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
October 4, 2004

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

Velázquez Condemns Failure to Preserve Entrepreneurs' Access to Affordable Capital
Democrats' attempt to avoid crisis is blocked by Republicans

WASHINGTON - Congresswoman Nydia Velázquez, Ranking Democrat on the House Small Business Committee chastised Republicans for "failing our nation's small businesses," as Congressional Republicans refused to ensure that the 7(a) program remains an affordable financing option for small businesses late last week, and she called for action to address this problem before Congress adjourns this week for the election.

"It is unbelievable that the Republican Leadership has allowed this to happen. The decision by the White House and Congressional Republicans to go back on their commitment to this nation's small business owners is the height of hypocrisy. Starting today many small businesses that use this popular lending program will pay thousands of dollars more. As a result, small firms will be unable to secure the capital they need to hire new employees and expand their business," Congresswoman Velázquez warned.

This comes on the heels of a year-long Republican crusade to destabilize and undermine the country's largest small business lending program. During January, the Bush administration shut down the program because they had requested insufficient funds. The program was reopened, but with severe limitations on loan size. Republicans stalled in alleviating these caps for nearly three months, greatly restricting small businesses' access to capital during this period. Only after Democrats rallied support did Congress act to pass a short-term fix to reopen the program.

During July, Republicans led efforts opposing the funding of the 7(a) program, and instead advocated for an increase in cost on small business owners that receive loans. This most recent blow to the 7(a) program came during consideration of H.J.Res. 107, which extends the federal government's operations through November 20, 2004. In an effort to continue several critical federal government programs, House Democrats offered a measure that would have ensured the 7(a) program would remain an affordable option for entrepreneurs. However, Republicans voted against the adoption of this measure.

Rep. Velázquez called the skyrocketing fees a new tax on small businesses - "We need to be clear about what the administration and Congressional Republicans are doing. This is nothing more than a new tax on small business. Now, on top of rising health care and energy costs, business owners will face increased costs to secure the financing they need to create new jobs and expand their operations. This is a shame."

Congresswoman Velázquez stated, "Congress has one last chance this week to do the right thing for small businesses and extend the 7(a) program's current fees. This is the final opportunity for Congress to save this critical loan program, which has gone through so much over the past year. If this move is not taken, it will be the first step in dismantling the government's role in providing small business access to affordable capital."

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