Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2005

DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED AGENCIES APPROPRIATIONS ACT, 2005 -- (House of Representatives - July 07, 2004)

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Mr. CASE. Mr. Chairman, I rise in strong support of the Manzullo-Velázquez amendment. I came to this Congress and asked to serve on the Small Business Committee. Coming from a State that has 96 percent of its businesses as small businesses, 60 percent of its businesses as minority-owned businesses, I came here ready to roll up my sleeves believing that Washington, D.C. cared about small businesses.

Let us put this amendment into perspective and ask ourselves is that true. As we look at the actions of this administration, and many times this Congress, Members have to say that small business has not been treated well. I have sat on the Committee on Small Business, as bipartisan a committee as there is in this Congress, where we are all trying to help small business, and I have watched as the discussion has turned to small businesses being squeezed out of the Federal procurement process. I have watched as we have had hearings on all of those measures to help small businesses, from reducing paperwork, the Paperwork Reduction Act, and instead we see this administration presiding over increases in paperwork. Regulatory relief, this administration presiding over huge increases in regulation, and the Small Business Administration coming in to us and trying to defend the actions of the Office of Management and Budget telling them to cut, and we see the pain in their eyes when they have to carry that policy down here.

Now we find ourselves facing an amendment that should never have had to have been brought to the floor of this House to preserve a program which has been the flagship program of small business, and we are being put in a box where we have to elect between two different things that we both support. Of course we support it.

But I have to ask, why do we not take a look at the billion dollar sole source contracts for huge businesses that are out there? This is a blip on the radar screen when we compare it to that. This is not about banks. Banks are consolidating. Big banks are getting bigger. Small banks are getting wiped out. Small banks serve small businesses; small businesses are not cared for by the big banks. They are being squeezed out. Take it to a rural community in my district, Na'alehu, a small mom and pop operation, trying to get just a little capital to get going; and if they are going to the big banks, they are not going to get that capital.

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Mr. Chairman, I rise in strong, unqualified support of the bipartisan Manzullo/Velázquez amendment to save the Small Business Administration's section 7(a) small business loan program.

Mr. Chairman, the Small Business Administration (SBA) was created 51 years ago by President Dwight D. Eisenhower to meet a critical nationwide capital shortage. SBA's top priority was to provide small companies with access to capital through its lending programs. The 7(a) loan program is the signature program within the SBA. Over the last decade, the SBA has approved more than 424,000 loans for over $90 billion, assisting countless small businesses across the country with their basic capital requirements.

Tragically, funding of the 7(a) program is in grave danger of being eliminated. Should the administration prevail in its attempt to dismantle this proven program and Congress proceed on its current path, our Nation's small businesses would have to bear an additional $80 million in SBA expenses, and the fees per loan would increase by over $1,000. These loans are the only source of affordable, long-term financing for many of our Nation's small businesses, as 7(a) loans spur economic development in underserved areas, are used to purchase land or buildings or expand existing facilities or buy new equipment, machines, or even furniture, and provide long-term working capital including accounts payable-allowing small businesses to start and continue in business where otherwise if may not be possible.

In my own state of Hawai'i, for example, the viability of small business is the linchpin to economic vitality. In 2002, the most recent year for which numbers are available, the SBA Office of Advocacy estimates that there were 28,800 small businesses in my state, representing 96.7 percent of all business in Hawai'i.

Hawai'i is also home to one of the largest percentages of minority-owned businesses. Minority-owned businesses represented 57.8 percent of the state's businesses and they generated $14.8 billion in revenues in the most recent year for which this data is available.

The SBA and its programs are critical to the sustainability of our economic base. In Hawai'i, FY03, the SBA made 269 loans worth nearly $29 million. Of that number, 132 of those loans, worth nearly $15 million-nearly half of all loans-were made to companies operating in the rural communities of the Second District that I represent.

The situation is even more promising for my state in this fiscal year. Through May 31, 2004, the SBA had approved 260 loans, worth about $18.5 million to Hawai'i small businesses. Rural small business have received 61 of those loans-representing over $6 million.

The 7(a) program is also crucial to small businesses because of recent consolidation of banks and other financial institutions throughout the country. My state is no exception. According to the Federal Reserve Board, there were 13 small-business-friendly banks in Hawai'i in 1998. In 2002, that number had shrunk to 7. Of those seven in 2002, four had assets between $1 billion and $10 billion. Because small business traditionally depend on local banks services and use commercial bank lenders, this recent consolidation has not had a positive effect upon lending to small businesses.

During my time in Congress, as a member of the House Committee on Small Business as well as the Blue Dog and New Democrat Coalitions, I have argued for fiscal responsibility during our budget and appropriations process. The SBA's 7(a) program is a perfect example of a federal effort that is entirely consistent with this needed approach, for it both increases revenue-generating economic activity and pays for itself. By supporting, nurturing and growing small businesses, we are allowing these companies to increase in size, revenue, employment and purchasing power, ultimately benefiting the community where that company is located as well as the country as a whole. And these are repayable loans, not outright grants.

Mr. Chairman, this is a crucial amendment for all concerned, not least the small businesses of my Second District of Hawai'i. According to a survey published by the National Federation of Independent Business in May of this year, the top three "severe problems" for small-business owners is cost of health insurance, liability insurance and workers' compensation. Let's not give these small businesses one more reason to fail in these trying times. Let's pass this important amendment. It is the right thing to do, and I implore my colleagues to support the Manzullo/Velázquez amendment and support the underlying bill.

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