September 23, 1997
The Administration strongly supports reauthorization of the programs of the
Small Business Administration and supports House passage of H.R. 2261, with the
changes described below. The bill reauthorizes small business loan programs
which assist tens of thousands of small businesses each year and contribute to
the overall vitality of the Nation's economy.
The Administration strongly opposes, however, proposed amendments to current law on "contract bundling," loan liquidation and litigation under the Section 504 program, and the extension of the Small Business Competitiveness Demonstration Program. The Administration will seek amendments to address these concerns as the bill proceeds through the legislative process.
Contract Bundling. The Administration understands that the House will consider an amended version of H.R. 2261 that will include a provision addressing "contract bundling." The Administration is committed to maintaining a strong role for small businesses in Federal contracting, but is concerned that the proposed changes to the current contract bundling law could deny taxpayers the cost savings and improved quality achievable by appropriate consolidation of Federal contract requirements. Therefore, the Administration urges the House to maintain current law, which provides sufficient authority and flexibility for the Administration to protect the important interests of small businesses.
The Senate-passed SBA reauthorization bill (S. 1139) also contains a provision on contract bundling. Although opposing this provision, the Administration notes that the Senate-passed provision would impose less additional burden on Federal agencies than other bundling language that has been considered by this Congress.
Section 504 Litigation. The Administration strongly opposes authorizing premier certified lenders to judicially foreclose and liquidate loans. Such broad authority to litigate raises significant problems regarding SBA's oversight responsibilities.
Small Business Competitiveness Demonstration Program. The Administration strongly opposes any extension of the Small Business Competitiveness Demonstration Program. Small businesses will substantially benefit from discontinuing this program and lifting the unnecessary paperwork and reporting burdens it imposes.
Other Administration Concerns
The Administration will also seek amendments to:
H.R. 2261 as reported would increase direct spending; therefore it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act of 1990. Therefore, if the bill as reported were enacted and these costs are not offset during the remainder of the session, a pay-as-you-go sequester would be triggered at the end of the session. OMB's preliminary scoring estimates of this bill are presented in the table below. Final scoring of this legislation may differ from these estimates. (We understand that a managers amendment may include language that eliminates this effect. If not, the Administration will work with Congress to identify appropriate offsets.)