Committee: Budget cuts may hurt small biz

Democrats on the House Small Business Committee, concerned over President Bush's proposed fiscal 2007 budget, released a report detailing how cuts could impact funding for small-business development programs.

The report shows that 75 of the 100 federal small-business assistance programs studied are slated for either cuts or elimination. Many of the programs are meant to promote IT spending and research. The overall reduction in funding for federal small-business programs is almost $6 billion, the report stated.

Among the IT-focused programs the budget proposes eliminating is the Advanced Technology Program, operated by the Commerce Department. The program, developed to spur innovation, provides multi-year funding to companies and industry-led ventures that take on high-risk technology projects. The program had $80 million in funding in fiscal 2006.

Another is the Environmental Technology Verification program run by the Environmental Protection Agency. This program offers to test and verify new technologies for small companies that otherwise could not afford such testing. The fiscal 2007 budget suggests eliminating funding to this program, which received $3.2 billion in fiscal 2006, according to the report.

"The elimination of the ETV will increase small businesses' aversion to taking risks, and will put a halt to the fostering of potential technologies developed by small firms," the report states.

A third program proposed for elimination is the Energy Department's Inventions and Innovations program. This was created to provide small firms with financial, technical and commercialization assistance in developing energy saving inventions. To date, the program has funded more than 500 inventions, 35 percent of which have made it to the market and accounted for more than $1 billion in cumulative sales, the report states.

While announcing the report, and its findings, the committee's ranking Democrat, Rep. Nydia M. Velazquez (D-NY), took time to blast the Bush administration for publicly supporting small businesses and technological innovation, while cutting funding for programs that support them.

"It shows the disconnect that exists in this administration and, in some cases, the incompetence," Velazquez said.