When President Bush addresses Congress for his State of the Union tomorrow night, he will try to make the case that his Administration’s policies help small businesses. But Bush’s rhetoric doesn’t match reality. Instead of promoting small business interests, President Bush has used his power to advance big business special interests over small business growth. From federal contracting opportunities to tax cuts for the wealthy that drive up our federal deficit, this Administration has abandoned small business entrepreneurs and workers. Following is a statement from Senator John Kerry, Ranking Democrat on the Senate Committee on Small Business and Entrepreneurship, and an outline of the true Bush record:



"For America’s small businesses, the Bush Administration remains a wolf in sheep’s clothing," said Kerry. "No matter how many scripted taxpayer-funded political events they stage, the Administration can’t hide from the fact that President Bush is slashing resources for small businesses. Since taking office, the President has slashed the Small Business Administration’s budget 50 percent, raised fees on small business loans, abandoned small businesses walloped by Katrina, and chosen tax policies that leave behind the majority of small businesses. It’s long overdue for this Administration to start investing in America’s small business owners, the entrepreneurs who actually create jobs here at home and make our communities good places to live and work."

Bush Tax Plan Favors Big Business Over Small Business
• President Bush claims that making the 2001 and 2003 tax cuts permanent will greatly benefit small businesses.
• In reality, 99 percent of households with small-business income do not benefit from a reduction in the top income rate and the repeal of the estate tax.
• The small number who do benefit from a cut in the top tax income rate are wealthy, with an average income of $1.5 million. The Treasury definition of small business income includes the fees that CEOs are paid for sitting on corporate boards, as well as passive investors. This definition includes income well beyond income earned from your typical small business. In fact, under the expansive definition of “small business,” President Bush and Vice President Cheney would both be considered “small-business owners.”
• Most households with small-business income do not have high income. Only 8 percent of small-business households make more than $200,000, yet this group would receive 51 percent of the benefits of the tax cuts going to people with small-business income. By comparison, the 62 percent of households with small-business income and a total income below $75,000 get only 16 percent of the tax cuts.
• The majority of small-business owners are actually worse off with the tax cuts. Because the tax cuts have not been paid for, small business owners will eventually either pay for the tax cuts through benefit reductions or tax increases, losing more than they gain from the initial tax cut. (Urban Institute-Brookings Institution Tax Policy Center)
• The tax cuts of the last few years have not greatly helped small businesses. Small businesses have always been the greatest source of job creation, having generated 60 to 80 percent of net new jobs annually over the last decade. Yet, instead of flourishing, our small businesses are struggling. Job growth lags well behind the average pace of job growth during economic recoveries since World War II. For the last quarter of 2005, GDP only grew by 1.1 percent.



No Expanded Health Care Coverage for Small Businesses
• Since 2000, the Bush Administration has been long on rhetoric on how to address the problem of access to health care for small businesses. Yet during this Administration’s tenure, it has done nothing to expand access to health care, nothing to reduce skyrocketing health care costs, and has continued to recycle the same unacceptable proposals that threaten to undermine the quality of health care for all.
• Instead of lowering health care costs and expanding coverage for small businesses, costs have risen and coverage has declined during the Bush presidency.
• Because of sky rocketing health care costs, the percentage of small businesses (3-199 employees) offering health benefits has decreased from 68 percent in 2000 to 59 percent in 2005.
• Since President Bush has been in office, some small employers have seen health care premiums rise by as much as 70 percent annually.
• Among the 45 million uninsured individuals in the United States, approximately 60 percent (27 million) come from small businesses. (Kaiser Family Foundation, Employer Health Benefits 2005 Summary of Findings)



Abandoning the Small Business Administration and Small Business Owners
• President Bush has slashed the Small Business Administration budget by 50 percent since he took office, the most of any government agency. Last year in his Inaugural address, President Bush said, “We will widen the ownership of…businesses.” Yet, just two weeks later he submitted a budget cutting small business resources another 20 percent.
• Growth opportunities for veteran- and women-owned small businesses are being held up by red tape. In fact, a five-year delay in finalizing the implementing regulations for a contracting program has cost firms $6-8 billion in lost federal contract dollars annually.
• President Bush has sought to limit access to capital for small business owners by proposing to cut or eliminate microloans and counseling to micro-entrepreneurs (disproportionately hurting women and minorities), and by increasing the cost of borrowing for small businesses across the nation by cutting funding for the 7(a) Loan Guarantee Program (SBA’s largest loan program).
• In his 2005 and 2006 Budget requests, the President proposed to eliminate all funding for the Advanced Technology Program (ATP). ATP assistance encourages high-risk research and supports small businesses that rely on Federal support to conduct such research.
• Over the past 5 years, this nation has lost over 3 million manufacturing jobs, but the Bush Administration has proposed deeps cuts to the Manufacturing Extension Partnership (MEP), a program aimed to help small manufacturers compete.
• Last year, the SBA helped some 111,000 small businessesget loans and venture capital, pumping more than $23 billion into our local economies. That capital led to the creation and retention of an estimated 700,000 jobs in this country. The SBA and its partners also provided management counseling last year to 1.2 million individuals so they could start a business, keep their doors open, or expand. Yet the President keeps pushing to cut these programs critical to small business success.



Republican Culture of Corruption Fails Small Businesses
• Five months after Hurricane Katrina devastated the Gulf Coast, small businesses are still waiting for the SBA to process their loan applications. As of January 30, only 24 percent of small business loans have been approved, and of those, only 25 percent have been dispersed. Of the $62 billion President Bush requested for hurricane relief, not one dime has been provided for immediate relief for small businesses and instead the Administration chose to throw more money at the failing disaster loan program.
• A 2005 SBA report indicates that “the SBA awarded four of the six high dollar procurements…to large companies.” Forty-four large corporations received over $2 billion in contracts that the Administration mistakenly counted as small business contracts.
• Large businesses continue to take advantage of loopholes and poor oversight to receive contract dollars intended for small firms. Despite reports of big business abuses of the federal small business procurement system, the Bush Administration has offered no effective response to rectify the situation.
• While former Director of the Office of Federal Procurement Policy (OFPP) in the White House, David Safavian, is under indictment for his ties to corrupt lobbyist Jack Abramoff, there continues to be a lack of leadership at every level of the Federal procurement process.
• The Government Accountability Office (GAO) continues to report on the inaccurate and untimely data being reported by the Administration on Federal contracting, yet President Bush has offered no solutions to address this concern, making it increasingly difficult to monitor the awarding of Federal contracts to small businesses.