism for its response to Katrina, and its budget has been cut nearly in half over the past five years.

"Given the recent barriers that have been facing SBA, it is clear that decisive action by Congress is needed to restore the agency to its full potential," Congresswoman Nydia M. Velázquez, Ranking Democrat, said. "That is why it is vital that all of the necessary steps are taken to ensure that this legislation meets the needs of our nation's small businesses."

Despite numerous GAO and Inspector General (IG) reports on various shortcomings in the agency, H.R. 5352 did not include any provisions to correct these weaknesses. With the postponement of the mark-up, Democrats expressed their hope that the time would be used to fully examine and work together to address the problems at the agency. As a starting point to open up the process, Democrats called on the Chairman to begin with a hearing on the bill, which would ensure the input of all committee Members. Despite the myriad of obstacles that have recently plagued the agency, the committee has held only one full committee hearing this year to examine the challenges at SBA. The lack of oversight exerted by the committee has exacerbated the agency's problems over the past year.

"Utilizing an open process will allow the committee to work in a bipartisan manner to improve the underlying bill and the agency's programs - resulting in a more comprehensive product," Congresswoman Velázquez said.

The pending amendments attempted to address some of the most pressing issues at the agency. As small businesses continue to struggle in accessing affordable financing, measures were to be offered that would lower the cost of capital. Amendments were also filed to correct problems with the agency's disaster loan program, an initiative that has garnered criticism from small businesses and Congress following Hurricane Katrina. In addition, measures were filed that would update and improve the agency's contracting initiatives.

"The reality is that our small businesses are facing challenges everywhere they turn today," Congresswoman Velázquez said. "That is why this reauthorization is more important now than ever - the last thing Congress should be doing is passing a bill that promises a lot but delivers little to entrepreneurs. Democrats will continue to fight to ensure comprehensive reform is achieved, which will enable the SBA to fully meet the needs of this nation's main job creators - small businesses."

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