Small Business Outlook, CNN

February 10, 2004 Tuesday

HEADLINE: Small Business Outlook, CNNfn

GUESTS: Rep. Nydia Velazquez

BYLINE: Ali Velshi

BODY:
ALI VELSHI, CNNfn ANCHOR, YOUR MONEY: Deep cuts in programs aimed at helping small businesses, that was one of the Democrats' biggest criticisms of President Bush's budget presented to Congress last week.

Representative Nydia Velazquez, congresswoman from New York and ranking Democrat member on the House Small Business Committee, says that because of these cuts, entrepreneurs of tomorrow will have less opportunity. She joins me now from Washington to explain.

Congresswoman, thank you for joining us.

REP. NYDIA VELAZQUEZ (D-NY), SMALL BUSINESS COMMITTEE: Thank you for having me.

VELSHI: We, we, we feature the Small Business Administration on our show quite often to explain to our viewers how they can take advantage of government assistance in getting loans to start up their businesses, and they are often telling us that the-that this is a priority of this government, a priority of the White House.

You take a very different view.

VELAZQUEZ: Well, I don't think that the numbers are showing the commitment that this administration have for small businesses. It's not good enough for President Bush to go to New Hampshire, to Missouri yesterday, Springfield, and visit a manufacturing plant, and to talk about all the help that have been given to small businesses and how small businesses is the key to economic recovery.

The problem is that we have a budget that is totally inadequate, and it shows the lack of commitment of this administration to work on behalf of small business.

VELSHI: I guess my question to you is, we have seen a budget now from this administration that cuts out so much in the way of domestic spending, that-do you get the sense that small business spending is singled out as something that's not a priority? Because so many things have not had, have had cutbacks in this budget.

VELAZQUEZ: I don't see the logic from this administration for cutting economic development programs and loan programs that have proven that they are successful in helping small businesses, in providing economic tools. For every dollar that this administration, that the government spend on small businesses, they get two or more in tax revenues.

So I do not understand why the president insist in making tax cuts permanent, and then at the same time cutting those programs that are so important for small businesses.

VELSHI: Well, how important is the SBA? The role that most small businesses have, the relationship that most small businesses have to the Small Business Administration is that the SBA will guarantee loans that typically they wouldn't be able to get on their own from a financial institution. What's the net effect of a cutback in SBA loans?

VELAZQUEZ: Well, this problem has been happening for the last two years, and last year both small businesses and the Democratic members of the Small Business Committee told the administration that the allocation that they presented, that they requested for the 7A loan program-the 7A loan program is the flagship program of the Small Business Administration, providing close to 40 percent of all long-term loans for small businesses in this nation, 40 percent.

That is a lot of capital. And when you talk to the small businesses, especially at a time when we are facing a downtown-a downturn in our economy, this is not the right decision. It's not the right time for this administration to do this.

VELSHI: Congresswoman, let me ask you this. This is obviously a passionate issue for you, because you're the ranking member on that committee, you're the senior Democrat on that committee. But you, like me, are watching these Democratic primaries and caucuses, and we're hearing some very impassioned pleas from the candidates. This isn't one of them. This is not one of the things we're hearing from the candidates as a priority.

Are you concerned this may not even be a priority in your own party?

VELAZQUEZ: Well, the problem is that people need to-well, look, I guess that when they talk about the economy and the lack of job creation, they're talking about small businesses. Small businesses are the number-one job creator of our economy. So you can't discuss the state of our economy without referring to small businesses.

So if we want to get this economy back on track, we must insist in providing every economic tool that will help small businesses grow and expand. And also, history has told us and has shown that every time we face a recession, this is the time when we have a lot of workers that have been laid off, and they decide to start up their businesses.

This is why it's so important that we have all these programs that are aimed at helping startup businesses, women-owned businesses, minority businesses, the technology and the manufacturing sector.

So I hope that this administration really understand the importance and the role that small businesses play in our economy.

VELSHI: Well, we'll be bringing...

VELAZQUEZ: And also...

VELSHI: Yes, go ahead.

VELAZQUEZ: And also, the Democratic candidates...

VELSHI: Yes.

VELAZQUEZ: ... they have to understand that.

VELSHI: Yes. I'll be paying close attention after this discussion to hear hopefully you succeed in getting this in their ears, so we start hearing this in their very impassioned stump speeches. (UNINTELLIGIBLE) it's a, it's an interesting time, because they're talking a lot about health care and they're talking a lot about jobs, which appeal to many, many people.

This one doesn't ring as clearly across the land, but I get the sense that you and your colleagues feel that it is important. Thank you for being with us.

VELAZQUEZ: One thing I can tell you is that one of the Democratic candidates was the chair of the Small Business Committee. So I hope that at some point they will start talking about the role of small businesses...

VELSHI: Yes.

VELAZQUEZ: ... in our economy.

VELSHI: Who, who is that, who is that candidate?

VELAZQUEZ: (UNINTELLIGIBLE) it is John, John Kerry.

VELSHI: All right. Hank you very much, Congresswoman Nydia Velazquez of New York's 12th District joins us from Washington, D.C.

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