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

For Immediate Release
August 11, 2006

CONTACT: Kate Davis or Susan Graham (202) 225-4038

Bush Administration Celebrates Year Anniversary of Energy Bill as Small Businesses Still Struggle Due to Rising Costs
Democrats release report detailing impact on all sectors of the small business community

WASHINGTON - As the Bush administration celebrated the one year anniversary of its energy bill this week, which was supposed to help small business owners, Democrats on the House Small Business Committee released a report showing that small businesses continue to struggle due to rising energy costs.

"The Bush administration promised to provide much needed relief to entrepreneurs last year - it is a year later and small business owners are still being hit with record gas prices and energy costs," Congresswoman Nydia M. Velázquez, Ranking Democrat on the House Small Business Committee, said. "This is just another example of how the rhetoric from this administration simply does not match up with the reality. The truth is that their energy bill has done nothing to address the skyrocketing energy costs that are plaguing small business owners today."

The costs facing small firms continue to climb - in fact there has been a 30 percent increase in gas prices since President Bush signed the energy bill last year, and the Department of Energy reported that gas prices will likely break the record of $3.06 per gallon in the next week. In addition, electricity production is not meeting the current demand - as evidenced by the number of recent power outages throughout the nation. The report examines the unique impact that today's energy crisis is having on small business operations, and how it has caused the various sectors to alter their business models. Also evaluated are the types of stresses rising energy costs have placed on small firms in comparison to their corporate counterparts. In observing the impact on small businesses, Congresswoman Velázquez stated that "it is clear small business owners are facing an energy crisis - and it is worse than many had originally thought - each industry is being hit with monumental challenges in terms of having to cope with these skyrocketing costs."

According to the report, every sector of the small business community is impacted in a different way. From small manufacturers to the trucking industry, restaurants, agriculture and services sector - each area of the small business community has been adversely impacted. Overall, it was found that each industry has been plagued by increased production costs, disruptions in their operations and significant profit losses - all factors which negatively impact small businesses.

"On top of already skyrocketing healthcare costs and interest rates, small businesses are simply being stifled by today's high energy costs," Congresswoman Velázuez said. "Even though the small business community is extremely diverse - this report shows that the energy crisis is greatly hampering each sector's ability to produce and remain economically viable. The administration needs to follow through on their promises and work to address these rising energy costs rather than touting measures that do nothing to provide any relief for the lifeblood of this nation's economy - small business."

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