Good morning. I thank you all for being here this morning to discuss reauthorization of the SBA's loan programs. These small business loans – microloans, 7(a) loans, and 504 loans -- make a big difference in our economy. Last year alone, they helped more than 110,000 businesses and created or retained several hundred thousand jobs. With these results, we need to do all we can to leverage these programs.

I understand that members, or Congress and the Administration, will have differences, but some of the disagreements we are having don't make sense. For example, it is very frustrating that the Administration is opposed to funding microloans and assistance to small enterprises in this country, at less than $30 million a year for three programs, but was willing to provide more than $200 million for micro-credit internationally in 2005, to spend about $56 million for micro-credit programs in Iraq in 2006, and to request about $160 million for micro-credit programs in 2007 as part of the supplemental funding for the war in Iraq.

At the same time our government was killing micro-credit programs at home because they are deemed "too expensive," the Nobel Peace prize was awarded to the pioneer of micro-credit, Muhammad Yunus, for combating global poverty, starting in Bangladesh, one of the poorest countries in the world. For comparatively modest amounts, we could help people in our country too, particularly those on the fringes – helping them to earn a living, put themselves through college, or start to build wealth through asset accumulation. We've got a divide in this country, and we need to address some of the economic and social injustices, and we can do it by supporting entrepreneurship. Microloans are one way, and the SBA, which serves as a gap lender, is one place to do it. If microlending were very profitable, banks would be doing it. Our Committee is largely unified in preserving the SBA's microloan programs, and I hope the participants today will succeed in convincing those who have doubts why we should reauthorize and fund the SBA's microloan programs.

Also critical in the spectrum of small business financing are the 7(a) and 504 loan programs. They provide 40 percent of this country's long-term capital to small businesses. Because of these programs, small business owners are able to spread out their payments and reduce monthly costs, helping them to have a better shot at succeeding. We need to make sure these programs are reaching those who need financing, but, for some reason, can't get affordable credit through the private sector. A place for improvement in these programs is lending to minorities, and another place is lending in rural areas. Loans to these markets – such as African Americans and women -- have been proportionately stagnant or modest since 2001, as the programs have grown in size. We continue to hear concerns that the 7(a) lending is largely consolidated into about ten lenders and that we need to make sure smaller community banks participate, particularly those in needy rural areas. We've tried to address this in our bill, and I am counting on you to give us feedback.

Let me put this roundtable in context. Last year the Committee held reauthorization hearings in April on the SBA's credit programs. Many of you or your organizations testified, or submitted testimony, and helped us build a record on the very provisions that are in the small business lending reauthorization bill Senator Snowe and I introduced yesterday, S. 1256. And most of those provisions look familiar because they were part of the comprehensive reauthorization bill that the Committee adopted last summer.

Today's roundtable discussion is meant to complement not only last year's reauthorization hearing but also the hearing we had earlier this year on the SBA's FY2008 budget.

The budget generated lots of policy discussions regarding the SBA's micro-credit programs. Of particular concern were the Administration's proposals to make the SBA microloan program self-financing and to eliminatethe microloan technical assistance grants and PRIME, the Program for Investment in Microenterprise. Overwhelmingly, the members of this Committee voiced opposition to those proposals - bipartisan opposition. The hearing also touched upon lender oversight and the need to lower fees on small business loans for borrowers and lenders.

I can tell you right now that fees are too high. I can't go to a small business meeting in Massachusetts without businesses or lenders telling me that. The bill we introduced yesterday includes language to reduce loan fees on borrowers and lenders. A narrower version of this provision passed with the Administration's cooperation in 2004 when it succeeded in taking the 7(a) Loan program to zero subsidy. It was part of the 60 pages inserted into the omnibus in the dead of the night that cut out all but one Democratic provision from what had been a bi-partisan reauthorization bill. However, while very well-intentioned, what's in law doesn't work, and if it did work, it would only reduce fees on borrowers, if there were appropriations provided or excess fees charged. This language fixes it, and we think it does it in a way that would still address the lending industry's concerns that any funding scenario provide sufficient program levels and stability to the program, thereby avoiding shut-downs of the 7(a) loan program or mandating restrictions on loan size or types of loans.

I know the Administration is opposed to providing any appropriations for this program, and I am told it is a priority for them to kill any efforts to move us in that direction. However, during the budget hearing, the Administrator committed to working with us on legislation, not to repeat past games of false negotiating and rolling holds. If the Administration does not like the fee language in our bill, I encourage them to start talking to the Committee. While our bill was only introduced yesterday, there has been plenty of time to review it because it is the same language our Committee adopted last summer and similar to what the Senate passed as part of an appropriations bill in 2006. Further, OMB has been wrong on calculating the subsidy rate for the 7(a) Loan program for 13 out of the last 15 years, and the Administration does not have a strong case for obstructing a fix and continuing to over-charge the small business community.

On a personal note, I want to welcome Joan Wasser Gish of Newton, Mass., formerly of my staff and now a small business owner herself, and welcome Chris Sikes of the Western Massachusetts Enterprise Fund. Aside from Chris's critical work on micro-credit in Western Massachusetts, creating jobs and economic opportunities where we need them, he worked with Joan on an advisory committee regarding child care and small business, which is how they identified need for SBA's 504 loans to help address the need for quality, affordable child care. It is an important workforce issue that affects small businesses whose employees need safe, affordable care for their children. It is a legitimate use of 504 loans, loans intended to spur local economic development, and I am very proud to have Joan and Chris here today to explain why the Committee and the Senate, and the full Congress, should once again pass this legislation and give this pilot a chance.

Most of us go back a long way. Even with our differences, we should be able to have a constructive exchange today. Roundtables make that possible in a way that hearings don't, and it is to Senator Snowe's credit that our Committee has used this format in the past as part of the reauthorization process.

My schedule doesn't allow me to stay for the entire roundtable, so I will turn this over to Kevin Wheeler of my staff and Jackie Ferko (Fur-co) of Senator Snowe's staff. If other Committee members are able to make it, they will take over the reins. And if staffs of members have questions or comments, they should let Kevin or Jackie know. If you would like to submit additional materials or comments for the record, please do so by close of business Monday. We will have an official transcript of this proceeding so all your remarks today are on the record – a record that I hope will make the case for marking up our small business lending reauthorization bill on May 16th and for passing out it of Committee and through the full Senate.

Again, thanks for coming today.