Today the Committee on Small Business and Entrepreneurship held a confirmation hearing on President Bush’s nominee to head the Small Business Administration, Steven C. Preston. Following are the opening remarks of Sen. John Kerry (D-Mass.), top Democrat on the Committee, as prepared for delivery. A vote on the nominee has not yet been scheduled.







Thank you, Chair Snowe. I want to thank you and your staff for working with us on this nomination, and I hope we can continue working in a bipartisan way as we move forward on reauthorization. I want to welcome nominee Steve Preston to our Committee and extend a welcome to his family members who are here with us today. Mr. Preston, I am glad we had the chance to meet yesterday and go over some issues, and I look forward to hearing more about how you plan to manage the Small Business Administration and address the needs of small businesses across the nation, should you be confirmed.



Mr. Preston is a serious nominee who brings business acumen and a wealth of management experience to an agency woefully in need of better management. From the disaster loan program to oversight of federal contracting, we have seen the SBA falter. Here we are 10 months since Hurricane Katrina, and the delays in getting loan money into the hands of Gulf Coast victims still remain. Deep budget cuts – 37 percent, the deepest experienced by any federal agency during this Administration -- have left key programs understaffed, and efforts to eliminate key programs like the Microloan program and PRIME and New Markets Venture Capital have undermined access to capital and business counseling for small businesses, especially the smallest of firms. Morale at the SBA is at an all time low and capable employees have already moved on. There is much to be done to reinvigorate this agency which has been left to wither on the vine.



Mr. Preston, I urge you to be an aggressive advocate for small business – something this Administration has been missing. I urge you to seek out the best people in the agency and ignore those who would steer you on a political path. You are not a political person and I urge you to trust your instincts to do the right thing, not the political thing. This is not the time for politics – it’s time to help this agency live up to its full potential. With investment and commitment, this could be an agency that makes a real difference in people’s lives. And that means fighting for realistic budgets, too.



I am tired of seeing budgets that have no basis in reality but are driven by green eye-shades over at the OMB. I am tired of the SBA Administrator traveling around the country advocating the Administration’s proposals that often do not realistically reflect the needs of small businesses while the SBA budget is being slashed. We need someone who will consider the impact on small businesses and disaster victims and who will not only oppose, but vigorously fight the budget like the one sent up this year which proposes to assess unprecedented administrative fees on small business loans – on top of the high fees that are already passed on to small businesses in this zero subsidy environment – and which tries to balance the federal budget on the backs of disaster victims by raising interest rates on disaster loans.



We need someone who will be a vigilant watchdog when it comes to small business contracting. The record of the last few years is appalling –overstating federal small business contracting numbers, closing SBA’s office dedicated to veterans contracting, delaying the women’s contracting program for six years, which still hasn’t been implemented. The SBA IG reports and GAO reports reveal a pernicious pattern of neglect when it comes to SBA’s oversight of federal contracting to ensure fair access for small firms. Frankly, I think there has been an abrogation of duty here. When you have report after report indicating that there needs to be more staff to oversee federal contracting, and when the agency rebuffs our efforts to get more accurate small business contracting numbers, you have a serious problem. I want a commitment from you, Mr. Preston, to press for better data and be willing to admit that more work needs to be done.



Above all, please do not come back and tell us that it is possible “to do more with less.” At some point – and we have reached that point – it is not possible. Small Business Development Centers have had to reduce services and many have waiting lists for small businesses to meet with a counselor; some of our Women’s Business Centers are on the verge of shutting down, and lending to minorities has been generally flat or has gone down, particularly dollars loaned to African Americans and women. This agency has a unique role to play in fostering entrepreneurship in underserved communities. I hope, should you be confirmed, that you will lead in this area as I know you have spent time volunteering in underserved communities.



Mr. Preston, I have served on this Committee for 21 years, as Ranking Member or Chair since 1997, and I have worked with a number of SBA Administrators -- although I can’t say I really worked with the last one -- and I have seen nominees come before us and say all the right things just to get confirmed. I urge you: Don’t just talk the talk, walk the walk. Live up to your promises -- and we promise to work with you to help small businesses across the Nation. There’s just a little over two years left in this Administration, but I believe that working together we can move a real small business agenda forward.