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Federal Market Intelligence for Small Business |
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Set-Aside Alert news analysis:Trump’s deep budget cuts at SBA spur bipartisan resistanceLawmakers oppose drop in funds for SBDCs, other aidPresident Trump’s proposed budget for fiscal 2021 making deep cuts at the Small Business Administration is getting a negative response from both Democrats and Republicans in Congress. In the House, Rep. Nydia Velazquez, D-NY, chair of the House Small Business Committee, released a report warning that the SBA funding reductions would “severely impact” small businesses. In the Senate, Sen. Marco Rubio, R-FL, chair of the Senate Committee on Small Business and Entrepreneurship, on Feb. 12 wrote a letter urging the SBA not to accept President Trump’s proposed 35% cut to funding for the agency’s Small Business Development Centers (SBDCs). “The SBA’s request is a nearly 35% reduction from their current Congressionally authorized budget. This new budget process stifles their ability to properly budget and ultimately limits the services SBDCs can provide to America’s entrepreneurs,” Rubio’s letter stated. In addition to Rubio, the letter also was signed by Sen. Ben Cardin, D-MD, and Rep. Nydia Velazquez, D-NY. Congress’ small business committees previously had a long history of bipartisanship, which has waned to some degree in recent years. While the House panel has passed a number of bipartisan bills concerning mostly technical matters in recent years, this is one of the few times in recent memory that small business committee members of both parties have resisted aspects of the president’s proposed SBA budget. Rubio’s letter Rubio’s letter focused on the SBDC program, which consists of nearly 1000 locations providing counseling, training and technical support to small vendors. The SBDC budget would be reduced by 35%, from $135 million down to $88 million, under the Trump blueprint. Rubio said SBDCs should not have to align their budgets with the president’s request. “By requiring SBDC grant recipients to draft their annual budgets to this level, the SBA is effectively reducing a center’s time to serve clients, inhibiting their ability to efficiently budget and spend grant dollars, and ultimately limiting program success and performance,” Rubio’s letter stated. House Committee report Overall, under Trump’s plan, the SBA would see its budget fall to $819 million, from $998 million, which is a 17.9% decrease, according to a report from the House Small Business Committee, which is controlled by Democrats under House rules because the House majority is Democratic. The committee is chaired by Velazquez and the report was prepared by her staff. Hard hit areas at the SBA include entrepreneurial development, innovation research and microloan programs. The SBA’s administrative support for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs would be reduced by 42%, from $7 million down to $4.1 million. Another innovation-related program, Federal and State Technology Grants (FAST) would be eliminated. Its budget was $3 million last year. The entrepreneurial and microloan programs would lose 36% overall, including:
The Trump budget also expects small business owners to pay $80 million in new fees for SBA loan programs next year, the report noted. While Rubio spoke out in the Senate, Republicans on the House small business committee did not issue a statement on the Trump budget on their website. A call to the GOP committee staff was not returned by press time.
More information:
House report: https://bit.ly/32syjWC
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Washington Insider:
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