Dale Bumpers: “That was certainly my intent, and I believe the intent of the members of the Small Business Committees of both the House…”

“That was certainly my intent, and I believe the intent of the members of the Small Business Committees of both the House and Senate, when we acted on this legislation in 1992. I feel confident that this was the understanding of the other Members of this Chamber, as well. Frankly, to treat these certificates as debt instruments backed by the full faith and credit of the United States is the only way to make this program work. If they were not, the investors would demand a far higher return on their investment because the risk would be significantly higher. And the important aspect of that fact at present is that without this change, the cost of this program to the Federal Government will be substantially more. The consequences of failing to cure the definitional defect are severe. Either future leverage fundings would be impossible, thereby directly ending the program, or the uncertainty surrounding the nature of the certificates would dramatically increase their cost, thereby effectively ending the program in our view. Not only would a valuable program have been killed unnecessarily, but the Government might be liable for unfunded leverage commitments outstanding at this time, perhaps as much as $90 million, and, perhaps, losses of the $565 million in private capital that has been committed to the program to date in reliance on the availability of leverage capital at reasonable rates. For this to happen because of a lack of definitional clarity would be unfortunate indeed.”