Nydia Velázquez

Ms. VELAZQUEZ

Ms. VELAZQUEZ. Mr. Chairman, in cities and towns across the country, lead paint hazards still pose a clear and serious risk to families, with exposure of toxins in the home triggering asthma at a great cost to American families and the national economy. At greatest risk are low-income and minority children living in older, substandard housing. Despite these facts and the bipartisan effort to increase funding for HUD's lead hazard control grants, this bill cuts funding by approximately $48 million, risking the health and safety of children and families across the Nation. Even with last year's funding level, HUD was only able to fund one-third of the requests it received from cities and States, and the cut contained in this bill would only make this situation worse. With this in mind, I rise today to urge Members to support the Velazquez-Slaughter-Terry amendment which restores funds to HUD's lead hazard control grants to last year's level for this critical program that makes great strides in eradicating lead poisoning in children. We have a national goal of protecting our children from lead poisoning by 2010. HUD's lead hazard control grants are critical to achieving this goal. Without adequate funding, we run the risk of not being able to match the rhetoric with action. This amendment reduces funding for salaries and expenses and at the Department of Treasury, and the Department of Transportation's new headquarters building. Despite the offsets, these two areas will still receive sufficient funding, with Treasury still above the fiscal year 2005 funding level. By adopting this amendment, we will protect the health and safety of children while maintaining sufficient funding levels, making this a win/win situation. Even at moderate to low levels of exposure, scientific evidence shows that lead can adversely impair a child's performance on standardized intelligence tests, and it can affect school performance, educational attainment and, ultimately, career prospects. Voting for this amendment will help with prevention efforts and move us closer to the goal of eradicating lead poisoning altogether. For the health and safety of children across the country and for the billions of dollars in potential savings by preventive outreach, I urge support of this amendment.

Ms. VELAZQUEZ. Mr. Chairman, I offer an amendment.

Ms. VELAZQUEZ. Mr. Chairman, I have a parliamentary inquiry.

Ms. VELAZQUEZ. Mr. Chairman, I have been advised that the amendment has been cleared by the CBO and the parlimentarians, so I would like an explanation for the point of order.

Ms. VELAZQUEZ

Ms. VELAZQUEZ. Mr. Chairman, this is about economic opportunity for small businesses. The fact of the matter is that the Federal marketplace is growing and that small businesses are losing out; that their number of dollars and contracts are shrinking, and the Federal Government is not achieving the 23 percent statutory goal set by Congress.

Ms. VELAZQUEZ. Mr. Chairman, the Department of Defense is saying that immediately small businesses will get $4.4 billion if this is fixed.

Ms. VELAZQUEZ. Mr. Chairman, will the gentleman yield?

Ms. VELAZQUEZ. Mr. Chairman, unfortunately, the authorizing committee was not able to come together for the small business authorization to report a bill out of our committee. And for those people and Members who are always talking about helping small businesses and providing opportunities in the Federal marketplace and when the Department of Defense is saying that this does not make sense, this is an opportunity to do it, and this is why I want a ``yes'' vote on this amendment.

Ms. VELAZQUEZ. Mr. Chairman, will the gentleman yield?

Ms. VELAZQUEZ. Mr. Chairman, will the gentleman yield?

Ms. VELAZQUEZ. Mr. Chairman, the Federal marketplace has experienced amazing growth over the past 4 years, increasing by $100 billion. Given this increase, it would only be logical that our Nation's small businesses would see similar growth in contracting opportunities. However, this has not been the case. The reality is that small firms continue to be shut out of the Federal marketplace. The Federal Government has failed to reach its small business goal of 23 percent for the past 4 years now, costing small businesses $15 billion in lost contracting opportunity in fiscal year 2003 alone. The Department of Defense has been an agency that has had a significant amount of trouble with this. One of the main causes has been contract bundling, which is the practice of combining contracts previously performed by small businesses into one megacontract that is simply too large for small firms to bid on. But often overlooked is that a significant contribution to the inability of the Department of Defense to make its goal is the comp demo program. The comp demo program was created in 1989, but was made permanent during the Clinton administration under the guise of increasing small business participation. The theory behind it was to give agencies direction in finding small business contracting opportunities in nontraditional industries. This would be done by capping the amount of contracts in those industries that have been historically dominated by small businesses. However, this is not what the program has done. Instead, it has limited small business participation in the Federal marketplace. The comp demo program diverts contracting opportunities to large firms, effectively limiting the ability of small companies to compete. While DOD is required to meet a 23 percent small business goal, the comp demo program ties its hands and restricts awarding contracts in the industries where small businesses excel. At a time when agencies are already struggling to meet their small business goals, this simply makes no sense. For an agency that represents 70 percent of all government contracting, this is clearly having a negative impact on our Nation's entrepreneurs. The reality is that this program simply does not work, and this program has been recognized by the administration and the Department of Defense themselves. They proposed to eliminate the comp demo program altogether in the DOD's legislative package for 2006. My amendment acknowledges the problem and provides a viable solution to fix it by prohibiting the use of funds for fiscal year 2006 to implement the comp demo program. This is supported by the Associated General Contractors, the American Nursery and Landscape Association, the National Small Business Association, and the National Black Chamber of Commerce. This action alone would have the impact of awarding some $4.3 billion in additional contracts to small businesses. In today's Federal marketplace, small businesses are losing traction, and they cannot afford to be deprived of these opportunities. The comp demo program is only making small business owners' struggle to break into the Federal marketplace all the more difficult. By adopting this amendment, we will be taking a step to fix this problem. When small businesses say the program does not work, DOD says it and the administration is saying it, clearly something needs to change. My amendment will do this. It is not only good for small businesses but also for the taxpayer and our Nation's economy. If we want to get this economy back on track and create the jobs we need, then we must give small business the opportunity and tools to do so. The comp demo program is simply not doing that, and it needs to end. I urge my colleagues to vote ``yes'' today on this amendment for better use of the taxpayers' dollars and to help our Nation's small businesses compete in the Federal marketplace.

Ms. VELAZQUEZ. Mr. Chairman, I offer an amendment.

Ms. VELAZQUEZ. Mr. Chairman, there are some who said that capping small business opportunity in certain industries increases opportunities in other industries. That might have been the theory behind the program in 1988 when it was created, but that has not been the case. Different industries offer different opportunities; some are very favorable to small businesses. The Department of Defense has not achieved its small business goal for the past 4 years. That is the reality. So, clearly, they are not making up the difference someplace else. Under the comp demo program, small businesses are guaranteed 40 percent participation in the targeted industries. If the agency does not achieve 40 percent with small firms, it can reinstate small businesses' set-asides. One need look no further than the goal for architectural and engineering services, which has never been achieved. We have asked the Department of Defense. They do not reinstate set- asides when the achievement with small businesses is less than 40 percent. Forty percent small business participation is a good thing. Normally, small businesses only get 23 percent. If a small business's participation decreases from 78 percent to 40 percent, that is the loss of 38 percent, and that is what is happening now. The bottom line, Mr. Chairman, is, if you support small business opportunity in the Federal marketplace, you should support this amendment.

Ms. VELAZQUEZ. Mr. Chairman, I demand a recorded vote.

Ms. VELAZQUEZ. Mr. Chairman, before the Comp Demo program, small businesses in those selective industries were making 78 percent of all the contracts. Right now they are doing only 38 percent, almost cut in half. And, besides, I thought that the gentleman represented the party where people are rewarding small businesses or businesses that are exceeding. So now if they are doing a little bit better, then we are going to punish them?

Ms. VELAZQUEZ. Mr. Chairman, will the gentleman yield?

Ms. VELAZQUEZ. Mr. Chairman, I move to strike the requisite number of words.

Ms. VELAZQUEZ

Ms. VELAZQUEZ. Mr. Chairman, will the gentleman yield?

Ms. VELAZQUEZ. Mr. Chairman, I demand a recorded vote.

Ms. VELAZQUEZ. Mr. Chairman, I thank the gentleman for yielding. If my colleague is for deficit reduction, with this amendment we will reduce the deficit by $32 million. Then, if we pass this amendment, $78 million we leverage, $15 billion in loans, and create half a million jobs at a time when the economy is struggling to replace the jobs that we have lost.

Ms. VELAZQUEZ. Mr. Chairman, will the gentleman yield?

Ms. VELAZQUEZ. Mr. Chairman, well, the numbers that Mr. Barreto is giving my colleague is when the program was shut down, and he does not say to my colleague that they are doing $2 billion below what they said they would be doing at this time.

Ms. VELAZQUEZ. Mr. Chairman, will the gentleman yield?

Ms. VELAZQUEZ. Mr. Chairman, I yield myself as much time as I may consume. Mr. Chairman, today's small businesses are having a difficult time in accessing affordable capital due to recent changes to the 7(a) program. This amendment will change that by restoring funding to its fiscal year 2004 level. As you can see from this chart, the cost of the 7(a) program on small business has doubled, translating into an additional $1,500 to $3,000 in upfront costs. And for larger loans, fees are now more than $50,000. In addition, SBA has proposed even more fees on top of those that were implemented last year, and projections are that these fees will only continue to increase year after year. Clearly, these actions are having a negative effect. Since the fee increase, the total dollars going into the economy has dropped, small businesses are receiving less capital, and the number of active lenders making a loan has declined by 50 percent. These actions have resulted in a highly unstable program, as you can see from this chart. History has shown that operating loan programs without a government commitment is a recipe for failure. For proof, look at the SBA venture capital program which has been credited with investing billions of dollars in small businesses. Four years ago, it was taken to a zero subsidy rate. The argument is that it would make the program more stable. Well, today that program is shut down because it simply became too costly. By voting for this amendment, you are ensuring that the 7(a) program does not suffer the same fate. The offsets for this amendment can come from the IT accounts of the State Department, Justice Department, and SBA. This is a small price to pay for job creation. The 7(a) program is a proven job creator. For every $33,000 in loans, one job is created. With just a minor investment from our government, we can empower this Nation's entrepreneurs to do what they do best, create jobs and build this economy. This is the same amendment that was offered last year that passed with overwhelming bipartisan support. The only thing that has changed since then is that our Nation's small businesses have now had to endure a year of increased costs, and they have told us that these costs are hurting them. We cannot let this happen again. Fifteen trade associations, including the National Small Business Association; the Independent Community Bankers of America; the Credit Union National Association; the American Hotel and Lodging Association; and the U.S. Black Chamber of Commerce, representing businesses and lenders from across the country, are supporting this amendment and calling on Congress to restore this funding. By voting ``yes'' to restore the appropriations to the 7(a) loan program, you are voting to relieve our Nation's 23 million small businesses of these additional costs. This is a vote for continued job creation and economic development, two things, small businesses and our Nation's economy need now more than ever. Mr. Chairman, I reserve the balance of my time.

Ms. VELAZQUEZ. Mr. Chairman, I yield myself as much time as I may consume. Mr. Chairman, when SBA claims that the program is doing record levels I have to say that they said that they would do $16 billion. Today they are $2 billion behind, and they are clearly not going to achieve a record level. Mr. Chairman, I yield such time as he may consume to the gentleman from Ohio (Mr. LaTourette).