PETALUMA, Calif., Aug. 19 CA-Amercn-Sm.-Businss
PETALUMA, Calif., Aug. 19 /PRNewswire-USNewswire/ -- The National Venture
Capital Association (NVCA) has blanketed the Congressional small business
committees with generous campaign contributions in an attempt to have
legislation passed which will allow the nation's wealthiest investors to cash
in on government contracts earmarked for small businesses.
In addition to contributions to most of the members of the House and
Senate small business committees, the NVCA and its members have made
significant campaign contributions to the Chair of the House Committee on
Small Business, Nydia Velazquez (D - NY) and to House Speaker Nancy Pelosi (D
- CA).
Federal law requires that 23 percent of all federal contracts and
subcontracts, about $135 billion a year, be awarded to small businesses. If
the NVCA is successful, a lion's share of those small business contracts could
soon be diverted to firms owned and controlled by some of the largest venture
capital firms in the United States.
On September 30, the Small Business Innovation Research Program is set to
expire. With that in mind, the Senate Committee on Small Business and
Entrepreneurship has passed S. 3362, the SBIR/STTR Reauthorization Act of
2008. The bill will allow some of the largest venture capital firms in
America to participate in federal small business programs. The bill caps
venture capital participation at 18 percent for the National Institutes of
Health and 8 percent for other agencies. If passed through the Senate, the
bill would go to a conference committee between the House and Senate to be
finalized.
With S.3362 pending, the NVCA and its members are pushing to include a
substantial portion of the legislative language from two House bills which
were passed through the House last year and were designed to reauthorize the
program. As passed, Both H.R. 3567 and H.R. 5819, would allow firms owned and
controlled by billionaire venture capitalists and wealthy investors to qualify
and participate in government small business contracting programs without
limits on the total amount of venture capital participation in the program.
Small business advocates are concerned that if the legislation becomes
law, the average American small business will be forced to compete head-to-
head with firms owned and controlled by the nation's largest venture capital
companies for even the smallest orders of goods or services.
The American Small Business League (ASBL) projects that thousands of
middle class firms across the country will be forced to close their doors if
the NVCA is successful. Larger states like Texas, Florida, New York, Illinois
and California could lose billions of dollars in federal contract dollars and
thousands of jobs. Smaller states that have been hit the hardest by the
current economic downturn will no doubt feel the impact of this legislation,
which will pull hundreds of millions of dollars out of the middle class
economy in those states.
Speaker Nancy Pelosi exerted so much pressure on members of the House, she
was able to push the bills through in record time. In fact, Pelosi pushed the
bills through the House so quickly that many members of the House voted for
the bill before they had the chance to read the legislation or receive
feedback from their constituents. As a result, the bills were passed despite
opposition from every major small businesses organization in the country,
including the Small Business Administration (SBA).
The fate of small business owners and the SBIR program is now in the hands
of the full Senate. Small business owners and advocates were shocked and
disappointed when Senate Small Business Committee Chair John Kerry (D - MA)
passed the Senate version of H.R. 5819, S. 3362 through his committee shortly
before the summer recess.
"Senator Kerry has been complaining for years about loopholes and Bush
Administration policies that allow Fortune 500 firms to receive federal small
business contracts. Yet, he has done nothing to stop that problem," ASBL
President Lloyd Chapman said. "Now he is backing federal legislation to give
small business contracts to venture capital firms and billionaires. I couldn't
be more disappointed in this Congress and it's leaders."
The ASBL has pledged to fight both pieces of legislation by organizing
opposition from Chambers of Commerce, other small business organizations and
small business owners across the country.
SOURCE American Small Business League
