In his opening statement on the House Committee on Small Business's hearing on the Small Business Administration's (SBA) Fiscal Year 2016 budget request, House Committee Chairman Steve Chabot (R-Ohio) raised two questions. First: Are the resources sufficient to help small businesses grow the middle class jobs that America needs? Two: Are the resources allocated in an open and transparent manner?
"It is important to note that there are numerous other policies that are as critical for small businesses as those that will be raised today," said Rep. Chabot. He noted that small businesses need:
- tax reform, given that the current code is "so complex that it is unfair to small businesses";
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- a regulatory regime that protects health and the environment, but without imposing unnecessary costs on businesses;
- markets that are not so burdened by government oversight that "they impinge on their ability to obtain needed debt and equity capital"; and
- a simple system for exports and imports – one that does not require "navigation of a maze-like bureaucracy."
He continued: "Turning to the SBA budget request, I believe that it is more than sufficient to meet the needs of America's entrepreneurs. Where is disagree with the request is in the priorities revealed in the request."
For example, according to Rep. Chabot, the SBA budget makes no mention of hiring additional key personnel who will help small businesses enter the federal contracting marketplace, a key pillar of the Small Business Act.
In addition, the budget fails to allocate additional funds or explain how the SBA will update its loan management accounting system, "which still utilizes 1960s computer technology," he said.
"The budget request disturbingly fails to mention the absence of a Chief Information Officer to oversee implementation of computer technology," he said.
In addition, the budget request makes no mention of resources needed to implement changes made to SBA's government contracting programs that have yet to be implemented.
Instead, Rep. Chabot noted, the budget makes a request for more funds for entrepreneurial outreach programs "that duplicate services provided by existing partners." It also makes a request for a new computer system, the Loan Information Network for Access to Credit, which is intended to help small businesses find SBA lending partners, but that is not requested by Congress.
"The SBA must reconsider its priorities to minimize risk to taxpayers from a $100 billion loan portfolio, while maximizing opportunities that ensure small businesses will continue to prosper and created needed middle class jobs," he said. "That should include a top-down re-examination of the Agency's procedures for creating policy."
Ultimately, added Rep. Chabot, budgeting is about the bottom line for small businesses. "For the SBA, the budget is about accountability," he said. "The budget request is the Agency's defense of its priorities to taxpayers, current small business owners, entrepreneurs, and Congress. If this is the Agency's defense, then it has not gotten that accountability right."
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