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Statement of Ranking Member Nydia Velázquez before Committee hearing entitled: "Entrepreneurial Assistance: Examining Inefficiencies and Duplication Across Federal Government Programs"

Statement

of the

Honorable Nydia M. Velázquez, Ranking Member

House Committee on Small Business

“Entrepreneurial Assistance:

Examining Inefficiencies and Duplication Across Federal Government Programs”

March 20, 2013

Across the federal government, departments, agencies, and bureaus of all sizes and shapes are working to help small businesses.  Their efforts run the gamut from providing loans to farmers, to helping manufacturers gain access to foreign markets, to giving grants to improve infrastructure.  Many of these programs have become essential to our nation’s small businesses, which are responsible for creating two-thirds of new jobs.  However, others have shown that are not indispensable, and in many ways are wasteful and duplicative.  Ensuring that these programs can work better together is important – not just for taxpayers, but also for the small businesses that depend on them.

In administering these programs, it is critical that agencies do so in a manner that maximizes efficiency and minimizes waste.  In practice, this means ensuring that rules and regulations are clearly articulated, that a framework for evaluation is in place, and that the initiatives are not simply mirroring other agencies work. It’s imperative that programs are continually evaluated – and it should not take a fiscal crisis to do so.  This Committee – both Democrats and Republicans – have repeatedly pinpointed programs at the SBA that are wasteful and duplicative, irrespective of budgetary politics.  Our Views and Estimates have annually identified tens of millions in wasteful spending that could be reinvested in other valuable programs.  

GAO has also been a regular in this room, as their reports have shown that waste, fraud, and abuse are all too common within the agency that we are responsible for.  From the HUBZone program, to Disaster lending, to coordination between the SBA and Agriculture, the GAO has recommended improvements, many of which have been enacted into law.  Today, I am looking forward to not only hearing GAO’s recommendations about government-wide coordination of entrepreneurial assistance programs, but also the reactions of the SBA and the USDA.

Oversight is not only a responsibility of Congress, however, but also for the agency’s we oversee – and in the case of this Committee, this means the SBA.  Unfortunately, in this regard the agency has not met expectations.  It has established unauthorized “pilot programs” without any performance measures that provide the basis for such oversight. While these initiatives cost taxpayers millions of dollars, the agency has repeatedly failed to use objective metrics to quantify their success or failure. In the last three years, it requested funds to operate seven pilots, including the Small Loan Advantage and Community Advantage program; the Impact Investing and Early Stage Innovation funds; Regional Clusters; the Distance Learning Portal; and the Emerging Lenders program.

The last three of these programs alone cost $15 million.  That’s more than we spend on the Women’s Business Centers, an initiative that is authorized, has performance measures, and is regularly overseen by Congress.   While the original intent may be admirable, once launched, these pilot programs often take on a life of their own, drawing funds away from proven initiatives.

Even among programs that we know work, there is a need for better harmonization.    In its recent report, GAO found that agencies do not coordinate their services.  If they did, the government could lower administrative costs and leverage each program’s unique strengths.  Steps must also be taken to ensure that agencies are conducting meaningful evaluations of their initiatives – rather than just simply “checking the box.” If a program is not working, it should either be fixed or defunded.  Doing so, will ensure that taxpayers are getting the biggest bang for their buck and, equally important, that small businesses’ needs are being met. Today, reducing duplication and improving program performance are not just nebulous bureaucratic catch-phrases.  When applied, they mean better services for entrepreneurs, and greater job creation for the economy. 

Everyone here recognizes the importance of entrepreneurship to our recovery.  As we seek ways to make economic development programs more efficient, we cannot afford to short change small businesses.  Instead, our goal should be ensuring these programs work in concert together, delivering small businesses the help they need. I look forward to today’s testimony on this important topic and thank the witnesses for participating. 

I yield back the balance of my time.

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