Depending on who you want to listen to, Congress and the Administration may be trying to eliminate the SBA and most of its small business programs, or they are merely evaluating the effectiveness of the agency and its programs. Either way, this is a serious issue!

The U.S. Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Federal Financial Management, Government Information, and International Security, is holding a hearing titled: The Effectiveness of the Small Business Administration. This hearing requested by committee chair Senator Tom Coburn (R-OK), will examine the effectiveness of SBA programs and the financial impact of them on the budget and economy.

Senator Coburn, or Dr. Tom, as he likes to be called, is known to vigorously oppose earmarks, plus-ups and the rapidly bulging budget defect. However, the manner in which he called this hearing had the "earmarks" of a railroad job to kill SBA and many of its programs. Its existence was kept especially quiet as were the list of witnesses.

This fact didn't go unnoticed by some small business insiders including Jere Glover of the Small Business Technology Council (SBTC), and LLoyd Chapman of the American Small Business League (ASBL). When it was discovered that one of the witnesses would be Veronique de Rugy, of the American Enterprise Institute (AEI), Glover immediately referenced de Rugy's controversial AEI paper "Are Small Businesses The Engine Of Growth?"

Glover, former SBA Chief Counsel for Advocacy and current Executive Director of SBTC took great exception to de Rugy's writing and published opinions. SBTC is currently formulating a response to her "opinions." On the other hand, Chapman, who some say often "shoots from the hip", takes no prisoners and knows how to spread the word, authored and widely distributed a press release on March 28, 2006 entitled "Oklahoma Senator Calls for Hearing to Abolish Small Business Programs" see www.asbl.com/showmedia.php?id=165

This infuriated Coburn, who sharply criticized the ASBL press release that Coburn claims included a false and deliberate distortion of the Senate oversight hearing he plans to hold on the Small Business Administration. By the same token, Chapman didn't take delight in Coburn's response where he said, "If the ASBL believes the SBA represents the pinnacle of economic perfection and efficiency and is beyond scrutiny, then they should be confident that their perspective will be vindicated during this hearing."

Claims of Illegal SBA Lobbying - In an article published by GovEXEC.com, a Coburn spokesman reflected that some SBA employees had lobbied some Oklahomans to put pressure on the Senator. At the time of this writing these charges were unfounded. It is an illegal activity for an agency to spend federal funds for lobbying activities.

The Hearing Witness Veronique de Rugy - If Senator Coburn wonders what precipitated this brouhaha, he need only look at the choice of Dr. de Rugy for a witness at this hearing. She possesses distinguished educational credentials from the University of Paris-Sorbonne and directed academic programs for the Institute for Humane Studies in France. In a recent Forbes magazine article, Small-Firm Idolatry, Stop Babying Small Businesses, Dr. de Rugy demonstrated how wonderful academe prose could be contrary to common sense and actual fact. Her lilting phrasing, "The President's latest budget proposes to shower a budget of $605 million on the SBA.." is void of the fact that the actual SBA budget has been reduced again, as it has for the last 6 years, and no federal agency has had to endure those severe level of cuts.

Dr. de Rugy also states: "Because everybody loves small businesses, everyone wants to do something for them, whether it's targeted tax credits, special regulatory treatment or preferential access to government contracts." What planet is this person on? If her statement were even remotely true, you wouldn't need small business advocacy, SBTC, ASBL, or the SBIR Gateway News. I could actually enjoy my evening and you wouldn't be burdened with my diatribes.

Of highest importance to most of our readers would be de Rugy's comment including small business "preferential access to government contracts" [that should be abolished]. Of course, that would include the SBIR/STTR programs.

Coffee with Dr. Tom - I must admit that in talking with one of Senator Coburn's staffers, I became convinced of the staffer's loyalty and admiration for the Senator. Dr. Tom hosts morning coffee for his constituents on Thursdays from 8 am to 9 am EST (call for R.S.V.P.) and he seems genuinely interested in serving his constituents and the country. If I were privileged to have coffee with the Senator, I would ask him the following questions pertaining to Dr. de Rugy's comment on "preferential access to government contracts":

Is it true that all 50 Senators are from above average income households (millionaires), and do you think an intelligent citizen who only makes $60k per year could be successful in competing and being elected to the U.S. Senate? If so, are there any recent (last 10 years) examples? If we apply this same principle to federal government contracting, do you feel that high tech small businesses could compete straight up with large well-funded companies? If yes, can you show me the small business success rate in such a competition?

Bottom line, small businesses need government help to compete in federal government contracting, especially in the research and development sectors.

Senator Coburn's hearing will take place April 6, 2006 at 2:30 PM in the Dirksen Senate Office Building, Rm. 342. We will cover that for you in our next Insider.