Are SBA pilot programs best for small businesses?

Small businesses have to live within their means, and that translates to budgeting to the last dollar for many of them. The federal government should do the same.

Washington has been budgeting with the next generation’s dollars for too long, and the debt crisis has accelerated over the past five years. Today, the national debt is more than $17 trillion and still rising. The spending and debt problem is so immense, it leads to the following question regarding addressing this crisis: Where do we start?

{mosads}We start by demanding responsibility and sound decisions from every agency and department in Washington. That means we focus on the activities that are proven to work, and cut duplication and wasteful spending.

As the committee with oversight responsibility over the Small Business Administration (SBA), the House Small Business Committee looks closely at their spending priorities to ensure the SBA’s primary missions are being met. The SBA’s core missions are: to help provide small businesses access to capital, to promote federal contracting with small firms and to provide entrepreneurial counseling. However, like other bureaucratic entities, the SBA has some waste and duplication that is readily identifiable.

In a hearing on April 30, the committee examined some programs that the SBA is trying to initiate on its own, outside of congressional input and oversight. The agency, particularly since 2009, is increasingly creating its own experimental entrepreneurial development programs. These initiatives are duplicative of existing, proven and authorized programs at the SBA and at other agencies, and raise questions, including as to how much overlap there is with other federal programs and how the SBA is measuring the success rate of its programs.

The SBA’s penchant for spawning new programs on its own has generated bipartisan concern from committee members, because any shift of funds to a new agenda stretches scarce resources with no proof of program efficacy. If these ideas are worth exploring and ultimately implementing, they must meet certain criteria. They should be vetted and approved by the Congress, and they should also be justifiable to the taxpayers with clear metrics to measure success or failure and thus establish the value of the programs. The committee’s inquiries, including letters to the SBA regarding the initiatives, have so far not led to satisfactory answers.

New government programs should not be created without significant congressional input and proper public debate. That process can be deliberate, but it also helps identify and prevent redundancy, inefficiency and waste. As I stated in last week’s hearing, I welcome the SBA’s input on ways to aid entrepreneurs and improve existing programs. But the SBA’s ad hoc approach misses an opportunity to improve and streamline services, and instead shifts resources from the authorized core programs to a bureaucratic wish list.

It’s surprising to see the SBA continue to expand its entrepreneurial development footprint despite the 2012 findings of the Government Accountability Office (GAO), which identified 52 overlapping, duplicative programs at the Department of Agriculture, Commerce Department, Department of Housing and Urban Development, and the SBA in support of entrepreneurial endeavors. Still, the SBA forged ahead with multiple new programs. In its fiscal 2015 budget request, the SBA is seeking a total of $33 million for its initiatives — an increase of $12 million from what was requested and appropriated in fiscal 2014 — while congressionally approved program funding requests remained static.

This signals a troubling lack of focus at the SBA of the real priorities of the agency. For example, the SBA’s nine-year modernization of its COBOL-based technology systems remains incomplete and mismanaged, according to the GAO. This ongoing technology deficiency, despite millions in funding, fails to adequately protect the SBA’s $90 billion loan portfolio. In addition, the SBA is behind in updating procurement priorities as required by the small-business contracting reform signed into law two years ago.

Ultimately, the SBA’s job is not to create redundant programs but to efficiently serve small businesses — while being mindful of taxpayers’ dollars. I welcome the recent addition of new SBA Administrator Maria Contreras-Sweet to head up the agency, and urge a swift redirection of priorities on behalf of America’s 28 million small businesses and the many Americans aspiring to start a business.

Graves has represented Missouri’s 6th Congressional District since 2001. He is chairman of the House Small Business Committee and also sits on the House Transportation Committee.