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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:
- Maintain the ability of Small Business Development Centers (SBDCs) to
charge appropriate fees for counseling services provided under the program; and
- Remove the existing statutory prohibition against Federal Financing Bank
(FFB) financing of section 504 and Small Business Investment Company (SBIC)
guaranteed loans.
Finally, the Administration fully supports increasing the participation of
disabled veterans in SBA loans and Federal procurement, but has concerns about
a provision which may be included in the managers amendment. The
Administration looks forward to working with Congress to develop approaches to
expand the participation of disabled veterans in these programs.
Pay-As-You-Go Scoring
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.)
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