Hearings, Reports and Prints of the Senate Select Committee on Small Business

Letter dated April 28, 1976, to Hon. James T. Lynn. Director, Office of Man-
agement and Budget, Executive Office of the President, Washington, D.C.,
from Hon. William D. Hathaway, U.S. Senate____

Letter dated June 1, 1976, to Hon. William D. Hathaway. U.S. Senate, from

Alan M. Kranowitz, Assistant to the Director for Congressional Rela-

tions, Office of Management and Budget, Executive Office of the Presi-

dent, Washington, D.C_-_

Letter dated June 9, 1976, to Richard G. Kendall, president, Veribest Sys-

tems Co., Lewiston, Maine, from Hon. William D. Hathaway, U.S.

Senate

Letter dated June 17, 1976, to Hon. William D. Hathaway. U.S. Senate,

from Alan M. Kranowitz, Assistant to the Director for Congressional

Relations, Office of Management and Budget, Executive Office of the

President, Washington. D.C__.

Letter dated June 30, 1976, to Richard G. Kendall, president, Veribest

Systems Co., Lewiston, Maine, from Hon. William D. Hathaway, U.S.

Senate

Letter dated July 8, 1976, to Hon. William D. Hathaway, U.S. Senate, from

Richard G. Kendall, president, Veribest Systems Co., Lewiston, Maine___

Letter dated July 14, 1976, to Hon. William D. Hathaway. U.S. Senate,

from Richard G. Kendall, president, Veribest Systems Co., Lewiston,

Maine

Table, business loans and prime contracts, statutory limitation require-

ments. Small Business Administration, January 4, 1977-----

Page

Table, economic opportunity loans, statutory limitation requirements, Page
Small Business Administration, January 4, 1977_----

Table, development company loans, statutory limitation requirements,
Small Business Administration, January 4, 1977---.
Table, small business investment company program, statutory limitation
requirements, Small Business Administration, January 4, 1977--‒‒‒‒
Small Business Administration surety bond guarantee fund, statement of
need and purpose---

January 7, 1977:

Morning session__.

HEARING DATE

SBA PROGRAM AUTHORIZATION LEVELS

FRIDAY, JANUARY 7, 1977

U.S. SENATE,

SELECT COMMITTEE ON SMALL BUSINESS,
Washington, D.C.

The committee met, pursuant to notice, at 9:30 a.m., in room 424, Russell Senate Office Building, Hon. Gaylord Nelson, chairman, presiding.

Present: Senators Nelson and Javits.

Also present: William B. Cherkasky, staff director; Allen W. Neece, Jr. legislative counsel; Larry M. Yuspeh, financial analyst; and Larry S. Greenberg, minority counsel.

Senator NELSON. The committee will please come to order.

This hearing marks the beginning of an important new period for the Senate Small Business Committee.

It is the first legislative hearing ever held by this committee under the powers given it by Senate Resolution 104, which passed the Senate on April 29 of last year.

The Small Business Administration has one of the most important missions of any agency in the Federal Government. Section 2 of the Small Business Act says:

The essence of the American economic system of private enterprise is free competition. Only through full and free competition can free markets, free entry into business, and opportunities for the expression and growth of personal initiative *** be assured. It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, in-so-far as is possible, the interests of small business concerns in order to preserve free competitive enterprise * * * Traditionally, the SBA has responded to this stated mission by making direct loans and loan guarantees to eligible small businesses. While capital formation is a major problem for small firms, it is surely not their only one. Small business suffers from anticompetitive activities by large firms, from excessive regulations by Government agencies, from lack of management expertise, from limited access to new technical processes, from the lack of time and knowledge of how to avail itself of Federal procurement markets, and from an inability to make its needs known to this Nation's lawmakers.

If the SBA involves itself only marginally in solving these problems, it can only marginally achieve its stated mission. Lending is important, but so is advocacy and procurement, management, and technical assistance, the perennial stepchildren of the SBA.

Today, Mitchell Kobelinski, the SBA Administrator, will discuss the agency's program authorization needs and will relate his views on new directions that he believes the SBA should take. Senator Javits, do you have a statement?

Senator JAVITS. I just want to welcome our Administrator, and to express my support and solidarity with our chairman, with whom we work very closely together, and, third, to emphasize my own interest in the so-close association of the agency with business, that is the private business community.

I think that it has inexhaustible possibilities for small business. The city of New York, of which I have the honor to represent, is essentially a small business city. The overwhelming employment is small business, and our terrible disaster of losing about 75,000 jobs a year, which no city can stand, is attributable to small business, and yet it is the mightiest citadel of the private enterprise system in the United States, and probably in the world, and yet the two somehow or other do not mesh, and if we have a mission, Mr. Chairman, for the future, as this is our opening hearing as a legislative committee, I would certainly hope that, one, our Administrator and his colleagues will do their utmost to redesign the agency toward that end.

Incidentally, that ought to please the Congress, because it will cost us much less cash. It will cost us credit, but not cash. which is very important, because the guarantee system in the United States has been very successful in most cases, except student loans, other than that, it has made money.

Mr. Chairman, I only make these observations because it is our first day, but I do wish to dedicate myself, I have no doubt the chairman would too, to working along these lines.

This in my judgment, with all respect to the Fed and everything else, is the most critical business agency in the Federal Government to the rank and file of the American people.

Thank you.

Senator NELSON. Thank you, Senator Javits.

I have a statement from Senator Hathaway, who is unable to be here, with some accompanying documents, which he wishes to have entered in the record.

They will be printed in the record.

[The statement and documents follow:]

STATEMENT OF HON. WILLIAM D. HATHAWAY, A U.S. SENATOR FROM THE STATE

OF MAINE

Mr. Chairman, I am pleased to support the task the Senate Select Committee on Small Business is undertaking today.

In the last Congress, the Senate, by a vote of 71-12 overwhelmingly passed S. Res. 104, which I sponsored, to confer upon the Small Business Committee legislative authority over the Small Business Administration.

Today, the Committee will review the Program Authorization requests for fiscal year 1977 with the intention of exercising its oversight responsibilities. In establishing the Small Business Administration in 1953, Congress declared: "That the Government should aid, counsel, assist, and protect, insofar as is possible, the interest of small business concerns in order to preserve free, competitive enterprise . . . and to maintain and strengthen the overall economy of the Nation."

However, the SBA lending programs do not reach a sufficient number of the 13 million small and independent businesses nor is there adequate emphasis placed on the job creation aspect of such policies.

The existing programs should be adapted, reviewed, and reworked by both the executive and legislative branches of Government to more adequately respond to the needs of small business.

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