Growth Strategies

Small Businesses Hit by Budget Cuts

Nearly half of federal programs are slated for outright termination, says a House committee; ''no small business sector has been spared in this bud...
Stephen TaubMarch 6, 2006

Three-quarters of the 100 federal programs designed to help small businesses have been targeted for cuts or elimination in President Bush’s fiscal 2007 budget request, according to the House Small Business Committee.

Cutbacks on small-business initiatives have increased 200 percent during the past four years, added the committee in a report. “This year’s [budget] request is truly the worst yet,” said Rep. Nydia M. Velazquez (D-N.Y.), the committee’s ranking Democrat, in a press release. “These cuts are hitting entrepreneurs across the nation — from rural to urban areas, from technology-based firms to small family farms — no small business sector has been spared in this budget request.”

This year, almost half of the programs are slated for outright termination, stated the committee report; nearly 40 more would be cut by more than 80 percent. In addition, the report observed that the agencies that administer the most programs providing assistance to small businesses — the Department of Agriculture, the Small Business Administration, and the Department of Labor — all received significant cuts.

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The report also asserted that for every dollar invested in certain of the small-business initiatives, three dollars are generated in tax revenue. Among the programs slated for cuts, wrote the committee, are 15 initiatives that foster innovation and competitiveness, 14 that focus on disaster-relief and price-destabilization-relief programs, and 5 that promote energy efficiency. “These cuts will strongly impede the ability of entrepreneurs to access disaster relief, create solutions for energy efficiency, and remain on the cutting edge of technological advancements worldwide,” stated the press release.

In other news, the Securities and Exchange Commission’s Advisory Committee on Smaller Public Companies published for public comment an exposure draft of its final report and proposed recommendations to the commission. Comments are due by April 3.