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Small Business Committee Newsletter Printer Friendly Version
Small Business Committee Notes
Friday, March 17, 2006 Printer Friendly Version
Small Business Committee Notes March 17, 2006 -- Issue 109-38 Phil Eskeland, Policy Director, House Committee on Small Business _______________________________ Chairman Manzullo: President Bush’s Budget Will Help America’s Small Employers Thrive, Create Jobs On Wednesday, March 15, House Small Business Committee Chairman Don Manzullo (R-IL) said President Bush’s proposed 2007 budget gives our nation’s 25 million small business owners the tools they need to continue to grow and create jobs for Americans. During a full committee hearing on the budget proposal on Wednesday, Chairman Manzullo said the President’s budget addresses the top concerns for America’s small employers: high taxes and surging health care costs. The President’s plan would make the tax cuts permanent, eliminate the immoral death tax, provide greater small business expensing, expand the deductibility of health savings accounts, and allow national associations to provide more affordable health insurance to small businesses. "Huge job-killing tax increases loom on the horizon for our small employers if we fail to make the tax cuts permanent," Chairman Manzullo said. "I stand with the President and join his efforts to provide continued tax relief for our entrepreneurs as well as options for more affordable health care options for our small business owners and their employees." Chairman Manzullo thanked Small Business Administration (SBA) Administrator Hector Barreto – who testified at the hearing – for his efforts to "do more with less" at the agency. Despite shedding hundreds of millions of dollars in expenses since 2001, the SBA is providing better service to more small employers today, Chairman Manzullo said. While calling the SBA budget "generally sound and reasonable," Chairman Manzullo expressed opposition to the Administration’s proposals to increase its loan guarantee fees to cover administrative costs and to institute an adjustable interest rate for disaster loans in the 5th year. Also during Wednesday’s hearing, Chairman Manzullo announced that the process for reauthorizing the SBA programs is well underway. Chairman Manzullo’s reauthorization proposals will include legislative changes that improve the SBA’s response to catastrophic disasters and expand the reach of the SBA’s finance and entrepreneurship programs to more small businesses in America. For further information, please contact Phil Eskeland, Policy Director. _______________________________ Representatives Manzullo and Hart Introduce Legislation to Lower Health Insurance Costs for Self-Employed On Thursday, March 16, House Small Business Committee Chairman Donald Manzullo (R-IL) joined Congresswoman Melissa Hart (R-PA) introduced legislation to help America’s 25 million small business owners better afford health insurance for their families and their employees. The Equity for Our Nation’s Self-Employed Act (H.R. 4961) would allow small business owners to deduct health care costs from their payroll taxes (Social Security and Medicare). The average self-employed individual pays $10,880 annually for health care coverage and would save $1,664 through this tax deduction. Current law allows small business owners to deduct health insurance costs from their individual federal income taxes. Self-employed workers pay a 15.3 percent payroll tax on top of their individual income tax. Allowing them to deduct their health insurance costs from their payroll taxes would effectively reduce those costs by more than 15 percent. "Surging health care costs are drowning our small business owners, especially the self-employed who have to pay extra tax on their premiums," Chairman Manzullo said. "This is a wonderful bill that would provide our small employers – the job creators of our economy – tremendous relief at a small cost.” The Hart-Manzullo bill also makes tax policy fairer for the self-employed. Corporations are already able to deduct their health care expenses from all their taxes. The legislation is strongly supported by a coalition of small business groups, including the National Association for the Self-Employed and the National Small Business Association. For further information, please contact John Westmoreland, Chief Tax Counsel. _______________________________ REA&T Subcommittee Hearing on the Spring Rise on Missouri River On Wednesday, March 15, Representative Sam Graves (R-MO) chaired a Rural Enterprises, Agriculture and Technology (REA&T) Subcommittee hearing on the science behind the proposed spring rise on the Missouri River and the negative effects it will have on small businesses located on or near the Missouri River. Below is a copy of the opening statement of Chairman Graves. “This hearing, entitled, ‘The Missouri River and its Spring Rise: Science or Science Fiction,’ will look at the science used to by U.S. Fish and Wildlife Service to mandate management of the Missouri River by the U.S. Corps of Engineers. I am adamantly opposed to a spring rise. First, this policy is based on unproven science. According to the Fish and Wildlife Service, a spring rise might increase the spawning habits of the endangered pallid sturgeon…might. In accordance with this theory and the Endangered Species Act, the Army Corps of Engineers is mandated to implement an artificial, man-made spring rise. However, many, including the Missouri Department of Resources, dispute that the spring pulse will cause the pallid sturgeon to spawn. In fact, many say that the spring pulse could further harm the piping plover and the least tern. Second, the spring rise, which according to the Army Corps of Engineers will occur in May pending sufficient water levels in upper basin reservoirs, will happen at a time when a rise already occurs naturally. A combination of a naturally occurring rise and a man-made spring rise can create significant problems and flooding. In a state with a history of floods, as well as many acres and livelihoods in the flood plain, a flood could have a devastating impact on the economy and public safety. In 1993, the Missouri River flooded and its impact was devastating. Most people outside of Missouri have probably forgotten this but for the citizens of Missouri, it is embedded in their memories. This flood cost 48 people their lives, cost $15 billion in damages, and damaged 72,000 homes. Now our government wants to play Russian roulette with the same river through a man-made flood. To add insult to injury, we all were informed late last year by the U.S. Department of Agriculture that a farmer’s crop insurance will not cover any destruction caused by a spring rise. The USDA reasons that crop insurance only covers crops destroyed by a ‘natural occurring event.’ The USDA goes on to explain that a federally mandated spring rise will not be covered because it’s man-made, not naturally occurring. As I understand it, the government is mandating a flood that could impact over one million Missourians in the Missouri river flood plain but the government will not cover the flood costs associated with its own policies. That is absolutely ridiculous. As a farmer, I understand the risks associated with my business. It is my job to prepare and reduce as much risk as I can. However, we have an instance where the government is coming in and throwing us a pitch we have never seen before. This seems counterproductive. Farmers themselves are becoming an endangered species. There are other alternatives that will protect these threatened species without threatening the livelihoods of farmers and others who depend on the Missouri River.” For further information, please contact Piper Largent, Professional Staff. _______________________________ RR&O Subcommittee Hearing on Cyber-Security On Thursday, March 16, Representative Todd Akin (R-MO) chaired a Regulatory Reform and Oversight (RR&O) Subcommittee hearing on the state of small business security in a cyber economy. Below is a copy of Chairman Akin’s opening statement: “Today this Subcommittee seeks to better understand the impact small business cyber security has on the well-being of the economy. This Subcommittee also seeks to determine the types of threats that small businesses encounter on a daily basis. According to the Small Business Technology Institute Report released in July 2005: If small businesses are not made fully aware of the economic impact of information security incidents, they will continue to under-invest in information security protection, and their exposure will continue to increase as their infrastructures become more complex. This increasing individual exposure, when aggregated across the many millions of small businesses in the U.S., supporting more than half of the Nation’s GDP, represents an extremely high and worsening point of exposure for the U.S. economy as a whole. Businesses do not have to sell their products online to be at risk of a security breech. They are exposed simply by being connected to the Internet. The government and large firms have dedicated information technology professionals who protect their electronic infrastructure. Small businesses seldom have either dedicated IT professionals or the resources necessary to provide adequate levels of protection. I look forward to hearing the testimony of the witnesses to learn more of what we can do to protect small business from cyber security threats.” For further information, please contact Chris Szymanski, Professional Staff. _______________________________ Issues in Brief On Wednesday, March 15, the Senate Health, Education, Labor, and Pensions (HELP) Committee completed the “mark-up” of a version of Association Health Plans (AHPs), legislation introduced by HELP Committee Chairman, Senator Mike Enzi of Wyoming (S. 1955). S. 1955 would make it easier for small businesses to band together to offer health insurance. However, insurers who offer these plans would be required to provide at least one plan that matches the benefits offered to state employees of one of the five most populous states (California, Texas, New York, Florida, and Illinois). The bill would also make AHPs available to all insurers, not just those that service the small business market. S. 1955 passed on a party-line vote of 11 to 9 and now awaits Senate floor action. On Thursday, March 16, the Senate narrowly passed a $2.8 trillion Fiscal Year 2007 budget resolution (S.Con.Res. 83), which provides a blueprint for all federal spending next year, by a vote of 51 to 49 after approving by a vote of 73 to 27 an amendment authored by Senators Arlen Specter (R-PA) and Tom Harkin (D-IA) to add more than $16 billion to the proposed $873 billion discretionary spending cap. The Senate rejected efforts to trim mandatory spending, which President Bush had targeted for $65 billion in savings over the next five years. Thus, the Senate Fiscal Year 2007 budget resolution, if it becomes final, will make it extremely difficult to pass spending or tax cuts because there is no provision to have a FY ’07 budget or tax reconciliation bill, which protects against Senate filibusters, later this year. Of particular note, Senator Olympia Snowe (R-ME), Chair of the Senate Small Business & Entrepreneurship Committee, was able to pass her amendment (S.Amdt #3134) by unanimous consent to increase the funding level for the SBA’s Microloan program, Small Business Development Centers (SBDCs), Historically Underutilized Business (HUB) Zones, and other small business programs at the SBA by $130 million in FY ’07 with an equivalent reduction in spending in another account in the Senate budget resolution. Also, Senator Snowe’s amendment prohibits the SBA from charging variable interest rates on disaster loans paid by disaster victims. The House Budget Committee is expected to mark-up its version of the Congressional FY ’07 budget resolution soon after the St. Patrick’s Day district work period. On Thursday, March 16, the House passed by a vote of 348 to 71 a $91.9 billion emergency supplemental appropriations bill (H.R. 4939) for military operations in Iraq and Afghanistan and for hurricane relief and recovery. About $19.2 billion of H.R. 4939 is designated to help the victims of the 2005 Gulf hurricanes. Efforts to require offsets for this new spending with other spending cuts were rejected by the House. Last month, Congress passed a supplemental appropriation that transferred $712 million from the Disaster Relief Fund (DRF) at the Federal Emergency Management Agency (FEMA) to the SBA disaster loan program (see SBC Notes 109-35). H.R. 4939 returns the $712 million to FEMA’s DRF account and provides an additional $190 million in administrative funds to pay for the salary and expenses of SBA disaster loan processing personnel and $352 million in additional disaster loan budget authority for the SBA. This will provide approximately $2.4 billion in more lending for disaster loan victims, for a projected total disaster loan volume of $12.4 billion in Fiscal Year 2006. As of Monday, March 13, the SBA has approved over $6 billion in low-interest disaster loans to over 86,200 Gulf hurricane victims and has processed 72 percent of all the disaster loan applications. H.R. 4939 also provides $4.2 billion in new Community Development Block Grant (CDBG) funding for the Gulf States affected by the 2005 hurricanes, of which not less than $1 billion is designated for the repair and reconstruction of affordable rental housing. States from the affected Gulf region also have the option to use part of their CDBG funding to provide small business bridge loans. H.R. 4939 now awaits action before the Senate. _______________________________ Upcoming Events Week of March 19 is the St. Patrick’s Day District Work Period. The House will not return to session until Tuesday, March 28th. The next edition of SBC Notes will be published on March 31st. Thursday, March 30 – Regulatory Reform and Oversight (RR&O) Subcommittee hearing on the procurement assistance programs of the SBA. For further information, please contact Chris Szymanski, Professional Staff. _________________________________ Past hearings/mark-ups/roundtables/meetings in 2006 February 1, 2006 – Tax, Finance & Exports (TF&E) and Rural Enterprises, Agriculture & Technology (REA&T) joint subcommittee hearing on “Transforming the Tax Code: An Examination of the President’s Tax Reform Panel Recommendations.” February 8, 2006 – RR&O Subcommittee hearing on “The Internet Sales Tax: Headaches Ahead for Small Business?” March 2, 2006 – Workforce, Empowerment & Government Programs Subcommittee (WE&GP) hearing on the “Oversight of the Small Business Administration’s Entrepreneurial Development Programs.” March 8, 2006 – TF&E Subcommittee hearing on the “Oversight of the Small Business Administration’s Finance Programs.” March 15, 2006 – REA&T Subcommittee hearing entitled, “The Missouri River and its Spring Rise: Science or Science Fiction?” March 15, 2006 – hearing on the Fiscal Year 2007 Budget and Reauthorization Proposals of the SBA. March 16, 2006 – RR&O Subcommittee hearing entitled, “The State of Small Business Security in a Cyber Economy.” _____________________________ Small Business Website Check out the Small Business Committee website at http://www.house.gov/smbiz. The site includes regular updates on small business committee news. The site features special projects, press releases, hearings and scheduling information. _______________________________ Phil Eskeland Deputy Chief of Staff & Policy Director House Committee on Small Business Phil.Eskeland@mail.house.gov (202) 225-5821 To contact any staff member listed in the above newsletter, please use the general number for the House Small Business Committee – (202) 225-5821. Please E-mail me if you want to be removed from the mailing list or if you know of others who might be interested in receiving this publication. Mission Statement of the House Committee on Small Business "We promote the success of America’s small businesses by leveling the global economic playing field and reducing domestic burdens that impede their growth. In this spirit, we work to ensure that every branch of the U.S. government understands the critical role America’s small businesses play – both at home and abroad – including the jobs they create and the spirit of entrepreneurship they embody.”
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