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Let Us Now Praise Olympia Snowe

By Bizbox

Sen. Olympia Snowe (R-Me.), who is the ranking member (i.e., the shadow chairperson for the minority party, which is currently the Republicans) of the U.S. Senate Small Business and Entrepreneurship Committee, has some very compelling thoughts on the Small Business Administration. She offers some of them in an illuminating interview with Business Week.

While all 100 senators are nominally equally powerful (excepting majority leadership, which has a bit more official power), in reality certain senators' votes count for more than others; and few votes will carry more oomph over the next two years than Snowe's. She is an extremely moderate Republican, whom Democrats will be constantly courting over bills in which they need two or more Republicans to join all Democrats in averting a filibuster. She and her fellow Maine Sen. Susan Collins will be the first two people in the Democrats' Rolodex for this purpose. This means that if she in turn wants something done she will be listened to. In sum: this is someone you want in your corner. And it looks like entrepreneurs have her in theirs.

Her two marquee suggestions for President-elect Barack Obama are to make the SBA administrator, whom Obama has not yet announced, a Cabinet-level officer (the SBA sits under the umbrella of the Commerce Department, whose Secretary is in the Cabinet; Obama has nominated New Mexico Gov. Bill Richardson for that position), and to fund the SBA fully. But she also has thoughts on the chronic misreporting of federal small business contracts as well as the massive decline this year in the administration's signature program, 7(a) loans. The whole thing's worth a read; our thoughts come after the jump.

First off, it's important to take stock of just how unradical those two central positions are. The SBA Administrator frequently is elevated to Cabinet-level status (the vice president and the department secretaries automatically gain such status, and it is frequently extended to other executive branch officials, such as the FBI Director; Obama has announced he will elevate his U.N. Ambassador, for one, to his Cabinet). And as for fully funding the department...well, we certainly hope that calling for a component of the U.S. government to get the full amount of money it is supposed to get isn't considered a particularly bold proposal.

A couple of other issues Snowe addressed:

Female-owned business procurement. Amid all the fuss over the more than $5 billion in supposed federal small contracts that actually went to some of the world's largest corporation, it was easy to overlook the fact that the U.S. government last year fell shy of legally mandated procurement quotas for other sorts of businesses too, including those owned by women and minorities. In fact, as we reported, the SBA is looking to expand these requirements.

"Under current law, there is a statutory goal for 5 percent of government-wide contracts to flow to women-owned small businesses," Snowe said. "Unfortunately, in Fiscal Year 2007, women-owned businesses were only awarded 3.4 percent of federal contracting dollars." She added, "I stand ready and willing to help to do anything I can to assist the new Administration in implementing a meaningful final rule and helping the Federal government to satisfy -- and exceed -- its goaling requirement for women-owned small businesses." While we would expect any male politician to be just as angered at the government's failure to meet these goals--a failure that Snowe explicitly lays at the feet of the Bush administration--it surely can't hurt that Snowe is one of the most visible and simply most powerful female politicians in the country.

7(a) loans. They fell. Lots. The SBA promulgated new rules meant to encourage banks--who are the ones that actually get to decide to make or not to make the loans--to up their lending. There is skepticism over whether this will actually work.

Snowe, acknowledging all of these facts (which is promising enough), pointed to SBA loans' being "overly complex, cumbersome, and expensive." "This is especially true for smaller and community banks that may only make a few small business loans a year," she added--these are, of course, the banks that would otherwise be likely to make more of these loans. So, for one, Snowe proposes streamlining the 7(a) process.

Additionally, she announced her intention to submit a bill that would attack the credit crisis from a variety of different angles. Among its proposals is to slash lending fees by $500 million. Good thinking.

Miscellany Snowe also spoke of the other ways in which the SBA can perhaps make a contribution. These include entrepreneurial training; influencing overall administration economic policy; and helping small businesses identify promising foreign markets.

All of this sounds immensely encouraging. Snowe is clearly on top of her game. Her passion regarding female-owned business contracts and her obvious knowledge of what's ailing the 7(a) program are among the most heartening things we've come across regarding these issues in quite some time.

But Snowe, powerful as she is--and she is fairly powerful!--holds barely a fraction of the juice that the incoming president will have. The four-person team that the Obama Transition has assigned to review the SBA has been given solid marks by current (and almost certainly outgoing) Acting Administrator Sandy Baruah, Sharon McLoone reports. (And we will not be shocked if one of those four reviewers--Fred Hochberg, Ginger Lew, Karen Mills, and Kathleen Maher--ends up as Obama's nominee for administrator.) That's a good start, but we are far away from giving a final grade.

Our point is that, regarding the SBA and its important attendant issues, the ball is, as with so many other venues, in Obama's court. It is good to know, though, that in Olympia Snowe, someone good is on the other side to receive his passes.

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