Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 2007

SCIENCE, STATE, JUSTICE, COMMERCE, AND RELATED AGENCIES APPROPRIATIONS ACT, 2007

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Ms. VELÁZQUEZ. Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, when we talk about targeted policies that are aimed at improving the economic environment for small businesses, we are talking about this amendment. This is a bipartisan measure that has passed the House for the past 2 years.

Lowering the cost of the Small Business Administration's 7(a) loan program is a fiscally responsible, commonsense solution that will result in job growth and increased revenue.

The truth is that the program is simply too costly for this Nation's small businesses. The cost for start-up loans has increased by nearly $1,500 to $3,000, and for more established small businesses, the total cost can be as high as $50,000. This is money our Nation's small businesses are paying directly to the Federal Government.

As a result, entrepreneurs today are getting a more expensive loan that is almost 50 percent smaller than what it was just a few years ago, limiting their ability to start and expand their ventures. In fact, recent SBA figures show that the program is doing $160 million less than it was during the same time the previous year, showing how these rising costs are having an impact on lending.

This amendment would reverse this effect and would lower the cost of the 7(a) loan program.

To compound the problem further, entrepreneurs are also finding that they have fewer places to go to access this financing. In fact, the number of lenders willing to offer 7(a) loans has dropped in half over the past several years, leaving small firms scrambling to find vital sources of capital.

Today is an opportunity for us to take action to help relieve our small businesses of these burdens.

Fees have been raised four times over the past 2 years and are already at their maximum level. If we were to see a significant increase in interest rates, experience an economic downturn, or a regional crisis like what we saw in the gulf coast, this program would not be able to support itself. The result would be caps, limits on loan sizes, and even the shutdown of the program altogether. The adoption of this measure will enable us to avoid this type of lending crisis in the future.

This amendment is fiscally responsible and uses offsets from four different salaries and expense accounts so that no one agency is disproportionately harmed. In fact, it only takes $10 million from each agency, which amounts to less than 1 percent of the four S&E accounts.

Nearly 20 prominent small business groups are in support of this amendment, up from 14 last year, illustrating the demand from our Nation's small businesses for this type of action.

This is a program that is now doing nearly a half billion dollars less since the fees were raised. It is clearly not doing better, and it is certainly not benefiting this Nation's small businesses.

A ``yes'' vote is a vote to help this Nation's small businesses move forward as the drivers of our economy. I strongly urge my colleagues to vote for this amendment.

Mr. Chairman, I reserve the balance of my time.

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Ms. VELÁZQUEZ. Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, the chairman of the Small Business Committee is saying that it will cost small businesses only 10 bucks a month. Well, these are the facts coming from the Small Business Administration: Costs have gone up $1,500 to $3,000, and now many small businesses are paying as much as $50,000 to the Federal Government. Lending is down $160 million from this time last year and $400 million below before the fee increases were adopted. Fees are at the statutory limit, which means that any more costs will result in program caps or a shutdown.

Today, there are only half as many lenders making 7(a) loans. The 7(a) loans are 40 percent smaller than they were a few years ago. Lending last year was $2 billion below what the agency claimed they would do.

Those are the facts. And the chairman keeps talking about the banks and how taxpayers' money is paying $50,000 to the government, benefiting the banks. The only greedy one here is the Federal Government, which has increased four times their fees in the past years.

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Ms. VELÁZQUEZ. Mr. Chairman, I would just like to make a point of clarification that the $10 million is not taken from the blast mitigation, but from salary and expenses.

Mr. Chairman, today's amendment is about improving the economic environment for this Nation's small businesses. 7(a) loans cost twice as much today for small businesses, are nearly 50 percent smaller and the program is doing nearly a half a billion dollars less than before the fee increase was implemented. Women and veteran business owners receive $100 million less in lending this year, and rural business owners receive $300 million less. Just look at the numbers here. Enough is said.

This amendment will change this and allow small businesses to invest back into the firms, and, in turn, the U.S. economy. If you believe that small businesses, which make up the majority of our taxpayers, should be able to keep their money, then you need to vote ``yes'' on this amendment. However, if you prefer to see our government grow, rather than the U.S. economy, then you should vote against this measure today.

I urge my colleagues to vote ``yes'' on this measure.

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