Lucille Roybal-Allard: “I rise in support of S. 141, a bill to improve the calculation of the federal subsidy rate with respect to small…”

“I rise in support of S. 141, a bill to improve the calculation of the federal subsidy rate with respect to small business loans of the Section 8(a) program. As a member of the Commerce-Justice-State Subcommittee of the House Appropriations Committee which has funding jurisdiction for the Small Business Administration and its loan portfolio, I know that this is an issue we have wrestled with from year to year. I am pleased to see that we are finally acting affirmatively on behalf of small businesses. Everyone recognizes that small businesses represent the engine of U.S. economic growth. The issue has to do with credit subsidies for small business loans. Unfortunately, the Office of Management and Budget has refused to modernize its credit subsidy calculation models. A recent General Accounting Office study reported that OMB's models do not take into account historical data and recent statutory and regulatory changes that have improved default rates and program performance. As a result, OMB over-estimates the current subsidy rate that, in turn, limits the level of loans that can be guaranteed.”