President Obama Says It's Time to Move Forward on Health Care Reform; Sebelius Warns That 'Doing Nothing' Poses Biggest Threat to Health Care Coverage

This morning, President Barack Obama [pictured above, during taping session] used his weekly address to call on Democratic and Republican leaders to attend next week’s health care meeting in good faith to find reforms that work for American individuals, families and small businesses.

With several health insurance companies recently announcing outrageously steep hikes in their rates -- from 10 to more than 30 percent -- it's clear that the status quo, while good for the insurance industry, is bad for the American people. After a year of exhaustive debate, he says it's time to move forward on reform.

Following, is the full text of President Obama's address:

"The other week, men and women across California opened up their mailboxes to find a letter from Anthem Blue Cross. The news inside was jaw-dropping. Anthem was alerting almost a million of its customers that it would be raising premiums by an average of 25 percent, with about a quarter of folks likely to see their rates go up by anywhere from 35 to 39 percent.

"Now, after their announcement stirred public outcry, Anthem agreed to delay their rate hike until May 1st, while the situation is reviewed by the state of California. But it’s not just Californians who are being hit by rate hikes. In Kansas, one insurance company raised premiums by 10 to 20 percent only after asking to raise them by 20 to 30 percent. Last year, Michigan Blue Cross Blue Shield raised rates by 22 percent after asking to raise them by up to 56 percent. And in Maine, Anthem is asking to raise rates for some folks by about 23 percent.

"The bottom line is that the status quo is good for the insurance industry and bad for America. Over the past year, as families and small-business owners have struggled to pay soaring health care costs, and as millions of Americans lost their coverage, the five largest insurers made record profits of over $12 billion.

"And, as bad as things are today, they’ll only get worse if we fail to act. We’ll see more and more Americans go without the coverage they need. We’ll see exploding premiums and out-of-pocket costs burn through more and more family budgets. We’ll see more and more small businesses scale back benefits, drop coverage, or close down because they can’t keep up with rising rates. And, in time, we’ll see these skyrocketing health care costs become the single largest driver of our federal deficits.

"That’s what the future is on track to look like. But it’s not what the future has to look like. The question, then, is whether we will do what it takes, all of us -- Democrats and Republicans -- to build a better future for ourselves, our children, and our country.

"That’s why, next week, I am inviting members of both parties to take part in a bipartisan health care meeting, and I hope they come in a spirit of good faith. I don’t want to see this meeting turn into political theater, with each side simply reciting talking points and trying to score political points. Instead, I ask members of both parties to seek common ground in an effort to solve a problem that’s been with us for generations.

"It’s in that spirit that I have sought out, and supported, Republican ideas on reform from the very beginning. Some Republicans want to allow Americans to purchase insurance from a company in another state to give people more choices and bring down costs. Some Republicans have also suggested giving small businesses the power to pool together and offer health care at lower prices, just as big companies and labor unions do. I think both of these are good ideas -- so long as we pursue them in a way that protects benefits, protects patients, and protects the American people. I hope Democrats and Republicans can come together next week around these and other ideas.

"To members of Congress, I would simply say this: We know the American people want us to reform our health insurance system. We know where the broad areas of agreement are. And we know where the sources of disagreement lie. After debating this issue exhaustively for a year, let’s move forward together. Next week is our chance to finally reform our health insurance system, so it works for families and small businesses. It’s our chance to finally give Americans the peace of mind of knowing that they’ll be able to have affordable coverage when they need it most.

"What’s being tested here is not just our ability to solve this one problem, but our ability to solve any problem. Right now, Americans are understandably despairing about whether partisanship and the undue influence of special interests in Washington will make it impossible for us to deal with the big challenges that face our country. They want to see us focus -- not on scoring points, but on solving problems; not on the next election, but on the next generation. That is what we can do, and that is what we must do when we come together for this bipartisan health care meeting next week. Thank you, and have a great weekend."

You can view the video of President Obama's weekly address here: http://bit.ly/PremiumsProfitsReform.

Sebelius Issues Dire Status-Quo Prognosis
Shortly after the address, U.S. Department of Health and Human Services Secretary Kathleen Sebelius -- a former Kansas governor and, before that, the state's insurance commissioner -- punctuated President Obama's remarks with a resonant warning for all Americans.

"A lot of people think that health insurance reform doesn't matter to them because they already have coverage," Sebelius wrote in a statement. "And it's easy to understand why some Americans might resist changing the insurance system for fear that significant reform would threaten what they have now.

"There is a threat to health care coverage in the country, but it isn't reform; it's doing nothing. Rising costs of insurance premiums are pushing more and more people into the ranks of the uninsured.

"At a time when health insurance companies are fighting as hard as ever to stop health reform, their actions couldn't show more clearly why we need it... If we don't pass reform, premiums will continue to rise, and Americans will continue to be at the mercy of the worst insurance company practices and abuses."

To stay atop the latest developments regarding health insurance reform, go to: http://www.healthreform.gov/.

To learn about the far-reaching economic effects of health care reform on small businesses and their employees, visit: http://budurl.com/HealthReformSmallBiz.

For information about the myriad ways in which health insurance reform will actually reduce health care costs for small businesses, go to: http://bit.ly/LowPremiumsStrongBiz.

SOURCES: Council of Economic Advisers, HealthReform.gov, U.S. Department of Health and Human Services, The White House [photo by Samantha Appleton]
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Administrator Mills: SBA Re-Activating Recovery Loan Queue by Monday, Feb. 22

SBA issued the following statement today from Administrator Karen Mills [pictured] regarding efforts to ensure continued funding for two key provisions in the American Reinvestment and Recovery Act [ARRA] of 2009:

"SBA’s most popular ARRA provisions -- the increased guarantee and reduced fees in the two largest lending programs -- have helped engineer a significant turnaround in SBA lending. Continuing those ARRA provisions is SBA’s top priority.

"Through the original $375 million and the additional $125 million appropriations for these two provisions, SBA has supported more than $20 billion in lending to small businesses across the country and seen its average weekly loan volume increase by nearly 90 percent since February 2009.

"Through ARRA, we brought nearly 1,100 lending institutions back to the SBA’sprograms that had not made an SBA loan since at least 2007. All told, these steps have benefited tens of thousands of small businesses and supported hundreds of thousands of jobs during these tough economic times. However,we know there is still more work to be done. As the President has requested, we will continue to work with Congress to extend these programs through September 2010.

"The additional $125 million appropriation approved in December to extend SBA’s 7[a] loan guarantee to 90 percent, and reduce or eliminate borrower fees on both the 7[a] and 504 loans, will be used faster than expected.

"Loan volume has surged since earlier this week, when an Information Notice was released to lenders. SBA communicated with its lending partners today that it will re-activate the Recovery Loan Queue no later than Monday, Feb. 22. The Queue is an efficient and transparent process that will ensure that every remaining dollar possible is made available to help small businesses drive economic recovery across the country.

"The SBA advocates for small businesses across the federal government, and will continue its efforts to keep America’s small businesses on a path to recovery and long-term success. Small businesses are a central piece of President Obama’s Jobs Plan because they have been, and will continue to be, a key engine for job creation across the country.

"With that in mind, President Obama laid out an aggressive agenda for providing small businesses with the support they need to create jobs and drive economic recovery. That agenda includes proposals in three key areas: expanding access to capital; providing tax incentives to encourage job creation; and maximizing the potential of innovative, high-growth companies."

SBA’s ARRA Programs
SBA received $730 million in ARRA to support economic recovery programs for small businesses. Included in the appropriation was $375 million to support raising the government guarantee to 90 percent on SBA’s 7[a] loans, and reducing some lender and borrower fees on its 7[a] and 504 loans -- the agency’s two largest lending programs.

The funds for these popular provisions ran out in November 2009. SBA received an additional $125 million appropriation in December 2009, along with authority to continue both of the programs through February.

SBA’s 7[a] and 504 ARRA Transition Plan
SBA is in the process of finalizing the plan for transitioning its 7[a] and 504 programs back to their pre-ARRA terms and communicating those plans with its lending partners. This plan, when implemented, will include re-activating the Recovery Loan Queues no later than Monday, Feb. 22, 2010. The Queues will operate in the same manner as when originally implemented in November 2009.

Sometimes, previously approved loans are later cancelled or never disbursed for a variety of reasons. The Queues take this into account and, beginning on the transition date, will allow eligible small businesses -- in consultation with their lenders -- to choose to be placed in the Queue for possible approval of an ARRA loan if funding becomes available.

Small-business owners and lenders will have transparent access to the Queue via http://www.sba.gov/recoveryq/index.html, and will be able to remove themselves from the Queue at any time to be considered for a non-ARRA SBA loan with all applicable fees and, for 7[a] loans, standard guaranty levels.

Authorization for the 90 percent guarantee on 7[a] loans ends Feb. 28, 2010, though funds may be exhausted sooner. Furthermore, applications in the Queues after Feb. 28, 2010, will only be eligible for decreased or eliminated borrower fees when funds become available.

To learn more about SBA’s ARRA programs and other resources for small businesses, please visit http://www.sba.gov/.

SOURCES: Recovery.gov, U.S. Small Business Administration, The White House
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Landrieu Urges Applications for Broadband Internet Grants; Deadline to Apply for Grants Is March 15

United States Senate Committee on Small Business and Entrepreneurship Chair Mary L. Landrieu [D-La., pictured] today released two grant guides for small businesses interested in applying for the nearly $4 billion in American Recovery and Reinvestment Act [ARRA] grants to bring broadband Internet service to unserved, underserved and rural communities across the nation. Applications for this second round of Recovery Act funding for broadband infrastructure are being accepted through March 15, 2010.

"Louisiana businesses have received millions of dollars from the grant program to expand broadband Internet service," Sen. Landrieu said. "These funds are being put into the hands of businesses dedicated to expanding this advanced technology to some of the most rural parts of the country.

"Increasing access to broadband Internet service will help to bridge the technological divide between rural businesses and competing companies that have long benefitted from access to high-speed Internet service. I encourage small-business owners to apply for these competitive grants. This is an historic opportunity to both improve our communities and U.S. competitiveness."

In June of 2009, Sen. Landrieu sent a letter to Commerce Secretary Gary Locke, Department of Agriculture Secretary Tom Vilsack, and others supporting their efforts to expand access to broadband technology for the benefit of small businesses. In the same letter, Sen. Landrieu asked that priority be given to applications deploying broadband in unserved rural areas.

The senator has been a longtime advocate for the expansion of broadband technology, and co-sponsored the Broadband Data Improvement Act that became law in October 2008. The law encourages the deployment of high-speed Internet access to areas that need it most, and authorized the Small Business Administration’s Office of Advocacy to conduct a two-year report on broadband access and affordability for small businesses.

Sen. Landrieu's committee is monitoring the implementation of Recovery Act funding and the progress of the Advocacy report. In her June 2009 letter to Locke and Vilsack, Landrieu indicated that she plans to invite federal agencies before her committee to testify on the impact of Recovery Act broadband funds on small-business growth. To view a copy of that letter, go to: http://bit.ly/BroadbandLetter.

To view the guide for the U.S. Department of Commerce Broadband Technology Opportunity Program [BTOP], please go to: http://bit.ly/SenateSmallBizBTOP.

To view the guide for the U.S. Department of Agriculture’s Broadband Initiatives Program [BIP], visit: http://bit.ly/SenateSmallBizBIP.

SOURCES: GovTrack.us, Recovery.gov, U.S. Senate Committee on Small Business and Entrepreneurship
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Rodrigue Releases 'Ain't Dat Super' Silkscreen to Commemorate New Orleans Saints' First Super Bowl Win

On Feb. 7, 2010, New Orleans Saints quarterback Drew Brees led his team to a 31-17 win over the Indianapolis Colts in Super Bowl XLIV, marking the Saints' first-ever Super Bowl title. The underdog victory inspired GoodBiz113 profilee George Rodrigue ["Louisiana Artist Brings Post-Katrina [Blue Dog] Relief to New Orleans"] to add yet another masterpiece to his growing collection of "Blue Dog" works.

This morning, Rodrigue, an internationally renowned artist, author, social entrepreneur and philanthropist, released his original 5,000-print silkscreen -- aptly titled "Ain't Dat Super" -- that's available online and for a limited time. Each silkscreen print is signed and numbered, measures 35 x 28 inches [image size: 31 x 24], and is priced at $500 unframed.

To order your very own commemorative "Ain't Dat Super" silkscreen, go to: http://bit.ly/AintDatSuper. Prints will be ready for shipment March 24.

A portion of the proceeds from sales of this print will benefit the George Rodrigue Foundation of the Arts [GRFA], a nonprofit organization that advocates the importance of the visual arts in childhood education. For information about the far-reaching GRFA, please visit: http://bit.ly/RodrigueFoundation.

SOURCE: Rodrigue Studio
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During Super Bowl XLIV, Miller High Life Goes Big for the 'Little Guys'

Miller High Life, the beer that surprised America last year with its one one-second ad, will once again call a time-out for common sense during tomorrow's Super Bowl -- this year, giving its air-time to four deserving small businesses from around the country.

The 30-second spot, filmed in an actual Miller High Life warehouse in Los Angeles, will feature the owners of Del’s Barber Shop in Escondido, Cal.; Tim's Baseball Card Shop in Chicago, Ill.; Loretta’s Authentic Pralines in New Orleans, La.; Bizarre Guitar & Drum in Phoenix, Ariz.; as well as Miller High Life’s very own no-nonsense deliveryman. It will air in major markets during the Big Game, when the New Orleans Saints and Indianapolis Colts kick off from Miami's Sun Life Stadium at 6:25 p.m. ET.

"Miller High Life is all about common sense, and nothing makes more sense than giving deserving small businesses the opportunity to be a part of the big game," said Miller High Life Brand Manager Joe Abegg. "These businesses live the High Life every day by retaining a steadfast commitment to service and authenticity. What better way to show our appreciation for hard-working Americans who share High Life’s values than by providing a primetime stage for a few to tell their story?"

Miller High Life scoured the country to identify potential businesses to be featured in the Big Game commercial. From the many qualified companies that stood out, the folks at Miller High Life had the difficult task of narrowing it down to a few small businesses from around the country.

"We had a lot of fun working with the owners of these companies, and we think they represent small businesses across the country very well," said Abegg. "We hope this experience has been as positive for them as it has for us, and that it only serves to help small businesses thrive."

To build excitement for the commercial, which will air across much of the country through buys with local market CBS affiliates plus owned-and-operated stations, a 30-second teaser ad began hitting the air last week. Additional content including outtakes from the Big Game commercial shoot and information on the four businesses featured in the ad, as well as others that are living the High Life. It's available online at http://littleguysbiggame.millerhighlife.com/.

Miller High Life, one of MillerCoors' 32 domestic beers, is known as the "champagne of beers" and dates to 1903. It is a classic American-style lager recognized for its consistently crisp, smooth taste and iconic clear-glass bottle. Miller High Life embraces its rich heritage and is known by its drinkers as an authentic, unpretentious beer, and encourages beer drinkers to "Take Back the High Life."

MillerCoors Committed to Supplier Diversity
MillerCoors is dedicated to working with suppliers who are as diverse as its consumers, and gives minority- and women-owned business enterprises [MWBEs] an opportunity to compete with other suppliers in the marketplace.

As a member of the National Minority Supplier Development Council [NMSDC] and the Women’s Business Enterprise National Council [WBENC], MillerCoors supports local, regional and national MWBE councils. The company is committed to supplier diversity and is focused on increasing both its participation and spend with MWBE suppliers.

For information about MillerCoors' Supplier Diversity Management System, go to: https://cvmas14.cvmsolutions.com/millercoors/.

SOURCES: MillerCoors, NFL
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President Obama Outlines Latest in Series of New Small-Business Proposals; Successful SBA Programs Expanded to Boost Working Capital

Today in Lanham, Md., President Barack Obama [pictured] proposed the expansion of two critical Small Business Administration [SBA] lending programs aimed at allowing small businesses to refinance, and increasing limits for working capital. These are both legislative proposals designed to help small businesses through what continues to be a difficult period in credit markets.

“The true engine of job creation will always be businesses,” President Obama declared. “What government can do is fuel that engine: by giving entrepreneurs and companies the support to open their doors, expand, and hire more workers. Today, we're taking another step towards assisting small-business owners get the capital they need to grow and hire.”

SBA Administrator Karen Mills was pleased with this latest development. “These proposals will provide us with two effective tools to help small businesses meet specific challenges brought on bythe recession,” she said. “First, in the tight credit market of the last two years, lines of credit have been cut for small firms. Raising the limit on SBA Express loans to $1 million will mean more small-business owners will have quicker access to this source of capital to help restock inventories and support larger revenue sales and, literally, take that next step to grow their business and create new jobs.

“Second, thousands of good, creditworthy businesses find themselves caught by declining real estate values as a result of this recession. With many of them now facing mortgages coming due in the next few years, the ability to refinance into SBA’s 504 loan will give them the chance to lock in long-term, stable financing, as well as protect jobs by protecting small businesses from foreclosure.”

Following, are details of the President’s new small-business initiatives:

Expand SBA’s Existing Program to Temporarily Support Refinancing for Owner-Occupied Commercial Real Estate Loans
The Administration is proposing legislation to temporarily allow for the refinancing of owner-occupied commercial real estate [CRE] loans under the SBA’s 504 program, which provides guarantees on loans for the development of real estate and other fixed assets. Currently, 504 loans cannot be used for the refinancing of maturing debt. This change would respond to the difficulties that many current, solvent borrowers face in refinancing existing commercial real estate loans.

Businesses with a loan maturing in the next year, who are current on all loan payments, will be eligible. Lenders that are refinancing mortgages for existing customers will make a loan for up to 70 percent of the current property value; and SBA will help finance the remaining 20 percent. For new lenders taking on a refinancing project, SBA will take on a greater share of financing, up to 40 percent. SBA’s proposal for a temporary, zero-subsidy CRE refinancing program would be funded through additional fees for refinancing projects, not through a Congressional appropriation. This proposal will help refinance up to $18.7 billion each year in commercial real estate that might otherwise be foreclosed and liquidated.

Temporarily Increase the Cap on SBA Express Loans from $350,000 to $1 Million
The President is proposing to temporarily increase the maximum SBA Express loan size to $1 million, which would expand the program’s ability to help a broad range of small businesses through a streamlined approval process.

Unlike traditional 7[a] loans, lenders can use their own paperwork for SBA Express loans, which can be structured as revolving lines of credit. Currently, these Express loans are capped at $350,000, and carry a 50 percent guarantee. Fees would cover virtually all of the added costs of this proposal.

These proposals complement the President’s broader small-business agenda -- a key part of his overall jobs plan. The other elements of the small-business agenda include:

* Extending small-business expensing and bonus depreciation for 2010.

* Eliminating capital-gains taxes for small businesses in 2010.

* A Small Business Jobs and Wages Tax Credit that would cut taxes for more than 1 million small businesses by paying up to $5,000 for every net new job, and covers payroll taxes on overall wage increases in excess of inflation.

* A proposal to transfer, through legislation, $30 billion to a new Small Business Lending Fund that will support lending by community and smaller banks.

* Additional SBA lending proposals -- including an extension of the Recovery Act programs that eliminate fees and raise guarantees on SBA’s two largest loan programs, and permanent increases in the maximum loan sizes for major SBA programs.

An SBA Fact Sheet on these proposals is available at: http://bit.ly/SmallBizWorkingCapital

SOURCE: U.S. Small Business Administration
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Sens. Klobuchar and Franken Join Call for Help to Small Businesses; Letter to Treasury Secretary Tim Geithner Signed by 18 Democratic Senators

This week, Sens. Amy Klobuchar [D-Minn.] and Al Franken [D-Minn., pictured] joined 16 of their colleagues to call on U.S. Treasury Secretary Timothy Geithner to take immediate steps to utilize TARP funding to stabilize community banks and improve credit availability for small businesses.

“The American economy won’t recover until our small businesses recover,” said Sen. Klobuchar. “Small businesses are the engines that drive job creation in this country. Opening up credit and expanding into new markets will spur economic growth and strengthen our economy.”

“Credit for small businesses is crucial to the American economy and essential for getting us out of this recession,” said Sen. Franken. “Minnesota businesses shouldn’t continue to suffer because banks on Wall Street are unable to manage their balance sheets.”

Joining Sens. Klobuchar and Franken in sending the letter were Senators Patty Murray [D-Wash.], Patrick Leahy [D-Vt.], Carl Levin [D-Mich.], Jeff Bingaman [D-N.M.], Tom Harkin [D-Iowa], Barbara Mikulski [D-Md.], Herb Kohl [D-Wisc.], Tim Johnson [D-S.D.], Bill Nelson [D-Fla.], Debbie Stabenow [D-Mich.], Maria Cantwell [D-Wash.], Ben Cardin [D-Md.], Sherrod Brown [D-Ohio], Jean Shaheen [D-N.H.], Jeff Merkley [D-Ore.], and Rolland Burris [D-Ill.].

Following, is the full text of the letter sent to Secretary Geithner:

* * *

February 3, 2010

The Honorable Timothy Geithner
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Geithner:

We write today to express our deep and growing concern about the deteriorating condition of community banks and the lack of credit availability for small businesses across the United States.

Community banks play a significant role in providing credit to businesses in communities throughout the country. They provide approximately one third of all loans under $1 million and half of all loans under $100,000.

Despite the return to profitability for most of the large, Wall Street banks that received the lion’s share of public assistance under Troubled Asset Relief Program [TARP], the survival of hundreds of small, community banks remains in question. With considerable exposure to future losses on loans tied to real estate markets -- both residential and commercial -- we call on you to take immediate steps to dedicate more attention and resources from TARP to stabilize this critically important segment of the banking industry.

According to data provided by the Federal Deposit Insurance Corporation [FDIC], 148 banks have failed since 2008. These failures impose significant costs on the Deposit Insurance Fund [DIF] and have far-reaching economic ramifications on the communities and businesses they serve.

The continued existence and steady growth of hundreds of billions of dollars in non-performing loans is placing further strain on banks across the country; 552 institutions were on FDIC’s “Problem List” as of the agency’s publication of its Quarterly Banking Profile for the Third Quarter of 2009.

This ominous overhang of impaired assets is necessitating that banks restrict lending and build capital to protect against further losses. Indeed, according to data released by the Federal Reserve, credit has continued to contract since 2008. The tight credit environment -- particularly impacting households and small businesses -- continues to undermine the effect of aggressive monetary and fiscal policies put in place to accelerate economic recovery and job growth.

Small businesses remain the real engine behind job growth in the U.S.; over the past 15 years, over 64 percent of all new jobs were created by small businesses. However, under the weight of the economic recession and significantly reduced consumer demand, many small businesses have been forced to adjust their cost structure, including eliminating jobs. With credit-card lines and other forms of revolving credit being cut, those businesses that are trying to maintain their workforce are finding it increasingly difficult -- and, in some cases, impossible -- to access the liquidity they need to weather through this downturn.

Although recent economic indicators show the economy is slowly beginning to stabilize, small businesses continue to suffer. This is a key underpinning to the weak labor market and creating a drag on our efforts to more quickly reduce real unemployment, which remains above 10 percent. To help establish real, sustainable economic recovery, we must take new, decisive action that addresses the trend of declining credit availability head-on. Failure to do so may result in a heightened risk of a prolonged economic downturn similar to that experienced by Japan through the 1990’s.

Existing programs created by the Treasury to address the plight of community banks and improve credit to small businesses have unfortunately had little impact to-date. Therefore, we have developed new approaches that can improve existing programs to strengthen community banks and have put forth a number of new proposals to improve the availability of credit for small businesses. We strongly believe these ideas provide new strategies and opportunities to take precious taxpayer resources away from programs that have largely benefitted the Wall Street firms that bear a great deal of responsibility in bringing about the financial and economic crisis, and redirect them to programs that can help bring back jobs and restore prosperity in our communities.

Strong, decisive action must be taken immediately to reassess the full range of options where public resources, including TARP, can better help address the economic crisis and strain being felt by American families and businesses on Main Street. We look forward to working together with you in this effort, because it is integral to establishing the foundation necessary to support a swift and sustained economic recovery to the future.

Sincerely,

Senators Patty Murray [D-WA], Patrick Leahy [D-VT], Carl Levin [D-MI], Jeff Bingaman [D-NM], Tom Harkin [D-IA], Barbara Mikulski [D-MD], Herb Kohl [D-WI], Tim Johnson [D-SD], Bill Nelson [D-FL], Debbie Stabenow [D-MI], Maria Cantwell [D-WA], Ben Cardin [D-MD], Sherrod Brown [D-OH], Amy Klobuchar [D-MN], Jean Shaheen [D-NH], Jeff Merkley [D-OR], Rolland Burris [D-IL], and Al Franken [D-MN].

SOURCES: FinancialStability.gov, Sen. Al Franken
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President Obama Proposes Strong Budget for Small Business; Increases SBA Funding by More Than 20 Percent

Yesterday, U.S. Senate Committee on Small Business and Entrepreneurship Chair Mary L. Landrieu [D-La., pictured] praised the Small Business Administration [SBA] components of President Barack Obama’s budget proposal. For the second year in a row, the President has proposed increasing funding for the SBA and its programs, taking decisive steps to rebuild the SBA after eight years of cuts.

The request proposes to increase funding to the agency by $170 million from last year’s enacted level, to $994 million. This, along with new small-business, job-creating proposals the President outlined in his State of the Union address last week, show the Obama Administration’s strong support for small businesses.

"By requesting more money to help our small businesses succeed," said Sen. Landrieu, "President Obama’s budget proposal emphasizes that small business remains a top priority for the Administration, and is central to the President’s efforts to create jobs.

"As part of his budget, the President again showed his support for increasing the caps on small-business loans as a way to provide small businesses with immediate capital to grow and hire workers. This is a proposal I, along with Ranking Member Olympia Snowe [R-Maine], introduced last year. It has since gained even more bipartisan support, and passed the committee. It is my hope the proposal will be included in any job-creating measure introduced in the Senate."

President Obama’s proposed budget:

Expands Access to Capital
* Supports the increase of the maximum 7[a] loan size from $2 million to $5 million, 504 loans from $1.5 million to $5.5 million, and microloans from $35,000 to $50,000. Sen. Landrieu introduced, and the committee passed, legislation that matches these increases;

* Supports more than $28 billion in small-business financing -- including $17.5 billion for the 7[a] loan guarantee program; $7.5 billion for the 504 loan guarantee program; and $3 billion for the Small Business Investment Company [SBIC] program, which provides venture capital financing to small firms;

* Supports $25 million in microloans, allowing intermediaries to provide small loans to entrepreneurs and start-ups; and

* Provides $5.9 million for the SBA’s international trade and export promotion programs, allowing the agency to support more than $1.1 billion in capital to small exporters and maintain their network of 18 export finance specialists.

Supports Counseling and Contracting Programs
* Provides $113 million to support about 900 Small Business Development Centers [SBDCs];

* Provides $14 million to support about 100 Women’s Business Centers [WBCs];

* Provides $7 million to support about 370 chapters of SCORE, a mentoring program involving retired executives;

* Provides $2.2 million for the Historically Underutilized Business Zones [HUBZones] program, which creates incentives for contracting with small firms to create jobs in underserved communities;

* Provides $3.4 million for the 7[j] technical assistance program, which provides small disadvantaged businesses with training in financing, business development, management, accounting and marketing;

* Provides $3 million to increase the reach of Emerging Leaders. Graduates of this program -- often in distressed areas -- have reported significant increases in revenues, government contracts, local hires, and access to financing; and

* Provides $11 million to support the job growth potential found in regional clusters of businesses. These clusters will involve public-private partnerships, which align federal resources with existing regional strengths and economic growth opportunities.

Provides Help for Those Hit by a Disaster
* Supports $1.1 billion in direct disaster-assistance loans, in line with the 10-year average;

* Includes a legislative proposal that would extend, from three to seven years -- the maximum term for businesses that want an SBA disaster loan, but have an existing line of credit with a bank or have enough cash on hand where they could get a conventional loan from non-SBA sources; and

* Requests $203 million to support for administrative expenses for the disaster program -- an increase of $126 million from last year’s enacted level. These funds are critical in supporting SBA’s effort to efficiently and effectively service its $8.4 billion active loan portfolio.

Reduces Risk and Increases Oversight
* Provides $2 million to strengthen lender oversight and on-site reviews, to ensure taxpayer dollars are going to those who need help the most;

* Provides $4 million to improve oversight of government contracting programs, including the HUBZone program, and to strengthen performance assessment and management of the Small Business Innovation Research [SBIR] program; and

* Provides $1.1 million to evaluate the SBA’s loan, counseling and other programs to optimize effectiveness.

"While this budget request shows the President’s strong dedication to small businesses, I will work to increase funding for critical counseling programs, and to restore funding for the Federal and State Technology Partnership program [FAST]," Landrieu added. "The FAST program increases small-business innovation opportunities, and is vital for the growth of rural areas. The program received funding last year for the first time since 2004, and must not disappear."

SOURCES: Library of Congress, U.S. Senate Committee on Small Business and Entrepreneurship, U.S. Small Business Administration
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