WASHINGTON – United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, D-La., today held a hearing to evaluate if small businesses were getting greater access to capital and contracts because of the small business provisions within the Recovery Act.
“In the past year we have seen the worst economic conditions since the great depression, making it more critical than ever for small business owners to have greater access to capital and federal contracts to help small firms increase sales and keep Americans employed,” Sen. Landrieu said. “While it is clear that most of the small business provisions within the Recovery Act are working, we certainly still have our work cut out for us. With small businesses making up the largest source of employment in this country and the national unemployment rate now almost 10 percent, we need to figure out what else we can do to build on and maximize the provisions in place.”
The Senator heard testimony from various witnesses from the Departments of Defense and Energy, as well as the Small Business Administration (SBA). She learned that the provisions enacted since Congress passed and the President signed the Recovery Act have helped boost small business lending, with weekly loan volume increasing by more than 60 percent nationwide. Small businesses have created or retained about 325,000 jobs with the help of Recovery Act provisions.
While significant progress has been made, there is still more work to do to ensure small businesses have the tools they need to continue to dig the economy out of this recession. For example, the highest-spending agency – the Department of Defense – has awarded 58 percent of its Recovery Act dollars to small businesses, but the federal government overall has spent just over a quarter of Recovery Act funds on small businesses and the Department of Energy (DOE) has spent less than 7 percent of its Recovery Act dollars on small businesses. The Senator vowed to continue to press DOE and any agency that doesn’t give small businesses greater access to these Recovery Act contracts.
“We cannot wait until the money is spent to start evaluating whether small businesses are being included,” Sen. Landrieu said. “That is why we started oversight in May and why it must be continuous.”
In addition to examining the finance and contracting changes within the Recovery Act, Senator Landrieu also heard testimony from the National Institutes of Health (NIH) regarding an exemption, included in the Act, from the largest federal small business program. The controversial provision exempted NIH from participating in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Senators Landrieu and her Ranking Member on the Committee, Senator Olympia Snow, R-Maine, sent a joint letter in March asking NIH to allocate the funds despite the exemption. Senators Cardin and Feingold also sent a letter and Senator Cardin held a hearing on the issue in June.
“This provision cheated small businesses out of as much as $230 million in work, and it directly counters the goals of the Recovery Act to create high-paying jobs, spur innovation and boost America’s competitiveness,” Sen. Landrieu said. “The SBIR and STTR programs have a proven track record in these areas.”
To watch the hearing in full or read Senator Landrieu’s opening statement, as well as witness testimony, please click here.