Kerry bill could save small businesses

[Luftmensch067]

At issue is the Small Business Innovation Research program, a 25-year-old federal grant program that has enabled more than 17,000 small businesses to develop cutting-edge products through grants from NASA, the Pentagon, the Environmental Protection Agency and other federal agencies.

The program sets aside 2.5 percent of the participating agencies’ research and development dollars for businesses with 500 or fewer employees. Access to these funds is crucial to these businesses. Most are centered on early-stage innovation, developing products that venture capital investors consider too risky or too limited in marketability, since many of the products are destined for use by the military.

In short, the program’s funding is what keeps these businesses alive. And the investment has paid off: The program’s firms employ 1.5 million people, including 450,000 scientists and engineers, and have received 84,000 patents, far more than American universities over a similar time period. In New York, 3,073 companies have received $1 billion in grants since 1983.

But now the program is under attack. Led by big biotech firms and the National Venture Capital Association, the assault began in the House this year through a bill sponsored by Rep. Nydia M. Velazquez, D-N. Y. The bill would obliterate the program’s original intent by giving venture capital firms, large biotech companies and universities access to the program’s relatively small pot of federal funds.

The House bill loosens the program’s strict formula for secondary funding. Instead of undergoing a peer review before being approved for additional funding, the bill creates a “persuasion” model, giving big companies and their lobbyists a huge advantage over their smaller competitors. If the House bill passes, the program will become a vehicle driven by relationships more than accomplishments.

The hopes of thousands of small businesses are riding on a Senate alternative spearheaded by Sen. John Kerry. Kerry’s bill, approved last month by the Committee on Small Business and Entrepreneurship and expected to pass easily in the Senate, would preserve many of the program’s safeguards while giving larger firms more controlled access to its funds.

Kerry’s bill won’t mollify both sides, but compromises rarely do. House member should re-examine their prior action on Velazquez’s ill-conceived bill and embrace Kerry’s sensible alternative. Small businesses face enough difficulties in the current economic climate without having to share their small piece of the federal pie with bigger, stronger competitors.

Jere Glover is executive director of the Small Business Technology Council.

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[karynnj]

1. It is disgusting that a Democrat in the House would

work against small businesses having a level playing field. The hearing on Kerry's compromise bill that passed the Senate committee unanimously is very short There is some discussion by those who wanted something similar to the House's bill, but they all agreed to Kerry's compromise. http://sbc.senate.gov/hearings/20080730.cfm (Here's the pres release - http://sbc.senate.gov/press/record.cfm?id=301536)

I love this one paragraph from the executive director of the Small Business Technology Council.:
"Kerry’s bill won’t mollify both sides, but compromises rarely do. House member should re-examine their prior action on Velazquez’s ill-conceived bill and embrace Kerry’s sensible alternative. Small businesses face enough difficulties in the current economic climate without having to share their small piece of the federal pie with bigger, stronger competitors."

One of these two legislators is doing an excellent job supporting small business, which do create a huge number of jobs and much of the technical innovation.

[beachmom]

2. If anyone watched Kevin Phillips on Bill Moyer's Journal, they

would have learned what a tight grip the financial industry has on Democrats. I think the Democratic party needs to re-think its priorities, and whether it wants to continue to take money from these Fat Cats who are wrecking our economy. I think that House bill was related to that. Good on Sen. Kerry to insist that NO, this is for SMALL businesses. If we are going to get out of the big mess we are in, we need to make sure that small businesses are allowed to flourish.