House Marks-up SBA Budget, Export Programs Cut

The House Small Business Committee held a mark-up last week for the U.S. Small Business Administration (SBA) FY 2012 budget. While the administration requested $985 million—down slightly from the SBA’s allocation of $993 million in FY 2011 and $824 million in 2010—the committee approved a funding level that cut nearly $100 million from the administration’s proposal.

The committee highlighted numerous cuts to the proposal, including several export-specific programs, citing duplication with other government programs. In their formal letter—commonly referred to as the committee’s Views and Estimates—submitted to Chairman of the Budget Committee, Paul Ryan (R-Wisc.), the committee proposed elimination of the Office of International Trade.

The committee also endorsed cutting the enhanced exporting provisions approved under the Small Business Jobs and Credit Act last year, including: the $30 million State Export Promotion (STEP) pilot program; additional SBA personnel at Department of Commerce’s U.S. Export Assistance Centers (USEACs); and placing export staff in regional SBA offices.

The Views and Estimates document cites duplication in the STEP program, “…states have been promoting exports by their businesses for decades,” as a cause for the program’s elimination. The document goes on to state that, rather than implement SBA personnel, current USEAC staff ought to be capable of giving small business-specific advice with “minor additional training.” As justification for eliminating export staff in regional SBA offices, the committee states that, “Small businesses access SBA services through district offices,” and that regional office staff are unlikely to come into close contact with small businesses.

The committee estimated that the elimination of the Office of International Trade and all programs within that office would save $38 million–$30 million for the STEP program and $8 million for the operation of the office.

Export-specific programs weren’t the only ones to draw the attention of the committee’s red pen: the Office of Native American Affairs, the Prime Technical Assistance program, Veterans Business Outreach Centers, Women’s Business Centers, and the Community Express Loan Program all were recommended for elimination.

Justifying the cuts, Committee Chair Sam Graves (R-Mo.) stated, “Fourteen programs are defunded because they duplicate existing programs at the SBA or at other agencies.  Other programs receive no recommendations of funds where there is an absence of any evidence that they will help small businesses create new jobs.”

Unfortunately, SBEA worked hard to implement many of the export-specific provisions in the Small Business Jobs Act which the committee is now recommending for elimination. Given the important role exporting plays as a tool to reinvigorate the lagging U.S. economy, cutting programs to help expand exporting opportunities for small businesses could stymie long-term economic growth.

Please click here to view the committee’s full Views and Estimates.