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STATEMENT

of the

Honorable Nydia M. Velázquez, Ranking Member

House Committee on Small Business

Markup of Views and Estimates on SBA’s FY 2014 Budget

March 27, 2013

As we sit here, we are hours away from $85 billion in across-the-board budget cuts.  In that light, I would suggest the SBA’s budget offers a stark example of how reducing successful programs – some of which actually generate two dollars of tax revenue for every one we invest - is pennywise and pound foolish.

Consideration of this year’s views and estimates certainly comes at an odd time - before we have a proposed budget to examine.  While submission of this document to the Budget Committee is an important aspect of the Committee’s work, doing so without an actual budget to critique seems like a questionable exercise.

Some parts of the Majority’s views and estimates do make sense.  For example, eliminating many unauthorized initiatives, or so-called “pilot programs” is a wise move, especially given current fiscal constraints.  Time and again, these initiatives have been found to be ineffective and costly.  They divert valuable resources away from proven programs authorized by Congress.  Pilot programs are simply a luxury the SBA can no longer afford.

However, there are several areas of concerns with the Views and Estimates.  First and foremost, eliminating funding for most Entrepreneurial Development programs is absolutely the wrong direction.  Doing so would leave startups without support to succeed when we need those enterprises to grow and create jobs. Make no mistake –the ED programs need reform.  However, drastic, across-the-board cuts, without a legislative fix, is as ill-conceived as the sequester.

If the views went too far in terms of the ED program, they fall short in terms of small business contracting.  For yet another year the government failed to meet its 23 percent small business goal, depriving small firms of $3.1 billion in contracting dollars.  The solution proposed in the draft views is to reallocate funds and rely on the existing structure of PCRs and OSDBUs.  This has not worked in a decade and there is no evidence suggesting it will work now.   We should be exploring innovative ways to meet contracting goals, not maintaining the current, broken system that fails small businesses.

Taken in its entirety, these views are a mixed bag. However, I think we all agree more must be done at SBA in terms of setting priorities.  I look forward to working with the Chairman and all my colleagues to achieve this goal.

The success of the American economy depends on small businesses accessing capital, receiving technical support, and securing federal contracting opportunities.  We should continue supporting the SBA in delivering these services.  However, accomplishing more with less requires the SBA to make changes, like recommitting itself to existing programs that actually work.  Doing so will bring tangible benefits to small businesses and make sure taxpayers see a positive return on their investment.   Thank you and I yield back.

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