The Small Business Administration has been busy.
The Washington Post Reports, under Maria Contreras-Sweet, who took over as administrator about a year ago, the agency has rolled out a string of new initiatives, including a grant program for business incubators, a competition for new technologies that improve the lives of working women, and an online entrepreneurship training course in Spanish. More recently, SBA unveiled a new Web-based tool to help connect small business owners with lenders, and officials say an even more robust online lending platform is coming in April.
The response from Congress? Not exactly a pat on the back.
During a hearing with Contreras-Sweet to discuss the agency’s budget request for next year, the House Small Business Committee on Wednesday criticized the department for, as Chairman Steve Chabot put it, repeatedly pursuing “its own initiatives and priorities” while at the same time ignoring directives from Congress.
“The budget request is the agency’s defense of its priorities to taxpayers, current small business owners, entrepreneurs, and Congress,” Rep. Chabot (R-Ohio) said during his opening remarks to the administrator. “If this is the agency’s defense, then it is has not gotten that accountability right.”
His comments echoed the sentiment in the committee’s official report on the budget, which was recently submitted to congressional leaders. In that document, members of the panel wrote that they are “strongly concerned about the SBA’s use of its pilot program authority,” which they noted was created to provide the agency with some measure of flexibility.
“The SBA, however, abuses this authority,” they wrote.
It’s a debate that may very well determine the future of the agency, which the administrator has admitted must work harder to stay relevant as new and more technology-savvy players move into the commercial lending and entrepreneurship training arenas. To keep up, SBA leaders have tried to quickly modernize and blend more technology into their operations.
However, that sense of urgency doesn’t lend itself to the bureaucratic hoops one must often jump through when launching programs funded by taxpayers.
During the hearing, Chabot and others specifically pointed to new entrepreneurial outreach programs, including the grants for early-stage business incubators, and the new online lender-to-borrower matching tool as examples of initiatives that were not approved by Congress and appear to duplicate programs run by other departments or non-governmental groups. Chabot says he will withhold approval of funding the agency has asked be reserved for those two initiatives.
Meanwhile, amid all the new technology the department is trying to implement, SBA officials have ignored repeated requests from Congress that they hire a chief information officer, Chabot said, calling the lack of action on that front “disturbing.” He also criticized the department for not committing enough resources to helping small businesses win more contracts from the federal government.
Contreras-Sweet didn’t receive much of a reprieve from Democrats on the committee. Rep. Nydia Velazquez of New York, the panel’s ranking Democrat, took issue with the department’s proposal to shutter its longstanding Program for Investment in Micro-entrepreneurs, commonly called PRIME, which provides funding to organizations that support low-income business owners. At the same time, she pointed out that the agency’s new Emerging Leaders pilot program offers training to firms with more than $500,000 in revenue.
“Here we are creating programs to assist businesses that clearly do not need it,” she said. “I have a problem with that.”
Contreras-Sweet pushed back against the criticism, arguing that the agency has asked for permission to expand other initiatives that help meet the needs of underserved entrepreneur populations – including the department’s network of Women Business Centers.
Overall, the administrator said, her team is “doing more with less.” She emphasized that the agency’s request for $860 million next year is roughly 3 percent lower than this year’s approved SBA budget.
“I take my fiduciary responsibility very seriously, and this budget represents my commitment to be a good steward of taxpayer dollars,” Contreras-Sweet said, adding that it would give the agency “the resources we need to… help more small businesses across the country innovate, launch, hire and grow.”
