Road to Reauthorization: Support for Small Businesses Remains Strong

“Road to Reauthorization,” a new blog series, builds off BPC’s latest small business report, Small Agency, Big Mandate: A Bipartisan Road Map to Modernizing SBA. Nearly 23 years since the last reauthorization of the Small Business Administration (SBA), the report explores the importance of top-to-bottom congressional reviews as a key aspect of good governance and outlines ideas for Congress to consider when updating and reforming the agency through reauthorization. The series provides small business owners, stakeholders, and advocates with updates and insight on congressional progress toward reauthorization of SBA.

Members of Congress are fond of extolling the virtues of small businesses and their role as the “backbone” of the American economy. Do their actions back up their words?

By one measure, the answer is clearly “yes.”

In the 117th Congress, 110 and 180 bills were referred to the Senate Small Business and Entrepreneurship Committee and the House Small Business Committee, respectively. Many of those bills had support from both parties. BPC identified at least 68 bills with bipartisan cosponsors just dealing with the “three C’s” of SBA: capital, contracting, and counseling. If we included in our count bills pertaining to small businesses that move through other committees—whether on banking policy, workforce, taxes, or many other issues relevant to small businesses—the number would be much higher.

Authoring legislation is, of course, a central responsibility of Congress. The number of bills introduced pertaining to small businesses and SBA—especially with bipartisan backing—indicates substantial interest from members of Congress in supporting small businesses.

An even better measure of the importance that lawmakers place on SBA support for small businesses is the number of bills that get passed by either chamber with bipartisan support. In the 118th Congress, the House has already passed three bipartisan SBA-related bills: H.R. 400, the Investing in Main Street Act; H.R. 449, the Microloan Transparency and Accountability Act; and H.R. 399, the Small Business Advocacy Improvements Act. Each of these bills also passed the House in the last Congress before stalling in the Senate.

Access to capital is a perennial concern for small businesses and closing gaps in capital access has been a longstanding goal of policymakers. The Investing in Main Street and Microloan Transparency and Accountability Acts tackle these issues by trying to expand the amount of money available to small business investment companies (who invest in growing small businesses) and by gathering more data on microloans, specifically those made to rural small businesses.

The Small Business Advocacy Improvements Act recognizes the role of small businesses in international trade and seeks to expand the scope of the SBA Office of Advocacy’s responsibilities accordingly.

A Journey of a Thousand Miles …

Admittedly, these are relatively minor and noncontroversial bills (two passed by voice vote and the other, H.R. 400, passed 411-13). On their own, each make small changes for SBA and its customers—America’s small businesses and entrepreneurs.

Yet their passage is encouraging for three reasons. First, with the House flipping control from Democrats to Republicans after the 2022 midterms, lawmakers have immediately turned their attention to those items that have widespread bipartisan support. Second, even minor bills play a significant role in generating momentum and political trust, essential components of bipartisan cooperation. Third, these bills provide initial building blocks for future SBA reauthorization by Congress.

The bills may also demonstrate the seriousness of congressional efforts to small business owners, who often feel neglected by policymakers. Small business owners are busy running their companies; they don’t have time to monitor every twist and turn in Congress. What’s important to them is whether the two parties are at least trying to work together on their behalf. And today, with the idea of SBA reauthorization gaining more attention, they care about progress toward that goal.

Small business owners participating in the Goldman Sachs 10,000 Small Businesses Voices program express high levels of support for modernizing SBA’s entrepreneurial development programs, strengthening access to capital programs, improving communication of SBA resources and customer service, and expanding procurement opportunities for small businesses. The comprehensive nature of changes small business owners seek at SBA has made the agency’s reauthorization a top priority for them, and they want Congress to prioritize it too.

Source: Goldman Sachs 10,000 Small Businesses Voices survey, January 2023

Forward Progress

Bipartisan bills from current and recent Congresses to reform key SBA programs can act as building blocks for a comprehensive SBA modernization bill, providing lawmakers with a head start on SBA reauthorization. The chairs and ranking members of the small business committees can provide the will. Encouragingly, there are already signs of support for bipartisan reauthorization that will make meaningful changes for small businesses.

Two decades since the last SBA reauthorization, post-COVID, and amidst record-setting new business creation in the face of persistent challenges in capital access and other areas, now is the time for Congress to reaffirm its staunch support for small businesses by expanding on existing and recent legislative efforts and reauthorizing SBA.