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Straight Talk E-News
Small Biz Straight Talk
Washington,
June 19, 2009
Friday, June 19, 2009 News from Ranking Member Sam Graves and Committee Republicans: • Ranking Member Graves wants to Slow Energy Legislation Must-Reads from the Week: • The New York Times: The Little Guys Get Their Bailout (Sort Of) Administration and the SBA: • Earlier this week President Obama gave a healthcare speech before the American Medical Association (AMA) defending his government-run health care plan. This came after the AMA announced its opposition to any sort of a government-run plan that would directly compete with the private insurance industry. Conservatives remain strongly opposed to a government-run option because of fear that it will worsen the quality of healthcare service provided in this country. The Senates top Republican said after the speech. “Americans don’t want a government-run system that puts bureaucrats between patients and doctors,” Senate Minority Leader Mitch McConnell (R-KY.) said. “They certainly don’t want the kind of government boards that exist in places like New Zealand and Great Britain that deny, delay and ration treatments that are currently available to Americans.” • Four months after the enactment of the Economic Stimulus bill, the Small Business Administration finally launched a program designed to get capital out to America’s struggling small businesses. The America’s Recovery Capital Loan Program (ARC loans) provides interest-free loans of up to $35,000 to qualifying small businesses. Private banks make the loans but the government guarantees them, minimizing risk for the banks. However, many banks have expressed concerns about the loans because they are unsure of how they will work. Review of House Activity: • On Tuesday the House passed the Conference Report on H.R. 2346, the Supplemental Appropriations Act. The $106 billion bill passed by a vote of 226-202. The legislation is mainly to fund operations in Iraq and Afghanistan through September. Objections were raised due to the inclusion of $5 billion related to the International Monetary Fund and the absence of a Senate provision to bar the release of detainee abuse photos. The Supplemental later passed the Senate on Thursday evening after efforts to strike the “cash for clunkers” provision were defeated. • On Thursday, H.R. 2847, the Commerce, Justice, and Science Appropriations Act passed in the House by a vote of 259-157. This bill is almost 12% (11.7% to be exact), more than last years bill or an increase of $6.8 billion. The Bill funds the Departments of Commerce, Justice and Science (including NASA) among other smaller agencies. • On Friday, the House is expected to pass H.R. 2918, the Legislative Branch Appropriations Act. This bill funds Congress, the Library of Congress, U.S. Capitol Police, Congressional Budget Office, Government Accountability Office, and the Capitol Visitors Center for the next fiscal year. It appropriates $3.68 billion, a 7 percent increase over 2009. Legislation and Letters Circulating Around the House: • Rep. Kline (R-MN) seeks Co-Sponsors for the Auto Dealers Pension Fairness Act (H.R. 2793)- Congressman Kline introduced H.R. 2793, the Auto Dealers Pension Fairness Act. This bill would protect auto dealers who are being shut down as part of the reorganization of Chrysler and GM from being assessed or forced to pay any “withdrawal liability” pension payments to union pension plans until Congress has a better understanding of the federal government’s role and responsibility for these restructurings. The bill directs the President’s Task Force on the Auto Industry to report to Congress on its role in restructuring these auto companies and determining which dealerships would be closed as part of this reorganization. It further requires the Task Force to report on its economic analyses and rationales, the aggregate pension liability being imposed on closed dealerships, and any job loss and economic impact assessments made by the Task Force. Finally, H.R. 2793 prohibits the imposition of withdrawal pension liability on these dealerships until 60 days after the Task Force reports to Congress, providing ample time to assess the federal government’s role in these closures and determine an appropriate course of action with respect to pension obligations incurred as a result of these closures. For more information on this bill, please contact Yelena Vaynberg at yelena.vaynberg@mail.house.gov or 225-2271. Review of Senate Activity: • On Thursday the Senate Committee on Small Business and Entrepreneurship conducted a Small Business Administration Reauthorization markup on S. 1229, the Entrepreneurial Development Act of 2009, and S. 1233, the SBIR/STTR Reauthorization Act of 2009. Together these bills reauthorize the SBA’s counseling programs and research and development programs that stimulate innovative research in the small business community. The legislation was unanimously passed out of committee and now awaits consideration before the full Senate. For more information on the markup than please visit the Committee website. House Small Business Committee hearing summary this week: • On June 17, 2009 the House Committee on Small Business held a hearing titled “Legislative Initiatives to Strengthen and Modernize the SBIR and STTR Programs.” The witnesses who provided testimony to the Committee were: Scott Koenig, M.D., Ph.D., President & CEO of MacroGenics, Inc. in Rockville, MD; Mary B. Dwight, Vice President of Government Affairs for the Cystic Fibrosis Foundation in Bethesda, MD; John Stocker, Senior Vice-President of Federal Solutions at Lynntech, Inc. in College Station, TX; testifying on behalf of the U.S. Women’s Chamber of Commerce was Ning Li, Chief Resource Officer of PD Inc. of Baltimore, MD; and Derek K. Rapp, Chief Executive Officer of Divergence, Inc. in St. Louis, MO The hearing focused on legislative proposals to reauthorize the Small Business Innovation Research (SBIR) and State Technology Transfer (STTR) Programs. All of the witnesses expressed their support for these programs, stating that they are an excellent examples of a public-private partnership designed to stimulate technological innovation among small firms while providing government agencies new, cost-effective, technical and scientific solutions to meet their diverse needs. Created in 1982, the SBIR Program offers competition-based awards to stimulate technology innovation among small firms while providing government agencies with new, cost-effective, technical and scientific solutions to meet their diverse needs. Winning an SBIR or STTR grant not only provides initial funding for the development of an idea, it often validates the initiative and spurs private investment. In times when banks and traditional lending institutions are tightening their purse strings, we ought to be looking at ways to spur such investment. The SBIR and STTR programs are exactly the types of government programs that provide such a service. The topic that dominated much of the discussion was the eligibility of venture capital backed small businesses. Currently, the SBIR program does not allow small businesses with more than 50% of venture capital ownership to apply for SBIR funds. Recent estimates have indicated that since the 50% ownership restriction was instituted, applications for SBIR grants have been on the decline. For example, the National Institutes of Health, one of the largest grantors to medical technology companies, reported application reductions of 11.9 percent in 2005, 14.6 percent in 2006, and 21 percent in 2007. However, the subcommittee is considering a proposal under which companies would be able to apply for SBIR assistance as long as one venture capital company does not own more than half of the small business. Nearly all of the witnesses on the panel, comprised mostly of small business representatives, noted that this is a positive change that would allow additional applicants to be considered, increase competition within the SBIR program, and would be beneficial to their business. • The Committee on Small Business Subcommittee on Rural Development Entrepreneurship and Trade held a hearing on June 18th entitled, “Textile Import Enforcement: Is the Playing Field Level for American Small Businesses?” Majority witnesses included Daniel Baldwin of the U.S. Customs and Border Patrol, Loren Yager of the Government Accountability Office (GAO), Harding Stowe of R.L. Stowe Mills, Dan Nation of Parkdale Mills, Inc., and Richard Crichton of MRC Consulting Services, Inc. and Erik Autor of the National Retail Federation. This hearing was an opportunity to explore the effectiveness of methods currently employed by U.S. Customs and Border Patrol to deter textiles and apparel from entering the country illegally. Until 2005, the primary motivation for importing illegal textiles and apparel was to avoid quotas imposed by the United States and tariffs. Since these quota restrictions no longer exist and barriers to trade have been falling at a staggering pace, fewer manufacturers have reason to use illegal methods to get their products into the United States. In his testimony, Loren Yager of GAO said that, for those who do want to avoid customs laws, the current methods used by the Customs and Border Patrol have improved in recent years but more work needs to be done. However, in contrast, Erik Autor of the National Retail Federation stated in his testimony that expanding Customs and Border Patrol protections would not only require additional resources but could also cause an undue burden to small businesses who import and currently struggle to adhere to all of the regulations in place that ensure their legal imports are in fact legal. Currently, there are no further hearings scheduled on this topic. Other Small Business off the Hill: • The Kaiser Family Foundation released a survey showing health care reform faces challenges. • The Heritage Foundation released an economic study on how Cap & Trade will impact farmers Looking Forward:
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