By Marshall Kirby, Public Policy Analyst

Almost everyone knows America is facing a fiscal and budget crisis.  Years of spending more than was brought in have now caught up with us, with some help from a recession.  You’d be hard pressed to find an economist or policy analyst who would argue that this is not a major concern for the economy and nation as a whole.  However, you do find debates in the policy solutions legislators propose.  Should we make serious cuts in budgets to reduce the deficit, or do we make gradual cuts given that we still are in the midst of high unemployment and economic uncertainty?  There are serious and sound arguments that each side can make.  But when it comes down to it, there needs to be a sound strategy of what we can realistically cut without producing negative short, mid, and long term implications for the economy at large.

This is where many people get frustrated (including myself).  There are a lot of things that the government spends on that are wasteful, just as there are many valuable programs that promote growth and important social causes.  However, this does not help in quantifying these areas – in fact we live in a highly partisan time and each party’s anathema is the other’s idea of a successful program.  However, it seems in the past few weeks that Democrats and Republicans have found some bipartisan common ground – albeit with a frightening proposal.

Senators Mary Landrieu and Olympia Snowe both on the Senate Small Business Committee, have formed a cross party alliance and have drafted a letter already sent to Small Business Administration head Karen Mills.  The leaders request that Ms. Mills come up with programs which can be “cut” or “eliminated” without hampering the ability of the SBA to operate and serve the Small Business Community.  Both Senators in the past have been avid supporters of the SBA and of promoting small business interests.  It seems even stranger in that the previous decade was marked with reductions in the budget.  In 2006, the budget was $440 million, down from 2001 when it was $674 million.  To President Obama’s credit, he restored some of the SBA’s funding in 2010 bringing it $687 million (this is a nominal increase, but when accounting for inflation, it represents still a lower proportion of funding than in 2001).  The stimulus bill did provide additional money for small business loans, but with that funding drying up, the future is uncertain for the types of programs and loans it will be able to deliver to business owners and entrepreneurs.

There is no doubt that measures to make the SBA more efficient are in order, but the question is how will the SBA and lawmakers quantify and prioritize programs?  Well meaning cuts can have unintended consequences for business owners and entrepreneurs.  It has been mentioned before, but Congress needs to become aware that in order to create jobs in this climate of high unemployment, they will need the help of small businesses.   Additionally, by all non-partisan accounts, the economy will need to produce solid measures of growth over the next decade to maintain our standards of prosperity and living.  What better way is there to accomplish those goals than helping small businesses grow, create jobs and opportunities, and spur innovation?  There is always a lot of talk about how essential small enterprises are in our nation’s economy, but in this case, it seems that our legislators are taking a risk in proceeding down a path where the SBA will potentially have fewer resources to provide grants and assistance to business owners and entrepreneurs.  This is a major risk which could produce negative impacts for the whole economy.  Not to mention many minority and women business owners rely heavily on the SBA in their early years as entrepreneurs.

We need to remind lawmakers that while we agree that bipartisan measures must be undertaken to reduce the deficit, we cannot afford to sacrifice future growth in order to cut today’s expenses.  Doing this endangers America’s greatest asset, our entrepreneurial spirit and innovation.

Mr. Kirby joins The National Puerto Rican Chamber of Commerce with an experienced background in Public Policy Analysis.  He has worked for Americans for Informed Democracy, the Center for US Global Engagement, and for local governments in Virginia on issues ranging from international finance, national security, and other areas of foreign and domestic policy.  He holds a Master of International Development Degree from the University of Pittsburgh.

Marshall can be reached at 866-576-5222 x 8, or