By HECTOR V. BARRETO
In the last two weeks I’ve had the privilege of speaking before both the House and Senate Small Business Committees about SBA’s proposed FY 2006 budget. Believe it or not, I like budget season. I like it because it’s an opportunity to show that the resources available to us to help small businesses are increasing despite tightening budgets. We’re getting more efficient, more effective and more innovative—just like a small business.
I know that in Washington, D.C., it’s difficult to imagine strongly supporting a program without continually increasing its budget, but SBA has proven that it can be done. Since I became Administrator in 2001, the agency has operated under tighter budgets, yet each year SBA’s programs have reached more and more American entrepreneurs. We’re doing more for American small businesses with less taxpayer money. Here are some examples:
Through early February, our flagship 7(a) loan program, which is used mainly for business operations, approved 28 percent more loans than in the same period in 2004. Even better, we are now operating this program on a zero-subsidy rate, ensuring long-term stability of the program without requiring a taxpayer subsidy. Last year the SBA backed a record number of loans to women, minorities and veterans. This year, we project another record for the program with up to $16 billion in loan guarantees available to small businesses at no cost to the American public.
In Wisconsin, the SBA has approved 28 percent more 7(a) loans through early February than in the same period a year ago.
Loans under our 504 program, used mainly for the purchase of real estate and capital equipment, are up 16 percent in FY05 over the same period in FY04. Loans to African Americans and women under 7(a) and 504 are up 57 percent and 51 percent respectively. Loans to Hispanics are up 16 percent and to Asian-Americans, loans are up 20 percent. We estimate that in the first three months of the current fiscal year, SBA programs facilitated the creation or retention of 168,000 jobs.
The numbers continue to astound some. But they shouldn’t. Recognizing that small businesses are critical to growing our economy and creating new jobs, President Bush’s agenda creates an environment for small businesses to flourish. His agenda combines not only government actions and programs, but the effective implementation of tax and regulatory policies.
Let’s take tax reform. In 2004, 25 million small-business owners received tax relief totaling about $75 billion dollars, an average of $3,000 each. The President reduced marginal income rates across the board, benefiting more than 90 percent of small businesses that pay taxes at the individual income tax rates. He raised the amount that small businesses can expense for new capital investments from $25,000 to $100,000, reducing their cost of purchasing new equipment and other investments. And the President has made tax relief permanence a top priority to help small businesses and their employees keep more of what they earn.
To reduce the cost of doing business in America, the President is working to ensure that small business owners and workers have access to high-quality health care and are protected from frivolous lawsuits. Just last Friday, the President signed legislation curbing abusive class-action lawsuits. On the regulatory front, actions taken by the President’s administration have saved American small businesses more than $30 billion since 2001 by reducing the complex maze of federal regulation and paperwork.
On the international scene, the President has expanded opportunities across the globe for American small businesses by completing free-trade agreements with 11 countries. Here at home, the Bush Administration is working to ensure that small businesses can compete fairly for their share of federal government dollars. And they’ve been successful. In FY 2003, small businesses received $65.5 billion of prime federal contract dollars, exceeding the 23 percent governmentwide goal. Earlier this month small businesses received more great news when the Administration announced an additional $15 billion in government contracting opportunities for small business.
Small businesses are vital to American prosperity and, thankfully, they are flourishing. In part it’s because the President has taken steps to reduce taxes, encourage investment, remove obstacles to growth and provide opportunity. And in part because American entrepreneurs are innovative, resilient, tenacious and determined to achieve the American dream.
–Hector V. Barreto was a small business owner and is now the 21st Administrator of the Small Business Administration.
