| Weekly Update from Sam |
Dear Friends,
One of the biggest issues faced by small businesses today is the inability to access sufficient credit and capital. As you are well aware, many small businesses lack the resources of their larger counterparts and often rely on capital financing to carry out their daily operations.
Small firms need diverse ways to access capital to start their business, invest in their company, and meet unexpected challenges. To help address this, the Small Business Administration (SBA) plays a role in meeting the credit needs of many small businesses who can’t access financing through a traditional bank loan. So, considering recent reports that small business lending is down nationwide, it is more important than ever to ensure that SBA’s lending programs are functioning with integrity and efficacy.
This week, the Committee discussed SBA’s management of its capital access programs with Administrator Karen Mills during a hearing on Wednesday. The meeting provided any opportunity to examine the Administration’s responsibility of overseeing a credit and equity portfolio of more than $90 billion. Our Committee expressed the concern that, as SBA’s taxpayer-funded subsidy costs are increasing, it is important that they explore ways to reduce taxpayers’ exposure, while still making credit opportunities available to small businesses. That means effective management, streamlining applications, and putting into place transparent policies that lenders can rely on to make good loans.
Sam Graves
Chairman
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Latest Committee Action
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As mentioned above, the Small Business Committee held a hearing with SBA Administrator Karen Mills about the state of SBA’s lending programs. After a recent report from the SBA’s Office of the Inspector General expressed concerns about the agency’s ability to manage risk in its loan programs, the Committee was interested in learning more about the specific procedures the SBA has in place to oversee its more than $90 billion credit and equity portfolio. Administrator Mills told the Committee that in addition to enhancing supervision of the lending programs via “aggressive enforcement against problem lenders, loan agents, brokers and packagers, and loan applicants,” she is aware of the need for strong “oversight culture” at SBA as the agency moves forward in making capital available to small businesses.
Yesterday, the Small Business Subcommittee on Contracting and Workforce, under the leadership of Rep. Mick Mulvaney (R-SC), examined opportunities for small businesses in the General Services Administration’s (GSA) Multiple Award Schedule (MAS) Program. The MAS Program (responsible for approximately 10% of all federal contracting dollars) is designed to make commercial goods and services easily available for purchase by federal agencies. Specifically, the Subcommittee was concerned with ensuring that small businesses are able to continue to participate in the MAS Program as it evolves, with specific attention paid to Brooks Act provisions, voluntary set-asides, strategic sourcing, and the GSA’s proposed Demand Based Efficiency Model.
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Special News Report
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On Wednesday, Fox News' "On The Record With Greta" show highlighted last week's Small Business Subcommittee hearing on the estate tax. The current estate tax law rate is 35%, with an exemption of $5 million. If Congress does not act on this policy, the estate tax will revert to pre-2001 levels of a 55% rate and a $1 million exemption on January 1, 2013. Small firms already have an avalanche of tax increases that await them at the end of the year, including the expiration of the 2001 and 2003 tax cuts and new health care law taxes. The report highlighted the fact that the estate tax is yet another burden that job creators must worry about.
CLICK HERE to view the report
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News From Washington
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On Wednesday, the House passed the Energy and Water Appropriations Act of 2013 (H.R. 5325) by a vote of 255-165. The $32.1 billion spending bill, $965 million below the President’s budget request, appropriates fiscal year 2013 funds to the Department of the Army, Department of the Interior, Department of Energy, and other governmental entities for projects pertaining to water and energy usage. The bill also includes a provision that makes it unlawful for any agency receiving these appropriations to hire anyone who hasn’t been verified through the E-Verify Program.
Yesterday, the House passed the Protect Medical Innovation Act of 2012 (H.R. 436) by a vote of 270-146. This bill eliminates the 2.3% excise tax levied on manufacturers of medical devices as part of the President’s healthcare law. This tax cut is expected to decrease federal revenue by approximately $29 billion over the next 10 years, but will be paid for by the eventual elimination of approximately $44 billion in expected overpayments of insurance subsidies to taxpayers through the healthcare law. The bill is expected to provide cost-savings to the manufacturers of these devices, which will be passed on to the healthcare entities and patients who rely on them.
Late last night, the House passed the Department of Homeland Security Appropriations Act of 2013 (H.R. 5855) by a vote of 234-182. This bill provides $39.1 billion in discretionary funds to the Department of Homeland Security for fiscal year 2013, down $484 million from fiscal year 2012 levels, and $393 less than the President’s request.
Today, the House passed the House passed the Legislative Branch Appropriations Act of 2012 (H.R. 5882) by a vote of 307-102. The bill provides annual funding for the offices of Members of the House of Representatives, the support agencies of Congress, services for visitors, and Capitol operations and maintenance.
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| June 8, 2012 |
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