News From Congresswoman
Nydia M. Velázquez
Representing New York's 12th Congressional District - Brooklyn, Manhattan, Queens
Ranking Democratic Member, House Small Business Committee

For Immediate Release
September 9, 2004

CONTACT: Kate Davis, Allyson Ivins, (202) 225-4038

Small Business Index Shows Economic Conditions for Small Business are Less Than Favorable
House Small Business Committee Democrats Release SBI for 2nd Quarter of 2004

WASHINGTON - Congresswoman Nydia M. Velázquez (D-N.Y.), Ranking Member of the House Small Business Committee, and her Democratic colleagues on the Small Business Committee, today released the Small Business Index (SBI) for the 2nd quarter of 2004, which tracks economic conditions facing small businesses. The SBI showed a downward trend, following a slight increase earlier in the year, demonstrating the ineffectiveness of the Bush administration's economic policies for small businesses.

"Over the past three years, our nation's economy has been in a state of uncertainty," Congresswoman Velázquez said. "Since the economic downturn of 2001, we have yet to see significant business growth. It is clear that this nation's job creators - small businesses - are struggling. While they typically create three out of every four new jobs, today's economic environment poses significant obstacles to their success. The release of today's SBI provides insight as to why our economy has failed to turn around."

The SBI was created last year to measure the economic climate for small business, taking into account 17 key indicators. Some of the indicators include those that reflect the rising cost of doing business, the number of unemployed, in addition to those that measure the impact of the federal budget and trade deficit, and credit conditions that oftentimes affect small businesses.

Last year's SBI was released at a time when it had reached a six-year low, however, conditions did improve and there was a slight increase in the SBI figures for a brief period in 2003. Lower gas prices, in addition to an increase in net farm income, an improving stock market, and stable interest rates all benefited the SBI. However, this brief upswing has taken a downward trend again - the SBI report released today stands at a new low of 71.03.

Today's SBI reports that the increase is due to rising health care costs and energy prices in the first half of 2004. In addition, little has been done to directly address the problems facing small businesses. The Bush administration has passed nearly $2 trillion dollars in tax cuts, which provided some short term relief but failed to lay the groundwork for sustained economic growth.

"President Bush may claim time and time again that he is helping our nation's small businesses," Congresswoman Velázquez said. "However, the rhetoric doesn't match the action and these initiatives are only allowing our economy to maintain the status quo instead of expanding. We need to see sound economic policies that will bring down the costs of doing business, increase small business confidence and competitiveness, and provide access to capital for small businesses. Policies that reinvigorate all sectors of the economy, enable entrepreneurs to do what they do best - turn dreams into realities, and create the jobs our economy needs."

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