A Tall Order For 2003

Healthcare, financing tops to-do list for Small Business Committee

The year 2002 was very challenging for small businesses, as a sluggish economy, combined with rising costs for healthcare, taxes, and regulatory fees, created an environment where one misstep could spell disaster for an enterprise. In 2003, however, entrepreneurs could see a little relief on the legislative front.

The House Small Business Committee, a bipartisan agency created to promote and enhance small business through legislation, is looking to address the challenges of today’s small businesses (see “New Ideas, New Solutions,” November 2002).

According to Congresswoman Nydia M. Velázquez (D-N.Y.), the ranking member of the committee, the main challenge for entrepreneurs remains access to capital. She is working on expanding the Small Business Administration’s 7(a) loan program. “This program could do so much more if it were fully funded,” says Velázquez. “Capital helps businesses to grow, expand, and create jobs. In this time of economic instability, expanding access to capital will help our communities the most.”

Congressman Donald Manzullo (R-Ill.), chairman of the committee, hopes to push for an adjustment in the subsidy rates for SBA loan programs, claiming the Office of Management and Budget (OMB), the agency that oversees the preparation of the federal budget, uses a formula that overcharges small business and uses the excess to fund other government programs. “The government is using the 7(a) and 504 programs as a cash cow to fund other programs as opposed to charging enough to meet the needs of the programs themselves,” says Manzullo. “All we ask is that the fees charged are no more than the cost of the programs. That’s not a fault of the SBA. It’s the OMB.”

Other issues on the agenda include:

  • Opening up the federal procurement system to small businesses, especially enterprises owned by women and minorities. According to Velázquez, while female, minority-owned businesses are starting up at twice the national rate and 42% of women-owned companies produce products the government buys, federal agencies have not met even half of their 5% contracting goal.
  • Legislation to increase expensing limits for small businesses. This is one of Manzullo’s top issues for 2003. He hopes small employers will be able to write off more capital improvements, encouraging new investments.
  • Affordable employee health insurance. Velázquez says 25 million Americans without health insurance live in a household with someone employed by a small business, and cost is the No. 1 reason small businesses do not provide health insurance for their workers. Health costs are again on the rise for small businesses, Velázquez says, 20% more than for larger corporations.

It’s uncertain how many of these issues will become law. The Small Business Opportunity Enhancement Act of 2001, which would have allowed the SBA to appeal an agency’s decision to consolidate a contract, was pulled at the last minute in May of that year. But with the Committee believing that small business is the country’s best hope for pulling the economy out of recession, entrepreneurs might have something to look forward to in 2003.

Mail your small business questions to Savvy Solutions, BLACK ENTERPRISE130 Fifth Ave., New York,

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