News From Congresswoman
Nydia M. Velázquez
Representing New York's 12th Congressional District - Brooklyn, Manhattan, Queens
Ranking Democratic Member, House Small Business Committee

For Immediate Release
June 24, 2004

CONTACT: Wendy Belzer, Kate Davis, (202) 225-4038

Republicans Continue to Block Funding for Key Small Business Programs
Lending initiatives receive no funding, despite bipartisan support

WASHINGTON - Yesterday, the House Appropriations Committee adopted legislation that cuts key small business loan, technical assistance and entrepreneurial development programs. Under the Commerce-Justice-State (CJS) spending bill several programs received no funding - a move that will drastically hinder the ability of this nation's entrepreneurs to create jobs.

The Small Business Administration (SBA) received $74 million less than it had received under last year's legislation. Congresswoman Nydia Velázquez, Ranking Democrat on the House Small Business Committee called this latest action, "totally inadequate and absurd considering small businesses are the main job creators and rely on these critical programs for their success."

The appropriations bill cut several small business programs, including the Women's Business Center (WBC), and zeroed-out the BusinessLINC program - two initiatives that provide technical assistance and support to start-up businesses. Also surprising, is the CJS bill provides no funds for any of SBA's lending programs, including the 7(a), Microloan and New Markets Venture Capital programs.

These lending programs are vital to small business - the Microloan program, which provides loans and technical assistance to low-income or unemployed entrepreneurs, provided $26.5 million in loans and an additional $15 million in technical assistance last year. Congresswoman Velázquez highlighted the issue, "We say we want to move people from welfare to work - well the Microloan program moves people from welfare to business-ownership. It is unbelievable that a program with such an extraordinary record of empowering low-income entrepreneurs could receive no funding."

The refusal to provide funding for SBA's flagship 7(a) Loan Program was most striking, despite a large bipartisan effort from over 150 Members of Congress, including 65 Republicans, to have the program funded at last year's level of $79 million. The Republican leadership rejected a Democratic amendment to fund the program, and instead provided no funding, which will result in an increase in fees on lenders and small businesses. "Failing to fund the 7(a) program will be devastating to small business - depriving them of capital, driving lenders out of the program, and resulting in fewer small business options," Congresswoman Velázquez said.

"Sadly, this latest announcement does not surprise me - the rhetoric never matches the reality with Congressional Republicans and the Bush administration," Congresswoman Velázquez. "If small business was truly a priority to them, then these critical programs would receive adequate funding. These are the programs that allow our nation's entrepreneurs to create the jobs we so desperately need - there is absolutely no sense in cutting their spending at a time like this!"

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