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Small Business Committee Newsletter Printer Friendly Version
Small Business Committee Notes
Friday, March 31, 2006 Printer Friendly Version
Small Business Committee Notes March 31, 2006 -- Issue 109-39 Phil Eskeland, Policy Director, House Committee on Small Business _______________________________ Chairman Manzullo: Fed’s Interest Rate Hike Wrong Prescription to Reduce Rising Energy Costs On Wednesday, March 29, House Small Business Committee Chairman Donald Manzullo criticized the Federal Reserve Board for errantly raising interest rates to stem inflation caused primarily by high energy costs. In an ostensible attempt to head off inflation, the Fed on Tuesday again raised interest rates on short term borrowing based partly and substantially on the high cost of energy. The result of raising interest rates, however, is to slow economic growth and discourage consumer spending. The Fed wrongly and incredibly believes that raising the consumer interest rate on gas charged at the pump will reduce the price of petroleum and discourage manufacturers from using energy at a time they need to ramp up production to recover, Chairman Manzullo said. Consumption of energy is not caused by cheap interest rates but by other factors such as increased world-wide demand, inability to meet need, and in some cases the possibility of gouging by energy companies and oil producing nations, he added. "A hike in interest rates increases the price of energy, hinders the ability of small businesses to secure the capital they need to grow and create jobs, and makes U.S. companies less competitive overseas at a time of record trade deficits," Chairman Manzullo said. "Raising interest rates to stem the price of energy is like raising telephone taxes to lower the price of gasoline. They have nothing to do with each other." _______________________________ Chairman Manzullo Urges Chinese Officials to Give U.S. Manufacturers a Level Playing Field for Trade On Thursday, March 30, U.S. House Small Business Committee Chairman Don Manzullo (R-IL) urged a group of Chinese officials this week to start opening their country to more U.S. goods and services to narrow the trade gap and improve business relations between the two countries. Chairman Manzullo, who has chaired the U.S.-China Interparliamentary Exchange since 1999, moderated meetings between members of the U.S. House and China’s National People’s Congress (NPC) during Round 8 of the Exchange in Washington, D.C. on Wednesday. During the meetings, Chairman Manzullo told the Chinese officials that the U.S. Congress is readying several pieces of legislation to punish China if it does not stop manipulating its currency, which gives Chinese companies a 15-40 percent cost advantage over American businesses. Chairman Manzullo also said China must also crack down on piracy of American intellectual property and stop subsidizing its industries. “The American people and Congress grow more restless day by day as the trade deficit between our two countries continues to widen at record levels and more and more jobs are outsourced to China,” Chairman Manzullo said. “I strongly urge China to take action so our companies can compete on a level playing field. This will go a long way to narrow the trade deficit and improve relations between our two countries.” Chairman Manzullo also discussed ways the United States government is contributing to the trade deficit with China and efforts he is taking to promote more U.S. exports into China. Specifically, Chairman Manzullo said the Administration needs to reform its visa process to allow more Chinese business leaders to come to the United States to purchase American goods and services and to reform and update our nation’s export control laws. For further information, please contact Rich Beutel, Special Counsel. _______________________________ RR&O Subcommittee Hearing on the Procurement Assistance Programs at the SBA On Thursday, March 30, Representative Todd Akin (R-MO) chaired a Regulatory Reform & Oversight (RR&O) Subcommittee oversight hearing on the procurement assistance programs of the SBA. Below is a copy of the opening statement of Chairman Akin: “Most of you know that small businesses are the backbone of our economy. Most, if not all, large businesses started as small businesses. Small businesses are often times the driver of innovation in both products and services. The federal government plays an enormous role in promoting the growth of this sector as the consumer of goods and services that small businesses provide. In fact, it is the stated policy of Congress that the federal government should purchase 23 percent of their goods and services from small businesses. Furthermore, the Small Business Administration oversees procurement assistance programs for small businesses that are owned by the disadvantaged, women, veterans, or located in Historically Underutilized Business Zones. In the past, small businesses have expressed concern that SBA and other federal agencies were not providing sufficient nor effective procurement assistance. In addition there have been concerns that large businesses have received the benefit of small business contracting goals and policies. With a new associate deputy administrator for the Office of Government Contracting and Business Development at the SBA, this is the time for a new review of the government’s small business procurement policies. This hearing will examine whether or not federal procurement assistance programs are in fact helping small businesses compete in the fiercely competitive and complex contracting environment. Are the SBA’s and other federal agencies’ programs and efforts sufficient to assist small businesses in finding real procurement opportunities? Also, the subcommittee will explore innovative ideas and recommendations to improve and enhance assistance to small firms that want to do business with the federal government.” For further information, please contact Chris Szymanski, Professional Staff. _______________________________ Issues in Brief On Wednesday, March 29, the House Judiciary started to “mark-up” the Workplace Goods Job Growth and Competitiveness Act of 2005 (H.R. 3509), which was introduced by Representative Steve Chabot (R-OH), who also serves on the Small Business Committee, that would place a 12-year limit on product liability lawsuits against manufacturers of equipment used in workplaces, at construction sites, and on farms. Two amendments were dealt with and the remaining seven pending amendments are expected to be considered sometime next week. This issue is of particularly importance to small manufacturers because one product liability lawsuit could easily bankrupt a company as it did for one firm located in the Congressional district represented by House Small Business Committee Chairman Donald Manzullo (R-IL). Rockford, Illinois used to have Mattison Technologies, a manufacturer of large grinder machines that once employed 150 workers. In 1999, Mattison went bankrupt because it could not pay a $7.5 million product liability verdict on a machine built over 50 years ago. In fact, on the day the company closed, Mattison Technologies received another legal notice informing them that they were being sued for a machine built in 1917. On Wednesday, March 29, the House Budget Committee approved their version of the Fiscal Year 2007 budget resolution, which provides a blueprint for all federal spending next year, by a vote of 22 to 17. Overall, the House budget resolution provides for $2.732 trillion in total budget authority for FY ’07, which represents an increase of $22 billion over FY ’06. Total discretionary spending, of which spending on the SBA is included, would rise 3.6 percent from FY ’06 levels to $873 billion. This increase could accommodate the President’s request for a 7 percent increase in defense, 3.6 percent increase in homeland security, and a near-freeze in non-security discretionary spending but the ultimate distribution will be determined in the appropriations process. The House budget resolution also includes a “rainy day” fund of $4.3 billion to cover future large-scale natural disasters. In the area of mandatory spending (i.e., Medicare, Medicaid), the House budget resolution accommodates $1.486 trillion in spending, an increase of 3.8 percent over FY ’06 levels. Finally, the House budget resolution includes a relatively modest $6.8 billion in savings in mandatory spending over five years that can be accomplished and protected from a Senate filibuster through the budget reconciliation process. Last year, Congress passed a budget reconciliation package of $39.5 billion in mandatory spending cuts spread over five years. _______________________________ Upcoming Events Wednesday, April 5 10:00AM – full committee hearing entitled “IRS Latest Enforcement: Is the Bulls-Eye on Small Businesses?” For further information, please contact John Westmoreland, Chief Tax Counsel. Thursday, April 6 2:00PM Regulatory Reform & Oversight (RR&O) Subcommittee hearing entitled “Can Small Healthcare Groups Feasibly Adopt Electronic Medical Records Technology?” For further information, please contact Chris Szymanski, Professional Staff. Thursday, April 6 2:30PM The Federal Financial Management, Government Information, and International Security Subcommittee of the Senate Homeland Security and Governmental Affairs Committee, chaired by Senator Tom Coburn (R-OK), will hold a hearing on the effectiveness of the SBA in Room 342 of the Dirksen Senate Office Building. The hearing will discuss a working paper published by the American Enterprise Institute (AEI) that calls into question the general efficacy of government policies aimed to assist small business (http://www.aei.org/publications/pubID.23615,filter.all/pub_detail.asp). For further information about the hearing, please call (202) 224-2254. _________________________________ 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.” March 30, 2006 – RR&O Subcommittee hearing on the “Procurement Assistance Programs of the SBA.” _____________________________ 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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