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Washington Watch - May 25, 2011

Senate Passes Extension For STTR, SBIR Programs

After a rollercoaster ride of passage or no passage in the Senate, the chamber has finally agreed to a one-year extension of the SBA research and technology outreach programs, Small Business Innovation Research (SBIR) and Small Business Technical Transfer (STTR). The programs will be funded through May 31, 2012. The one-year reauthorization was introduced by Senator Mary Landrieu (D-La.) after her longer term reauthorization of the programs failed to gain traction in the Senate.

Both programs have been operating under short-term reauthorizations for the past 2-3 years. One of the main sources of contention in the Senate's debate was opening up eligibility requirements for venture capitalist funded firms and the extent to which they should be allowed to compete for contract awards.

The House has also been moving a reauthorization of both programs through 2014, with greater flexibility for venture-funded firms to participate. That legislation is called Creating Jobs Through Small Business Innovation Act of 2011, H.R. 1425.

NASE Testifies At Senate Small Business Hearing

The Senate Committee on Small Business and Entrepreneurship recently held a hearing, “Small Business Recovery: Progress Report on Small Business Jobs Act of 2010 Implementation,” to hear testimony from administration experts, and small business owners and stakeholders on the implementation and impact of the Small Business Jobs Act.

In her opening statement, Committee Chair Mary Landrieu (D-La.) noted that the Small Business Jobs Act “has been touted as the single most important piece of small business legislation in decades.” Ranking Member Olympia Snowe (R-Maine) stated that “empowering small business is the best way to help” with job creation and economic growth.     

U.S. Small Business Administration Deputy Administrator Marie Johns testified that the SBA “is working diligently to implement every provision [of the Jobs Act] as soon as possible.” Deputy Administrator Johns noted that provisions in the Jobs Act helped the SBA put $12 billion in loans in the hands of small business owners, raised the limits on SBA loan sizes from $2 million to $5 million and provided $50 million for grants to Small Business Development Centers for counseling and training projects.

Treasury Department Deputy Assistant Secretary Don Graves spoke to the committee about two small business programs implemented by Treasury under the Small Business Jobs Act, the Small Business Lending Fund (SBLF) and the State Small Business Credit Initiative (SSBCI). The SBLF provides capital to qualified financial institutions with assets of less than $10 billion to encourage lending to small businesses, while the SSBCI has $1.5 billion in funds to strengthen state programs supporting lending to small businesses and manufacturers.

NASE Executive Director Kristie Arslan testified before the committee on the impact of the Jobs Act on the self-employed and micro-businesses. Arslan called for a making permanent the deduction on health insurance costs for payroll tax purposes included in the Jobs Act, saying that “it is imperative that the 22 million self-employed Americans receive the same tax treatment of health care costs as all other businesses.” The Small Business Jobs Act temporarily doubled the deduction for startup expenditures to $10,000, another provision that Arslan testified should be made permanent.

To read Arslan’s full testimony, click here. Watch an archived webcast of the hearing here.

NASE: Corporate Tax Reform And Small Biz

The Administration and members of Capitol Hill are working to put together a comprehensive plan to retool the corporate tax system. Read President Obama's take on corporate tax reform in a press conference earlier this year.

In addition to adjusting some tax rates and expenditures, some proposals are looking to lower the current corporate tax rate. Here are some of the top proposals from the White House and congressional lawmakers, according to Congressional Quarterly:

  • House Fiscal 2012 Budget - lower corporate tax rate to 25 percent (currently 35)
  • Obama fiscal commission - adjust corporate tax rate between 23 and 29 percent
  • Senator Ron Wyden (D-Ore.) - flat 24 percent tax rate
  • Rep. Rob Woodall, R-Ga./Sen. Saxby Chambliss, R-Ga. - repeal corporate income taxes and replace with a 23 percent national retail sales tax

In regards to tax reform, most NASE businesses will be indirectly affected by measures to overhaul corporate tax reform. The majority of micro-businesses file on their individual tax return, so adjustments to corporate tax rates are not likely to have a big impact. However, the Association does recognize that larger, healthy businesses often contract with smaller firms like micro-businesses and the self-employed. Thus, such tax reforms could be beneficial to the business community at-large.

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