Hearing of the House Small Business Committee - The Small Business Administration FY 2012 Budget

Statement

Good afternoon. I call this Small Business Committee meeting to order.
Two weeks ago, the Committee heard from Administrator Mills about the Small Business Administration budget for 2012. The Committee now has the opportunity to provide its opinion on the budget for the SBA. The views and estimates considered today will be transmitted to Chairman Ryan for incorporation into the Congressional Budget Resolution.

The past few years have been very difficult for small businesses. They have had their credit lines cut, lost customers, and laid off workers. These businesses have had to reduce their expenses including overhead.

The federal government faces similar fiscal constraints. The chasm of the deficit requires tough choices must be made. Unfortunately, a review of the SBA budget shows no effort to make tough choices. In fact, the Administrator wants to start new initiatives -- initiatives that are unlikely to help small businesses create jobs. Further, the Administrator makes no effort at reducing a bloated headquarters operation. That is simply unacceptable. And finally, there appears to be no effort put forward by the Administration to eliminate duplicative programs are costing taxpayers millions.

The views and estimates before us cut nearly $100 million from the SBA budget. Fourteen programs are defunded because they duplicate existing programs at the SBA or at other agencies. Other programs receive no recommendations of funds where there is an absence of any evidence that they will help small businesses create new jobs.

Despite these cuts, the core functions of the SBA to make capital available, provide advice, and increase utilization of small businesses as federal government contractors are preserved. In fact, through judicious reallocation of funds, the services available to entrepreneurs will be improved over the SBA budget proposal.

The Committee recognizes the potential for fraud and abuse in various SBA programs. As a result, the views and estimates provide additional funds for modernizing the Loan Management Accounting System and the Office of the Inspector General to address those very concerns.

Finally, but for the need to fund SBA guaranteed lending programs without which small businesses cannot obtain needed capital to create jobs, the Views and Estimates under consideration today represents a $155 million cut in the SBA budget request from FY 2010.

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