Small Business Committee Democratic Site

STATEMENT
of the
Honorable Nydia M. Velázquez, Ranking Democratic Member
House Committee on Small Business
Budget Analysis Press Conference
March 2, 2006

Next week the Budget Committee will be meeting to consider the President's Fiscal Year 2007 budget proposal. During this debate you will hear talk of Medicare Cuts, Transportation, Education and Homeland Security. But unfortunately, what will be lost in this discussion is the impact this proposal will have on this nation's 23 million small business owners.

We have heard time and time again how small businesses are the drivers of the economy, create the majority of jobs, and dominate areas like exports and technology development. Given these realities, it is very surprising how harmful the administration's FY2007 budget is for small business.

One area that has been well documented is the fact that the Small Business Administration has been cut by nearly 50 percent since President Bush took office. However, what continues to be overlooked is the effect these proposed cuts will have for the roughly 100 programs government-wide that help this nation's entrepreneurs.

This is why my Democratic colleagues and I initiated this report 3 years ago - to educate Congress and the administration on what our federal budget choices are doing to our country's small businesses.

Unfortunately, as you can see from the chart the number of programs being slashed only continues to climb further each year. This year, 75 out of 100 government programs have been cut or eliminated.

These programs cover nearly every agency - and affect all portions of the small business community. The cuts impact initiatives from access to capital, technology development, to entrepreneurial assistance, and disaster relief.

What concerns me most is how the budget seems to create a disconnect between stated national policy - such as innovation, energy efficiency and hurricane relief - and the funding requests for the very programs aimed at accomplishing them.

Clearly this budget fails to fund the right priorities. This past January the President talked about his plans for the economy saying, "with the centerpiece of our economic policy being the small business in America" - yet, the FY 2007 request clearly shows that our nation's entrepreneurs are not at the center of anything besides massive budget cuts.

Given recent history, if the Republicans on the Budget Committee put their usual rubber stamp on the President's proposal, it will doom many of the initiatives before the year even gets started. It is my hope that Chairman Nussle and the Members of the Budget Committee will take note of this report, and the negative impact of the administration's budget on small business.

As Congress gets ready to move forward on the budget next week, I want to leave you with two numbers - over 60 percent and 1.5 percent. Over 60 percent is the average overall cut that small business programs in this budget will receive. 1.5 percent is the amount of deficit savings from the small business spending cuts.

In the end when you look at those two numbers, it is my hope that you will understand what this all means for the nation's economic engines and how it will affect our goals of innovation, energy efficiency and hurricane relief - all for such miniscule savings. I am sure you will agree that for small businesses, this budget simply represents the wrong priorities.