The House Small Business Committee recommended cutting the Small Business Administration's budget request for next year by nearly $100 million.

The SBA requested $985 million for fiscal 2012. The committee, which has jurisdiction over SBA programs, thinks the agency could get by on much less by eliminating duplicative programs and initiatives that show little promise of creating jobs.

"The chasm of the deficit requires tough choices," said Rep. Sam Graves, R-Mo., who chairs the committee. "Unfortunately a review of the SBA budget shows no effort to make tough choices. In fact, the administrator wants to start new initiatives - initiatives that are unlikely to help small businesses create jobs. Further, the administrator makes no effort at reducing a bloated headquarters operation."

In its letter to the House Budget Committee, the small-business committee recommended eliminating funding for Women's Business Centers and Veterans Business Centers. It contends these counseling programs duplicate services provided by Small Business Development Centers, which operate at 900 locations across the country, and SCORE, a program that provides counseling from volunteers with business experience.

The SBA proposed cutting SBDC funding by $10 million. The committee recommended restoring those funds.

The SBDC program "produces nearly $3 in federal revenue for every dollar spent," said Rep. Nydia Velazquez of New York, the committee's ranking Democrat. "It simply makes no sense to divert money from reputable programs and give it to the agency's untested projects."

However, she disagreed with the Republican majority's recommendations to eliminate funding for Veterans Business Centers.

"Veterans, who have a high rate of entrepreneurship, need more outreach, not less," she said.

Some of the committee's recommended budget cuts come in programs that were created by the SBA without congressional authorization. For example, last month the agency launched two new loan programs, Small Loan Advantage and Community Advantage, which are aimed at increasing the number of low-dollar loans made to small businesses in underserved areas. The committee recommended that no money in the agency's flagship 7(a) loan program account be used for any new loan programs.

The committee also recommended eliminating $12 million for the SBA's new program to promote "regional innovation clusters" and $3 million for its "emerging leaders" program, which trains small-business owners in inner-city areas.

Programs created by last September's Small Business Jobs Act also were targeted by the committee. For example, the panel recommended that no funds be allocated for administering a new program that allows small-business owners to refinance their commercial real estate loans through the SBA's 504 loan program if they face a balloon payment before Dec. 31, 2012. The committee fears the program's fees won't cover its costs.

"The risks to taxpayers from this program might be worth it if there was a potential for job creation from the refinancing, but that is not required," the committee wrote.

In addition, it recommended cutting $38 million from the SBA's Office of International Trade. This money, which would be spent on promoting export opportunities for small businesses, duplicates spending on services already provided by states and the Department of Commerce, according to the panel.

The committee thinks some of the savings for these cuts should be spent on hiring more procurement center representatives, who help small businesses win federal contracts.

The panel also recommended eliminating the SBA's 10 regional offices.

For more information, see www.smallbusiness.house.gov

Business, labor endorse U.S. infrastructure bank

The U.S. Chamber of Commerce and the AFL-CIO don't agree on much, but they do agree on the need to create a new American Infrastructure Bank.

The leaders of both organizations were on hand March 15 at a Capitol Hill news conference where Sen. John Kerry, D-Mass., announced legislation to create this new entity. The bank would "leverage private capital with public funds in the form of loans and loan guarantees to help bridge the infrastructure deficit that has been plaguing our nation for decades," Kerry said. Transportation, water and energy infrastructure projects of regional or national significance would be eligible for funding.

"With traditional funding methods like appropriations and municipal bonds squeezed by the economic slowdown, an American Infrastructure Bank would complement limited public investments by leveraging private resources to help get the job done," Kerry said.

Donohue said traffic congestion is costing businesses billions of dollars, and innovative approaches such as the infrastructure bank are needed to supplement traditional ways of funding road projects.

Associated General Contractors also supports Kerry's proposal, but it outlined a series of additional steps to boost infrastructure spending, including moving from a gasoline tax to a "miles traveled" tax to fund highway projects.

AGC's top priority, however, is to boost private-sector demand for construction, which once accounted for 76 percent of all construction activity but now accounts for only 60 percent. Washington could help by passing free trade agreements and enacting business-friendly tax policies, AGC contends.

For more information, see www.kerry.senate.gov

Kent Hoover can be reached at khoover@bizjournals.com