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
July 9, 2004

CONTACT: Kate Davis, Allyson Ivins, (202) 225-4038

House Spending Bill Passes with Funding for Critical Small Business Loan Program
Legislation includes amendment to restore funds, despite opposition from Bush

WASHINGTON - Yesterday, the House of Representatives passed The Commerce, Justice and State (CJS) spending bill, H.R. 4754, with a vote of 397 to 18. Small businesses across the country will be able to breathe easier with adoption of the legislation, which restores funding for small business loans, despite opposition from the Bush administration.

Congresswoman Nydia M. Velázquez (D-N.Y.), Ranking Member of the House Small Business Committee, Chairman Donald Manzullo (R - IL), and Congressman Jose Serrano (D - N.Y.), Ranking Democrat on the Appropriations CJS subcommittee successfully passed the bipartisan amendment Wednesday to restore funding for the SBA's 7(a) program.

A failure to adopt this amendment would have resulted in increased fees for both small businesses and lenders. Congresswoman Velázquez and her colleagues passed the amendment to provide funding at last year's level of $79 million, which will allow the program to achieve record loan volumes of $14 billion in the upcoming year. The 7(a) program is the country's largest source of long-term small business lending for both the private and public sector, providing 30 percent of this nation's long term loans - and for every 60 cents, the 7(a) program provides over $100 in loans. The amendment passed with overwhelming support, including that of 87 Republicans.

However the Bush administration continues to oppose funding for the 7(a) program. "The administration may not like the fact that a bipartisan group of Members disagrees with the President's vision for the 7(a) program, but Congress has made its intent clear that these funds be used for the sole purpose of making 7(a) loans," Congresswoman Velázquez said. "At this point, they should stop looking for excuses and join our effort in working to improve access to capital for our nation's small businesses, so that they can create the jobs we so desperately need."

The administration's most recent attempt to withhold funding for lending programs is to claim they are unable to use funds from the business loans program account for the 7(a) program. Congresswoman Velázquez calls this a "lame excuse." Placing funds in the business loan expense account became necessary when Republicans not only zeroed out the loan program account, but eliminated it completely. In addition, Congressman Frank Wolf, Chairman of the CJS Appropriations subcommittee, who was responsible for shepherding the bill through Congress, also used the same exact procedure to restore funds for SBA's Microloan program.

"It is unbelievable to me that the Bush administration would tell small businesses that the 7(a) program will function better without any federal funding - that would be like living in a fantasy world," Congresswoman Velázquez said. "This money goes to making critical loans that enable our nation's 23 million small businesses to grow, expand and create jobs. This was a huge victory for small businesses, and we will continue to fight to ensure that this vital sector has access to capital."

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