The Congressional Black Caucus Hour
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Ms. RICHARDSON. I thank the gentlelady for yielding. I especially want to thank our chairwoman, Congresswoman Barbara Lee, and Congresswoman Fudge, who's been leading, really, this delegation on an hourly basis weeks on end whether the issues are popular or not.
Tonight I'd like to talk about small business and the impacts of unemployment and what it means to our country and really where the jobs are in this country and why we must address small business.
The unemployment crisis is hurting every region of our country--not just one State, east coast, west coast. It's everywhere. In the district that I represent, unemployment is ranging anywhere between 15 and 21 percent. That's well above the national unemployment rate, and clearly we can no longer stand by idly waiting for someone, even if it's in our other body, to act.
The American people need jobs now. They've already asked it, they've already helped to fund it, but unfortunately the jobs have not been seen on Main Street and on the side streets where many of our constituents live. So let's talk a little bit about small business and why they're so important in this equation.
There are 26.8 million small businesses in the United States accounting for more than 99.7 percent of all employer firms. Those are regular people like you
and me who are trying to survive who didn't get a bailout 6 months ago.
Small businesses employ just over half of all of our private sector employees. And likewise, in the second largest district in this United States--which is California, where I'm from--small businesses are an integral part of our economy comprising 90 percent of all of the businesses in our State. More than 50 percent of the employees in California work for small businesses, and there's an estimated 3.7 million small businesses in California.
So why would you ask that I would even talk about that? Let's talk about women and how women are impacted with small business. generate more than $406 billion in sales and employ over 2.8 million people. And when you look at those particular figures and then you break it down to minorities, minorities even further own 4.1 million firms and generate $694 billion and employ 4.8 million people.
So what is the problem and what is it that I brought to the CBC to contribute in terms of a proposal of what we could do to help? We could help small businesses, and we already have the current framework to do so. It's called the SBA. But unfortunately, as with many government agencies, just because something exists doesn't mean it should stay that way. We can always work to make it better.
So when we consider the SBA that was really established in 1953, there are changes that have to occur. And the one that I'd like to talk about tonight is not all of the wonderful training, not all of counseling--all of that we desperately need--but there's a program today that can change and it can be done now. That's our section 8 services.
Section 8 was established to include access to business development opportunities for businesses within that particular financial area, but there's a problem with it. As far back as 1992, magazines and other individuals have highlighted the problems with the section 8 program. The problem is, instead of creating multimillion-dollar business success stories, the section 8 program consistently graduates companies before they're ready to flourish. It gives them a short period of time--7 years, 9 years--to begin to utilize contracts, and then it throws them out without an umbrella or without a safety net.
I would say if we could do a safety net for some of these other Wall Street firms and financial industries, why aren't we holding our hands out to small business?
This has led to a surprising result that many of us have seen, that companies who were able and who were succeeding with the section 8 program, when they were then bumped out, of course, what were the results?
In 1991, SBA studied 645 former 8(a) companies that were doing fine, but prior to them being kicked off, after that point, 42 percent fell through. We can stop that, and we can change it today by four simple proposals that I have for you.
I propose that we reform and modernize the section 8 program to help more small disadvantaged business enterprises, DBEs, to remain in business and to hire more workers--we were talking about over 4 million workers--by doing the following:
One, extend at least 2 years the 9-year program in which section 8(a) certifies businesses to participate.
Number two, we can reinstate those who already did their 7 or 9 years, and they're kind of at the brink, and with a couple more years of help, they could be back on a level ground. We should extend their time as well.
And then thirdly, we should create a new program that's kind of in the middle ground, not of a major company that's bringing in billions of dollars, but clearly a small business that's hiring 10 people, 20 people in your neighborhood. We need for them to exist.
And finally, we should consider that under this program, eligible companies who are able to participate, we should really grow that revenue, because what was $100,000 yesterday that somebody made is not nearly enough in terms of keeping a viable company going.
So, in closing, what I'd like to say to our Chair, Ms. Barbara Lee, and also Ms. Fudge from Ohio, I applaud the efforts that we've taken. The American people want to know what we're doing. What we're doing is caucuses like the CBC are coming together. We're meeting. We're talking about direct jobs. We're talking about keeping teachers and police officers employed. We're talking about helping small business owners stay alive. That's what we're doing, and we're bringing those proposals to the Speaker, to the President of the United States, and we're asking them to act now.
We're ready to vote. We're ready to do our part. But we need to make sure that these dollars go to the American people, which is where they started from.
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