House Committee Marks-up SBA Budget
March 16, 2011

The U.S. House Committee on Small Business held a mark-up on Tuesday for the U.S. Small Business Administration (SBA) FY 2012 budget. As required by House Rules and the Congressional Budget Act, the Committee is required to report its Views and Estimates—which is a document incorporating the Committee’s approval and/or proposed changes to the administration’s proposed SBA budget—by this Friday, March 18.

 

The committee held a hearing last week to discuss the administration’s proposal, during which both Republicans and Democrats criticized the proposal due to the nation’s current fiscal situation and the funding of several new, unauthorized pilot programs.

 

While the administration requested $985 million—down slightly from their allocations of $993 million in FY 2011 and $824 million in 2010—the committee approved a funding level that cut nearly $100 million from the administration’s proposal. The committee highlighted numerous cuts to the proposal, citing time and again, duplication either within SBA or with other government services.

 

Among the various cuts endorsed by the committee’s Views and Estimates:

  • Eliminating regional directors and deputy district directors
  • Cutting funds altogether from the SBA Office of Policy and a 10 percent cut in funds for the Office of the Administrator
  • Eliminating the Emerging Leaders program and Regional Innovation Clusters
  • Cutting the Drug-Free Workplace Program—for which the administration also recommended termination
  • Eliminating the Office of International Trade, including cutting the $30 million state export promotion pilot program as well as increased SBA personnel at Department of Commerce Export Assistance Centers, as passed under the Small Business Jobs Act, and eliminating export staff in regional SBA offices
  • Eliminating the Office of Native American Affairs
  • Cutting the Prime Technical Assistance program for microenterprises—for which the administration also recommended termination
  • Eliminating the Veterans Business Outreach Centers—though not a cut to all SBA’s veteran business development programs
  • Eliminating the Women’s Business Centers and redirection of a portion of the funds to SBDCs
  • A $2.5 million reduction in microloan technical assistance
  • Reducing by $1.1 million the 7(j) technical assistance
  • Eliminating the Community Express Loan Program—also recommended by the administration
  • Eliminating funds set aside in the 504 program for commercial refinancing as approved by the Small Business Jobs Act
  • Rescinding funding for the Small Business Lending Intermediary Pilot Program

Given that many of the proposed reductions steer small businesses toward SBDCs for technical assistance, the committee recommended an increase of $5 million for SBDCs. The Committee also recommended increased funding over the administration’s proposal for the SBA Inspector General, contracting programs and Procurement Center Representatives. The committees Views and Estimates calls for a shift in funds from the 8(a) program to the HUBZone program for accountability purposes, and recommends funding be set-aside to expedite SBA’s evaluation of their size standards.

 

Justifying the cuts, Committee Chair Sam Graves (R-Mo.) stated, “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.”

Underscoring the desire of the committee that SBA focus on its core capabilities, Ranking Member Nydia Velazquez (D-N.Y.) commented during the hearing that, “Little attention is also paid to solving SBA’s most pressing problems, such as the ongoing fraud in its contracting and delegated authority in its lending programs. If we are going to spend additional money, it should go toward cleaning up waste and abuse -- so that the agency’s existing programs actually work and help small businesses.”

Velazquez supported many provisions offered in the majority’s outline of the Views and Estimates, but expressed concern with their proposed elimination of funding for the Veterans Business Outreach Center, among other key issues. She went on to say that she plans to submit the minority’s Views and Estimates in addition to the majority’s document approved by the committee.


Please click here to view the committee’s full Views and Estimates.