Hearing on SBA Budget Exposes Questionable Spending Priorities

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Washington, Apr 24, 2013 | comments

WASHINGTON, D.C. – The House Small Business Committee, led by Chairman Sam Graves (R-MO), today held a hearing to address the budgetary situation of the Small Business Administration (SBA) for the rest of this fiscal year and fiscal year 2014. The lone witness at the hearing was SBA Administrator Karen Mills.

The Committee highlighted the SBA’s substantial increase in requests for new and unproven entrepreneurial training programs while continuing to underfund those programs that are congressionally authorized in the Small Business Act. Further, Committee Members expressed concern that the SBA is seeking to increase participation by lenders in its programs while reducing funds for technology projects that are critical to the agency’s lender oversight, an area where the agency has floundered. Finally, Committee members concurred with the efforts to increase the number of personnel devoted to assisting small businesses in obtaining federal contracts, but asserted that further resources should be allocated to this effort while reducing costs elsewhere in the agency’s budget for fiscal year 2014, including reductions in the SBA’s request for its duplicative entrepreneurial outreach efforts. 

“Small business owners must balance their books every year. In contrast, and despite a federal deficit of $16 trillion, the SBA’s budget proposal does not eliminate overlapping programs,” said Chairman Graves. “Given the deficit, one would think that the SBA would find ways to cut back. Instead, the agency requests nearly $57 million in new funding for entrepreneurial development programs not authorized in the Small Business Act and not proven to create jobs. I’m convinced that services to small businesses can be preserved and even improved while finding savings. That requires the SBA to be clearly focused on its core missions of counseling, capital and contracting, while reducing wasteful spending and duplication.”

Materials for the hearing are posted on the House Small Business Committee’s website HERE.

Notable Testimony

Karen Mills, Administrator, Small Business Administration, Washington, D.C., said, “We know where American jobs come from: Half of all working Americans either own or work for a small business. And these businesses create two out of every three net new private sector jobs in the United States…We also know that for both established firms and startups the opportunity to sell to the federal government can be a game changer.”

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