Wednesday, August 10, 2011

Deja Vu All Over Again

Senate Republicans have introduced a bill that could eliminate all federal programs to assist small businesses, as well as women-owned, veteran-owned and minority-owned firms. Senator Richard Burr (R-NC) introduced S. 1116, titled the "Department of Commerce and the Workforce Consolidation Act," which would combine the Small Business Administration (SBA) with the Department of Labor and the Department of Commerce, a move that could devastate U.S. job creation.

Republicans have attempted to abolish the SBA for nearly three decades. President Ronald Reagan tried to shut the agency down back when I first got started doing SBA loans.

Once people realize that the SBA 7(a) program not only drives job creation but is also a net revenue generator for the government, support for the program should keep it alive.  If you factor in the cost of the program, both its administration as well the actual guarantees, against the guarantee fees collected and net tax revenues generated, this program pays for itself.  Call it supply side spending.

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