Small Business Jobs and Credit Act of 2010

Date: June 16, 2010
Location: Washington, DC


Mr. GRAVES of Missouri. Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, today, I rise in opposition to H.R. 5297, the Small Business Lending Fund Act. Although my colleagues on the other side of the aisle claim that this bill would improve small business access to much-needed capital, I am not convinced. In fact, there is virtually no guarantee that small businesses will benefit whatsoever from the funding in this bill.

Nothing in Title 1 of the bill assures that banks will lend the capital, much less to small businesses. Title 2 authorizes lending by State programs to businesses that the Small Business Administration would consider large. And only Title 3 of this bill is targeted to assist small businesses. Nevertheless, the overall bill is badly flawed, and I can't support it, nor can I support the excessive small business assistance spending in Title 3.

Now more than ever, our Nation is relying on small businesses to create jobs and to lead us in our economic recovery. But without sufficient access to credit or capital, small businesses can't expand operations or hire new employees. There's little doubt that efforts to bail out banks and other major financial institutions has not led to improved access to capital by small businesses.

Last session, I strongly supported H.R. 3854. It was a comprehensive, bipartisan revision to the capital access programs overseen by the Small Business Administration. That bill, unlike the one before us today, would have improved access to needed capital by small businesses.

Incorporated into that bill was H.R. 3738, which provided a streamlined process to enable qualified venture capitalists to bootstrap their investment with additional Federal moneys to provide needed early-stage equity capital to small businesses. Successful operators would pay back the Federal Government before they took their own profits. Although the legislation came with a relatively modest price tag of $200 million, its benefits were sure to far outweigh the cost. Moreover, if the program did not succeed, the cost of failure was going to be very modest.

That certainly isn't the case today with the bill we have before us. The cost has increased by 500 percent without any previous testing of its potential to succeed. This will pile unnecessary risk or costs onto taxpayers at a time when we're dealing with record debt and unsustainable deficit spending. Even if Title 3 of this bill--the small business portion--even if Title 3 stood alone, given the dramatic increase in costs, I couldn't support it. But yet here it is. It remains attached to a bill that has even greater costs--and costs that are fully not paid for in the short term.

So let's lay this out. We still do not have a budget for fiscal year 2011. Our national debt has reached a new record high of $13 trillion. And the administration and the majority in the House continue to rely on unsustainable borrowing and spending to keep things running. When you consider the complete chaos our fiscal house is in, the idea of more spending seems foolish. Completely foolish. But that's what's being proposed by this legislation today, and I refuse to support it.

If my colleagues want to get serious about supporting small businesses and encouraging their growth, there are lots of ways to do so, and I'm very happy to help. But H.R. 5297 is yet another ill-conceived effort that, at the end of the day, will only further punish American entrepreneurs.

With that, Mr. Chairman, I reserve the balance of my time.


Mr. GRAVES of Missouri. Mr. Chairman, I don't have any other speakers on this.

I just might comment on this bill. One of the frustrating things about our economic recovery right now, and we continue to hear over and over and over again, that small businesses are uncertain about what the future is. They don't know what's going to happen with cap-and-trade and what's going to happen with the energy tax, particularly those businesses that are using a lot of energy to produce whatever it is. They're uncertain about what's going to happen with this health care bill and all the mandates that are coming out. They're uncertain about what's going to happen with their taxes. They're uncertain about what's going to happen with the amassing debt that's taking place, because somebody is going to have to pay for it. And this administration continues to look at small businesses to be able to provide that.

So here we come along with a bill that supposedly is supposed to help small businesses, which the way it is right now, there's no guarantee whatsoever that that money is going to be loaned to small businesses. As the bill stands right now, a commercial loan could qualify, any commercial loan could qualify if it's a loan less than a million dollars.

The fact of the matter is, Mr. Chairman, there's no guarantee. There's no guarantee.

Small businesses are the ones that need help. And the fact of the matter is, too, that if the government would just get out of the way, then small businesses would lead us back into this economic recovery. They provide 7 out of every 10 jobs in this country, and they are the ones that are going to lead us. But nobody is going to expand and nobody is going to add any new productivity, any new hires, until they know what's going to go on and what's going to be around the corner. With this administration, they don't know what's going to happen to them.

I reserve the balance of my time.


Mr. GRAVES of Missouri. Mr. Chairman, I rise in support of the amendment offered by the gentleman from Virginia.

Under the program, the way it was reported out of the Financial Services Committee, the bill bases its lending on the size of loans, and assumes that loans of under $250,000 and $1 million will be made to small businesses. However, there is no such assurance in the bill, and loans of those sizes could be made to large businesses, but count as small business lending. If this is a small business lending program, then it should use the definition of small business used throughout the government, and that is the one in the Small Business Act. The approach offered by the gentleman from Virginia (Mr. Nye) does just that. It makes that sensible change.

The other change that the gentleman's amendment does is to include small business lending companies. These institutions are not overseen by the Federal financial regulators, but are authorized by the Small Business Administration to make guaranteed loans. If the idea of the program is to increase lending to small businesses, small business lending companies should not be excluded from this program.

For these reasons, I definitely support the gentleman's amendment, and I appreciate his offering it.


Mr. GRAVES of Missouri. Thank you, Madam Chair.

Madam Chair, I rise in support of the amendment from the gentlewoman from California. If we're going to enact a program that's designed to target investment in certain industries, then selection of the applicants should be based on the likelihood that a venture capital company will make those amendments. As a result, I believe it provides a very important technical clarification to the bill, and I support it.