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Washington Watch - November 4, 2009

Legislative Update: Federal Small Business Programs

The U.S. House of Representatives approved the Small Business Financing Investment Act (H.R. 3854) last week in order to clear the way for more financial resources for small business.

“The SBA’s lending programs are central to the economy, providing credit options for established businesses and ventures that are just getting off the ground,” said Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the House Committee on Small Business. “Unfortunately, these programs haven’t been updated in ten years. By bringing them in line with today’s realities, we can better meet entrepreneurs’ needs, helping more ventures launch and existing businesses keep operating.”

The 7(a) SBA loans would make up the largest authorization in the bill sponsored by Rep. Schrader, with $20 billion authorized in the next two fiscal years. In addition to that $20 billion, the measure would also authorize $60 million over the next two years to businesses working to use renewable fuel sources. The SBA’s microloan program would increase the amount borrowers may obtain in the first year to $1 million from $750,000. Private lenders who process and fund SBA loans will be permitted to approve them more quickly.

Nearly $20 billion would be set aside for nonprofit companies working to develop communities. Small businesses may be eligible to receive loans from these nonprofit firm by meeting certain criteria, such as the creation of jobs or other activities. The Senate also approved a measure to extend the Small Business Administration’s Small Business Innovation Research and Small Business Technology Transfer programs through early next year.

For more information, visit the House Committee on Small Business site.

Senate Committee Explores If Health Reform Proposals Meet Needs of Small Firms

The Senate Committee on Small Business and Entrepreneurship recently held a hearing on health care reform and small business entitled, “Reform Done Right: Sensible Health Care Solutions for America’s Small Businesses.”

In her opening statement, Committee Chair Senator Mary Landrieu (D-La.) expressed concerns about the impact of high health care costs on small firms. “Today, small businesses are seeing their health care costs increase faster than the prices of the products and services they sell – four times faster than the rate of inflation since 2001,” said Sen. Landrieu. “If Congress fails to act now, health care costs are only expected to continue to rise.”

Witnesses from the Small Business Administration (SBA), Treasury Department and small business groups, as well as small business owners testified before the committee that current health care costs were unsustainable for small business owners, and offered a variety of suggestions to deal with rising costs.

“Less than half of small employers with three to nine workers offer health coverage. Fully 13 million of America’s uninsured workers are employed by businesses with fewer than 100 employees,” stated SBA Administrator Karen Mills. “It’s clear that we can’t help our nation’s uninsured without addressing the need for access to affordable health insurance for small businesses.”

Witnesses before the committee testified in support of an insurance exchange with as large a pool as possible, tax credits to help small businesses pay for health care coverage for employees, allowing small businesses and their employees to purchase insurance across state lines and a measure that prohibits insurance companies from denying coverage due to pre-existing conditions.

Also noted in the testimony of multiple witnesses was the current inequity in the tax code faced by the self-employed because they are not allowed to fully deduct the cost of health insurance as larger businesses are.  These witnesses called for this inequity to be remedied and the self-employed to be able to fully deduct the cost of their health insurance premiums for the purposes of both income and self-employment taxes.

A number of participants expressed concern at how small businesses pay significantly more than larger businesses for the same coverage, and also were opposed to an employer mandate to provide health insurance coverage.

To read testimony if full and view footage of the hearing, please click here.

Small Biz Health Care Roundup

Here's a sampling of this week's top health care reform articles. If you find an article or blog that you think should be considered, drop us a line at

  • GOP Health Bill Focuses On Lower Costs (Politico) - "[House Minority Leader John] Boehner hasn’t released the full details of the bill but has said that it would make it easier to buy insurance across state lines, impose strict limits on medical malpractice lawsuits and allow individuals and small businesses to pool their resources to buy insurance as a group. That is designed to boost their purchasing power to help lower individual premiums."
  • The GDP, Small Business and Health Insurance Reform (White House Blog) - The title is pretty self-explanatory but the article also links to a study that shows how reform will bring down business costs for entrepreneurs.
  • Congress: Stand With Small Business, Support Health Reform (Huffington Post) - OpEd piece from U.S. Public Interest Research Groups.
  • Survey: Most Small Businesses Expect 2010 Rebound (Denver Business Journal) - Half (52%) of small-business owners expect business to pick up next year. Concern about health care costs ranked as a top short-term worry.

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